CHINESE conglomerate Fosun is buying a 5 per cent stake in Thomas Cook for £91.8 million as part of a deal that the travel operator hopes will help it cash in on China’s £85 billion tourist market.
Fosun, which already has a foothold in the European travel industry through its control of France’s Club Med, aims to buy further stock in Thomas Cook to take its holding to 10 per cent.
It is the latest episode in the 174-year-old UK firm’s recent history after last November’s shock departure of chief executive Harriet Green, who helped narrow losses after a campaign of cost savings and purge of low-margin operations.
Thomas Cook said the deal would give it access to the fast-growing Chinese tourism market “in partnership with a company with significant experience in Chinese leisure and tourism”.
Chief executive Peter Fankhauser said: “China is extremely potent, extremely fast growing, it’s even bigger than the US in terms of the number of foreign trips. This is the opportunity for us to step in.”
Chinese executives were wooed by a trip to Thomas Cook’s premium “concept hotels” in the Canary Islands and Fankhauser said flight connections from China to Spain would be explored.
He said he would be “delighted” by an upturn in Chinese tourists to the UK but said an easing on travel restrictions for Chinese visitors would help.
Trips from the UK to China were a more specialised market but the development of Fosun’s Atlantis resort in the country with South Africa’s Kerzner – which is behind a similar destination in Dubai – could open it up.
Thomas Cook said the deal also meant collaboration opportunities with Fosun’s other travel and leisure businesses including Club Med – already a key partner in France.
Chairman Frank Meysman said it was “a major milestone in Thomas Cook’s 174-year history designed to bring significant benefits to Thomas Cook and its shareholders”.
The deal aims to cash in on tourism from China, the world’s largest outbound tourist market with total expenditure of £85bn in 2013.
Thomas Cook said the first three quarters of 2014 saw total spending of this market grew by 17 per cent, with total number of trips abroad up 20 per cent to 107 million.
It plans the development of concept hotel brands tailored to the Chinese leisure market, as well as the use of its “destination management organisation to service in-bound travel to Europe and Russia from China”.
Tour operator activities to organise international travel under the Thomas Cook brand name will be set up in China.
Thomas Cook said it was to increase the level of its permitted non-European ownership – which protects its operating rights and status as a European airline – from 40 to 45 per cent in the light of yesterday’s announcement
But Fankhauser said there were “no initial plans” for Fosun’s stake to increase above 10 per cent and the Chinese firm said it had no plans for a takeover.
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