On Thursday, two French ski companies announced their new deals with Chinese firms to help to develop ski resorts in China prior to the 2022 Winter Olympics.
Ski-resort equipment maker Montagne et Neige Developpement (MND Group) agreed to a joint venture deal with state-owned China Coal Zhangjiakou Coal Mining Machinery ("CCZMM") to make ski-resort equipment for the Chinese and Asian markets.
The joint venture, to be known as the MND Zhangjiakou Mountain Development, has a 110 million euro ($117.03 million) contract to design equipment for the Snowland ski resort located in Northwest Beijing. The partnership also has a contract from the Wanlong resort near Beijing. Shares in MND Group rose by over 90 percent upon the announcement of the partnership.
Compagnie des Alpes (CDA) has also announced that it has expanded its partnership with China's Thaiwoo Ski Resort, which would allow the French leisure company's staff to assist in running the operations of Thaiwoo Ski Resort in a semi-permanent basis.
"They (Chinese companies) want to benefit from the know-how which doesn't exist in China. They don't know the holiday industry very well. So they want to learn what hobbies you can offer the clients, how you manage resorts," Societe Generale analyst Marie-Line Fort said.
CDA estimated that China has between five and six million skiers. This is expected to grow rapidly ahead of the 2022 Winter Olympics in Beijing, providing an opportunity for European ski operators looking to expand in the Chinese market.
"It's a new source of growth because the market's pretty mature in Europe. China doesn't have expertise in the field. So that's a way for them to leverage their know-how in other countries which are really big markets," Fort said.
Chinese groups also have investments in French tourism operators.
Club Med, which was acquired by Chinese conglomerate Fosun in 2015, has two ski resorts in China. CDA has also been in discussions regarding the sale of a stake to Fosun.
Pierre et Vacances has formed a joint venture with the HNA Tourism Group to launch its Center Parcs brand in China. HNA Tourism picked up a 10 percent stake in Pierre et Vacances in November 2015.
