A private club is going public

A White Lotus-esque hotel chain is taking a break from its poolside life of luxury and diving into the tumultuous waters of the stock market.

Club Med SAS is in talks with banks about a potential IPO, Bloomberg reported today. The French company, which is part of the broader Chinese consortium Fosun International, has been around since 1950 and operates about 70 high-end resorts globally.

The luxurious club is reportedly eyeing the Hong Kong market, but also considering Paris and Amsterdam as alternative contenders. Club Med CEO Stéphane Maquaire, who has been at the helm of the company since July, said that the IPO could happen as soon as 2027, but Fosun told Bloomberg there are no definitive plans for a debut at this time.

Zoom out: This isn’t the first time that Club Med has eyed public markets. In 2015, Fosun purchased Club Med for about $1.1 billion. Back in 2018, the company considered going public as part of the IPO of its parent company, but the Club Med business didn’t end up being part of the deal. Since then, the company has focused on growing its luxury business in China.

Is rich people having fun a good business model?

The thought of Aperol Spritzes and poolside Rolexes might remind you of another private club that IPO’d: Soho House.

Back in 2021, Membership Collective Group Inc, which operated Soho House, the exclusive members-only club, went public on the New York Stock Exchange. Not only was the IPO raised at the lower end of their marketed range ($14 per share), but shares plunged as soon as the company started trading. This January, the company was taken private again at a price of $9 per share.

Soho House essentially cracked under the pressure of the public market. But there was another problem, too: Being an exclusive, luxury brand was ultimately not compatible with a public company business model that demands constant expansion and growth.

Then again, with all of this talk about a K-shaped economy, maybe it isn’t the worst time to be investing in the luxury vacation market. Just look at United Airlines and Delta, which have both enjoyed tailwinds from allocating more seating to premium, wealthy customers.

After all, if there’s one trend that war, stagflation, and political chaos hasn’t slowed down, it’s rich people splashing out.—LB