#13 - Bâtir un tourisme au service du vivant - Franck Gervais, Pierre & Vacances Center Parcs

I realized the drama unfolding before us. On new sites, Center Parcs, what we want to do is to no longer go to places that have not already been artificialized, that have had a first life. Now, we are projecting ourselves to 2030, asking what is behind reinvention, how can we go a step further. The regenerative project where we come with a tourism project that can be mixed, with a project that would meet local needs, I think that would be a magnificent achievement.

Hello Eric.

CAP works for me.

I'll give two answers. The first is Brittany. We are lucky to have a small house there, in a magnificent corner of Finistère which is a truly authentic place, the A of CAP. So it has been preserved, magnificent, in the heart of nature. And the second, obviously a favorite, I will mention a Center Parcs, the Center Parcs of Landes de Gascogne. It's the last one we opened in France, between Bordeaux and Toulouse, and it is magnificent, in the heart of the pine forest. And so, young and old, truly recharge.

So the Pierre et Vacances Center Parcs group includes four brands: Pierre et Vacances, Center Parcs, Maeva, and Adagio. We are a French group, but we are the European leader in proximity tourism. What is proximity tourism? It is tourism where customers travel 300 to 500 kilometers from home to reach the tourism destination, so we are present in five countries mainly and our clientele is very local, as I said. And the characteristic of our four offerings is to provide experiences that are both unforgettable for families, and we have a very family-oriented clientele, unforgettable, something that marks them for a long time. And the second point, these are experiences that reconnect to the essentials and disconnect from everything that pollutes us every day, including this smartphone which is a real leash. So we are disconnected from all that. All types of pollution to reconnect to two essential things: your loved ones, essentially family, and nature. So it's a group that does 2 billion in revenue, employs 13,000 employees, and is a magnificent group made of authentic brands.

So this is the C of CAP, Courage, I think, that comes in. Honestly, it wasn't easy, it was a real challenge to arrive at the head of the group in January 2021. So me, as you said, I came from the Accor group, a magnificent group where I was head of Europe, in a comfortable position, not that there wasn't work, there were plenty of things to do, but in any case, it's a large established group, no cash flow problems, no problems... it has few major problems, and the Pierre et Vacances Center Parcs group, it had been having quite a few problems for 10 years. Business model problems, profitability problems, performance problems, cash generation problems, not enough development. And Covid, from March 2020, completely knocked it down. So it was really the pre-final blow. So when I arrived, we were in a near-bankruptcy situation for the group. And so we were in a situation of trying everything, everyone, employees, shareholders, our owners, our creditors, everyone, to attempt survival. There was a small chance it would work, maybe 15% chance, and there was an 85% chance it would fail. And so we saw many post-Covid disappearances of groups, either groups that were dismantled or groups that completely disappeared with social plans, people being laid off. And we did everything, it lasted two years, we fought like dogs to resist, saying this group deserves to survive, and so we will project it and reinvent it. And that's where we created, implemented the Reinvention plan, which since then has been adopted by many people. I don't own it at all, but in any case, I think we were one of the first to adopt it. And we said, why reinvention? Because we need to reinvent the group, without detailing everything. But before, we were first a real estate developer, historically, in 1967. We chose to stop that and become a tourism operator, but one that no longer does real estate development. That also has many advantages on the subject we will talk about, which is the environmental footprint, territories. So that's an example of reinvention of the group. But we said, this group must embody the reinvention of tourism. Because tourism has been changing for 20 years, essentially. It accelerated due to Covid. People travel less long, less far, and more often, with a much more developed awareness of their travel and a desire to discover things, to learn. And so, the aspect of crossing the Atlantic or Pacific to go sunbathe on a beach for a week, that's pretty much over. So we wanted to embody this reinvention of tourism.

