Club Med shuts Lindeman Island resort as Whitsundays tourism hit again

The closure of Club Med’s only Australian resort on Queensland’s Lindeman Island comes due to a mixture of poor visitor numbers, burdensome regulation and a turndown in the leisure travel market, one industry representative has said.

The confirmation came yesterday as the French chain confirmed it would close the Lindeman Island resort, with the island destination being put up for sale.

“It’s very disappointing to see,” Daniel Gschwind, chief executive of the Queensland Tourism Industry Council, told SmartCompany this morning. “Some regions are being more affected than others and for a number of reasons, the Whitsundays are being hit right now.”

Club Med general manger Quentin Braird has said in a statement that more customers are wanting premium products and that “Lindeman… was not in that category”.

“So, in order to meet our customers’ expectations, we have to now seek a new resort in Australia,” he said. “It was an extremely difficult decision for Club Med to make, as the resort is a firm favourite with our Australian and New Zealand guests.”

CBRE will sell the resort, which is set to close in January. It was originally bought in 1990 for $15 million, with the company having developed and upgraded the location over the past two decades.

Gschwind says the market has been hit by a decline in leisure tourism, as opposed to travel in the corporate market.

“It’s particularly tricky for the Whitsundays, because they are very much in direct competition to some of the south-east Asian pacific nations that have done particularly well.”

“So we are exposed to a full load of international competition at the moment, including the ‘cheap destinations’ overseas. That’s clearly had an impact here.”

Tourism and Transport Forum chief executive John Lee says the closure should seve as a “wake up call” for the Government, and urges some form of assistance for the industry, such as advanced depreciation.

“This should serve as a wake-up call for the industry…we could get more assistance and investment coming in if there was some action on this.”

Although Gschwind says the market is reliant on the aviation market, and notes the recent Qantas grounding may had an impact on the industry in general, he notes it is regulatory pressures that would have proved troublesome for Club Med.

“Running an island is extremely complex, in both a commercial and regulatory sense. There are so many regulations to deal with for a business owner, and it’s incredibly complex when compared to mainland operations.”

“We think it’s an attractive destination, a unique product, and being a network of national parks has a pretty good attraction there. It’s a strong product, but commercially, it’s just very tough right now.”