Thomas Cook will expand its concept hotels, cooperate more closely with Club Med and look at the fast-growing Chinese outbound market under a strategic partnership with its new investor, Chinese group Fosun, CEO Peter Fankhauser told fvw.
Fosun will acquire a 5% stake in Europe’s second-largest tourism group for £91.9 million and plans to expand this to 10% by buying more shares on the stock exchange, it was announced on Friday. The Chinese group, which took over Club Med in February after a drawn-out bidding war, aims to be a long-term investor but said it will not go beyond this level of ownership.
Fankhauser said the strategic partnership is “an important milestone” that will give Cook new opportunities. „Our partnership with Fosun is aimed at accelerating our profitable growth strategy by allowing us to further develop our differentiated product in our core destination markets, to collaborate with Fosun‘s other portfolio businesses, particularly in France, and to access the world‘s largest and fastest-growing tourism markets with an experienced local partner.”
In particular, the Thomas Cook CEO wants to expand the portfolio of concept hotels, which currently covers more than 220 hotels and resorts, including brands such as Sentido, Sunwing and Sunconnect. “After a phase of strong growth we now want to focus more strongly on the quality of our hotels. The investment by Fosun and the management contracts will enable us to have a stronger influence,” Fankhauser said.
Fosun will set up a fund to invest in existing or new hotels and Thomas Cook will then operate these properties through a management contract. The two groups will set up a working group to develop joint projects. Until now the tourism group’s hotels have been run through a franchise system under its asset-light strategy.
Thomas Cook will also increase its cooperation with Club Med. “Thomas Cook in France with its travel agencies and portals is already the largest sales partner for Club Med. We can certainly expand that, including in Belgium and western Switzerland,” Fankhauser said. The French firm’s international resorts in long-haul destinations could also be marketed through Cook’s tour operator programme.
China tour operator plans
In the medium-term, Cook will consider developing concept hotels for the Chinese market and entering the country’s fast-growing outgoing travel market. Cook could use its destination management organisation to service inbound travel to Europe and Russia from China, and develop tour operator activities in China to organise international travel for Chinese holidaymakers under the Thomas Cook brand name.
Jim Qian, president of Fosun Tourism and Commercial Investment Group, told fvw that Fosun could support this approach as it already owns one of the largest travel agency chains in the country. China is now the world‘s largest outbound market with a total expenditure of US$129bn in 2013, and continued growing at a double-digit rate last year.
Explaining the group’s decision to invest in Thomas Cook, Wang Qunbin, Executive Director and President of Fosun, said: "Our strategic partnership with Thomas Cook is another strong example of Fosun‘s status as a trusted and experienced partner for leading international tourism businesses. Thomas Cook‘s strong brand heritage and its leading position in the European travel market, together with Fosun‘s extensive expertise and resources, will capitalise on the increasing demand for international leisure travel. The investment in Thomas Cook complements our other recent investments in the sector, providing opportunities for further value creation."
Separately, there is a managerial reorganisation at Thomas Cook AG, the subsidiary covering all activities in Germany. Following his appointment as Group CEO last November, Fankhauser is handing over the position of chairman to Christoph Debus, the airlines chief, and will switch to the advisory board instead. Debus’ position on the supervisory board will be taken over by Karl Schattmeier, head of Thomas Cook Hotels & Resorts.
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