Franck Gervais, CEO of Pierre & Vacances-Center Parcs, stated that the greatest danger is not the crisis, but rather the success of yesterday, which can hinder preparation for tomorrow. Gervais made this statement during his intervention at the Manor congress in Venice.
Gervais took the helm of Pierre & Vacances-Center Parcs in January 2021, when the company was still reeling from the health crisis. At the time, the group was heavily indebted and unable to invest sufficiently in its products due to its real estate model. They were facing significant challenges in terms of debt and investment.
The company’s model, based on real estate development, involved building residences and vacation villages, then selling the properties to individuals or institutional investors in exchange for guaranteed fixed rents. However, this model was no longer viable, and the company’s margins were dwindling. The real estate development model had become unsustainable.
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Restructuring and Transformation
Gervais noted that the crisis accelerated the need for change, with the company’s debt reaching approximately €1 billion in 18 months. To address this, the company underwent a restructuring process, which resulted in the cancellation of €700 million in debt, with €500 million converted into capital and €200 million in fresh funds injected by new shareholders. This restructuring process was a significant step towards reducing the company’s debt.
The company conducted a strategic and operational transformation in parallel. The first priority was to put an end to the real estate development model and instead focus on tourism. They invested in renovating their accommodations and improving the customer experience, increasing their annual investments from €50 million to €100 million, with plans to further increase this to €120 million in the coming years.
The increase in investments was a key part of the company’s transformation. They aimed to improve the customer experience and increase customer satisfaction. The company’s efforts to renovate their accommodations and improve their services were key to their transformation.
Financial Performance
According to Gervais, the company has made significant progress, with a current turnover of approximately €2 billion and an operating margin of €185 million. Customer satisfaction has also improved by 20 points, and the company has returned to profitability after several years of negative net results. The company’s financial performance has improved significantly under Gervais’ leadership.
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Gervais emphasized that the key to a successful transformation is execution, and that teams must be able to measure their results. He also noted that the company should have made these changes 10 years earlier, which would have put it in a better position. Gervais highlighted the importance of timely decision-making and execution in the company’s transformation.
The company’s next step will be the arrival of Mubadala Capital, which is expected to take control of the group following a transaction signed in July, with the finalization expected in April 2027. This operation is expected to open a new phase of development and acquisitions for the company. The arrival of Mubadala Capital is expected to have a significant impact on the company’s future prospects.
Future Prospects
As the company looks to the future, it is likely that the changes made under Gervais’ leadership will have a lasting impact. The company’s focus on tourism and customer experience is expected to continue, with further investments in renovations and improvements to its accommodations. The company will likely continue to prioritize customer satisfaction and experience.