From a personal conviction. In fact, when I arrived at the head of the group, we were in the middle of Covid, we couldn't see each other. I couldn't visit the sites. So I had to do about a hundred video conferences. With all our staff on site, the park managers, the residence managers, the executive committee, and everyone, we had a conviction around our Reinvention project, that it was a triangle that absolutely had to work together. None of the three sides could be missing. The three sides of the triangle were the customer experience. Customers want to live experiences. If there is no interest in traveling, seeing a site, a location, they won't come. So we had to create quality experiences. The second point was to have a very ambitious CSR component, societal and environmental. We'll come back to that from the start. And the third point was the return to economic performance that allows us to reinvest, and also to remunerate shareholders. These are things that hadn't been done for a long time. And so that was really the basis of our project, our 5-year projection. And so in September 2021, indeed, there is a form of, we can call it courage, conviction, we can maybe even call it carefreeness. A big risk in any case because at that time in the group we were at a period where we didn't know if we would find new shareholders. We were basically trying to deleverage by a billion euros and reinject about 700 million in equity into the group. And we were at a time when we doubted that anyone would trust us and put money in, which our shareholders did. And so I thank them again. And so with all the colleagues, whether managers or field employees, we share this conviction, we carry the ambition of the group. And with Émilie, as you said, who is the group's sustainable development manager, we said to ourselves, we can't miss this CEC. It was the first edition, so for you it was also a novelty. What were we going to learn, what were we going to discover? It was a unique opportunity, it really matched what we were looking for. So we spent time on it and she attended all the sessions. With also another colleague who is the head of transformation at my place. I objectively and honestly did not attend all the sessions. I must have attended a third of the sessions because for the other two thirds, I was at the commercial court and so I didn't really have a choice. It's like school, you have the compulsory part and the optional part. There, it was the compulsory part, so at the commercial court, I had to be there. But I remember that session in September 2021, inaugural, we were in Cachan, which was that famous wake-up call for me, where I realized the drama unfolding before us, and with figures around biodiversity. And objectively, I was not aware of those figures. And I remember very well the figure that you had cited, with Valérie Masson who also came, saying in 30 years, there has been a decrease of 80% in the number of insects in Europe. Marine species, that was minus 40% in 40 years. Temperature rise, that's it, we all know it, we are experiencing the effects this summer, last summer, we experienced it in 2003. And your point was to say, if I create this CEC, it's because the answer belongs to companies, first to companies. To individuals, to the government, okay, but first to companies. And there, in fact, everyone at the end of the session, after a year or a year and a half, said but here is how I commit myself, to carry the change. And in fact, I don't wait for someone else to carry it for me, but it's me who will set the example. And that's what we do, what we try to do, by saying proximity tourism, when you travel 300 km from home, you have a carbon footprint that is 10 times lower than in long-distance tourism. That doesn't mean there will be no more long-distance tourism. I am convinced that we need to cross cultures, cross habits, know history. So we need to take our children to America. I was going to say the United States, I'm a bit less of a fan lately. To America, to see the American continent, to see the Asian continent, African, it's fundamental, but much less than before. And to have this reflex to go closer to home, as we did during Covid, because there are plenty of historical, cultural, heritage, natural riches. France is the best example and we see that tourism has changed. It's a structural change that we are responding to, in a truly long-term way.

So I'll mention three. The first is decarbonization. The second is the awareness that we create and improve around nature. I'll come back to that. And the third is for all future development. Can we reconcile consumption, growth, but reasonable? So reasonable development. On decarbonization, we committed to a reduction of our carbon footprint. So we are at minus 20%. The target is minus 50% by 2030 of our carbon footprint compared to 2019. So division by two. We are at a little more, well a little better than minus 20%, a small half of the way. There remains half, so what have we done? We took consumption savings measures, that's for sure. We carried out all the technical studies to reduce all elements of leakage, loss. We also engaged by involving customers, saying, well, just because you are in a tourist residence, you paid for your stay for a week, doesn't mean you should run hot water all day for your shower. Because there is an impact behind it, so run it for the duration of your best song. It's a good reflex, so if your best song lasts 10 minutes, okay. What remains ahead of us on this first aspect of decarbonization is, we have started, but it's the change of energy mix. To really move towards decarbonized energies, we have started, we just changed on one of our residences in Branville, Pierre et Vacances, we just installed wood biomass. That's how we heat our latest Center Parcs in Landes de Gascogne. We have geothermal, we have photovoltaic, but today we still have carbon energy, especially in Germany, Netherlands, on our sites, and so we need to invest to switch to decarbonized energy. That's our first axis. The second axis is the nature subject. We want both to preserve it and also to ensure that during the week we are lucky to have our customers with us, they are there for a week, we want to let them touch what nature is. And we have this unique opportunity for them to take that home with their children and thus, good practices in terms of, obviously, waste sorting, awareness, but especially knowing what fauna and flora are and how to preserve them, why it is an essential element. And so Center Parcs, which is the most advanced in the group on this. Why? Because Center Parcs is a domain of 150 hectares in the heart of nature. We committed, today it's the case in half of our parks, we committed that by 2028, 100% of our parks will have nature trails offered free to all our customers. Where did that come from? It came from one of our parks in the Vienne, at Bois-Audin, with the environmental biodiversity manager there who had a real passion for biodiversity, insects, and who said but I could create a trail for those interested, the rare customers who would be interested. And then it was a hit, so his name is Olivier, I pay tribute to him, it was a hit, more and more customers came and so we really expanded this trail, a form of awareness trail to all parks, and today it's a real success, meaning we learn by taking off our shoes, having contact with nature, to say but why is there a pond here? Why are there so many insects and why are they necessary? Why do we cultivate this type of product differently each season? Why and how is nature preserved, regenerated? And that is something that is popular with our customers and we have somewhat of a vocation to say we absolutely want to reconcile our customers with nature and let them touch it, young and old, because ultimately as adults, we have as much ignorance I think as our children. That's the second axis, and the third axis is development, why? Because as you said, tourism has a carbon footprint, its contribution to the global economy is about, or in France it's the same, 8%, and the carbon footprint is a little more than 10%, so we see there is a small delta, a small overconsumption that needs to be resolved. So given our positioning, we answer part of the question by saying we are on local tourism and we also encourage each of our customers to take the train, because when they are with us, they no longer need their car. It really has no interest. But then, we carry out actions ourselves, whether during operation or development, we ask ourselves how do we do things differently. I'll take the example of the mountains. The mountains, for years, resorts were created. In the 70s, ski lifts, buildings, real estate. Today, with global warming, we know that we will have to go above 1800 meters for resorts to find sustainable snow. The buildings, real estate are there, so there is no need or very little to build new buildings in the mountains. However, there is a huge need to renovate them because they date from the 70s-80s, they are costly, they have a contribution. Sometimes they are thermal and acoustic sieves, and so there is a huge effort to be made. And so we just made a prototype in Avoriaz, where the group was born, on one of our residences. We did internal thermal insulation, we divided by two the building's consumption and thus its footprint. That, we want to do everywhere and so gradually renovate our buildings. On new sites, those, we basically want in the mountains to renovate more than build, clearly, and even almost no longer build. On new sites, Center Parcs, what we want to do systematically is to no longer go to places that have not already been artificialized, that have had a first life. Example: military terrain, former military terrain, former industrial terrain, so our last two parks respond to that, in Belgium and Germany, former industrial wasteland, former mine in Belgium, and former military terrain in Germany, where we arrive, we give new life to that terrain, it has already been artificialized, we renature next to it, and above all we preserve jobs, we recreate jobs, because we are a non-relocatable job, and where each of our countries in Europe loses jobs, industry, now services, we come to recreate jobs. So that's the three key axes of our roadmap.

