Thomas Cook, seeking to capitalise on a tourism boom in China, is launching a joint venture in the world’s second-largest economy.
The Chinese recently overtook Americans as the world’s biggest- spending tourists. Last year, 100-million people travelled abroad and spent $165-billion. Hong Kong and Macau remain the most popular holiday destinations for Chinese tourists but an affluent minority heads for Europe.
In a bid to profit from that growing wanderlust, the world’s oldest travel agency unveiled a joint venture with Fosun International, one of China’s largest conglomerates. Thomas Cook’s chief executive, Peter Fankhauser, described the deal as a significant milestone.
The joint venture would marry its “brand heritage and expertise in international travel” with Fosun’s “local market knowledge and operation resources”. The two firms are putting in a combined £1.6-million to launch the venture that will also sell internal tours.
Thomas Cook, which began life in 1841 by selling rail excursions to a temperance rally in Loughborough, has been trying to reinvent its business for the internet age after it almost collapsed in 2012 , following a slump in bookings.
The firm hopes the deal will allow it to develop upmarket hotels in China that will be exclusive to Thomas Cook customers.
Fosun, which was founded by four university graduates in Shanghai in 1992, has interests spanning banking, pharmaceuticals and mining. In March, it paid £92-million for a 5% stake in Thomas Cook, raising speculation of an eventual takeover. Fosun also bought the ailing French holiday company Club Med in February, having acquired a 7% stake in 2010.
The joint venture could bring a wider range of holidays to China’s burgeoning middle class.
A new joint venture
Qian Jiannong, president of Fosun’s tourism and commercial group, said: “Today there is a lack of innovation and differentiation in the travel product offerings for Chinese tourists in China and abroad, presenting an excellent opportunity for our new joint venture to gain a competitive advantage.”
Wolfgang Georg Arlt, the director of the China Outbound Tourism Research Institute, agreed there was “too much run-of-the-mill stuff” for Chinese tourists. He said that a second wave of Chinese tourists – younger, well educated and more likely to work for international companies – wanted bespoke holidays. “They are less interested in ticking off a list of famous places and more interested in doing things,” he said, such as learning local dances, taking cookery classes or going punting in Cambridge.
But the “five countries in 10 days” coach tours most associated with Chinese tourists in Europe are likely to remain popular. Stefanie Gallob, the head of research at the European Travel Commission, said more Chinese tourists were travelling independently but the market would probably remain dominated by group travel for the medium term, because it was easier to obtain travel documents from Chinese authorities.
France was named as the top dream destination in a survey of outbound Chinese tourists conducted by China Confidential, a research arm of the Financial Times. Italy was second, followed by Britain and Germany, although the top five countries actually visited were all in Asia. – © Guardian News & Media 2015