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Thomas Cook Group Plc is teaming up with the Chinese parent of Club Mediterranee SA to gain a foothold in the world’s most populous country where travel demand is surging.
Thomas Cook and Fosun International Ltd. will create the joint venture in Shanghai to offer tours and accommodation, Chief Executive Officer Peter Fankhauser said in an interview. Fosun bought almost 5 percent in Thomas Cook this year and will also team up with the London-based company to buy about 30 Thomas Cook-brand hotels worldwide now run by franchisees.
“This is a really fast-growing market, not just in terms of Chinese going abroad, but it is also a very big and fast-growing market of Chinese traveling within China,” Fankhauser said.
Thomas Cook has so far missed out in China, where a booming middle class helped turn the country into the largest market for local travelers going overseas in 2012. While the company’s stretched finances hampered expansion, Fosun’s financial muscle will ease restrictions, and Thomas Cook in turn will send more customers to the Chinese company’s Club Med resorts globally.
Fankhauser, who became CEO in November after the surprise departure of Harriet Green, has been positioning Thomas Cook for growth with measures including refinancing and selling a stake to Fosun for 92 million pounds ($143 million).
Thomas Cook’s loss before taxes narrowed to 303 million pounds in the six months through March 31 from 366 million pounds a year earlier.
The company also said on Wednesday that it secured a financing facility for 800 million pounds that runs until May 2019, replacing an earlier agreement for 470 million pounds, and a further step in repairing its balance sheet.
Thomas Cook shares fell 0.1 percent to 156.9 pence at 11:46 a.m. in London and have advanced 23 percent this year.
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This article was written by Richard Weiss from Bloomberg and was legally licensed through the NewsCred publisher network.