Plenty of other levers. In fact, it's an infinite subject for us. Water, as you mentioned, is key. We consume water, especially in Center Parcs. So we ask ourselves, how can we have a reduced footprint on water. There are experiments being launched, reflections with large industrial groups specialized in the subject. Maybe two examples. The first is in our sites, increasingly the water that circulates outside, in what we call the wild river. All Center Parcs customers remember. I remember, I've been there often with my family. For you or your children. So the wild river is heated water that takes you through meanders, it's very nice. But it serves during the day, at night, what does it do? It cools down, so you would need to reheat it the next morning. What we do is we empty the water from these outdoor pools, we store it in huge reservoirs that can be up to 15 times the size of municipal swimming pools. It's closed, stored, and we reopen the pools the next morning, and the water has hardly lost any temperature. So imagine the savings in water and heating we make through that. Also the recycling of wastewater in a Center Parcs, if there is a lot of wastewater, we have 8 million customers per year, so wastewater in a site like a Center Parcs, a Pierre et Vacances, is quite significant. Rather than evacuating it into conventional networks that then get treated in industrial installations, we ask ourselves how can we use this wastewater locally? For watering, we have very numerous green spaces, how can we reuse all that? How can we recycle within the Center Parcs itself? And so that's what we are working on, saying how do we aim to reduce our consumption, so energy, water, these are the two key themes indeed.

So we are followed by financial investors and we have, as you said, 300 sites and therefore with many, thousands of owners, whether institutional or individual, they own the assets. An asset is measured by its value. Economic value, but also value over time. And what we know is that if an asset does not meet current or future obligations in terms of consumption, it will lose value. So they are eminently aware that we will have to work on the asset to make it compliant with the 2030 regulations, but also 2040, 2050, which we see coming gradually. So first, we carry out this educational work to share with all our owners the current and future obligations, showing that the economic equation is not antithetical to the environmental equation. On the contrary, the case of the Capella residence in Avoriaz, which I mentioned, is a very good example because we consume less at the same time. So we, as operators, are better off. The value of the asset is revalued. So it's really a win-win investment. However, as you said, you have to invest upfront. And so you have to plan, anticipate. There also needs to be profitability. And that's what we are seeing on some of our Center Parcs. By installing photovoltaic on the site, both carports and a photovoltaic farm at Village Nature, which is our Center Parcs near Disney in Marne-la-Vallée, we see that we will be able to generate a third of our electricity consumption. We already had geothermal there, we draw from 2 km underground, and so what remained, we were in electricity consumption, a third of which we switch with photovoltaic. And so we show that the economic and environmental equation is largely compatible. For that, you have to invest, but that's the life of investing and not stopping. So that's it, we are really in that phase. We are talking about amounts that are significant. The advantage for all owners for us is that we know that we are not here for two years, for five years. We are here for 20 years, 30 years, 40 years. So the return on investment can be calculated over these long time horizons.

Exactly, there is a volume effect that is immediately visible.