The boss of Thomas Cook’s Chinese parent company dismissed speculation that it wants to sell the brand while setting out plans for growth and differentiation
Andrew Xu, executive president of Fosun Tourism Group, made a firm commitment to the brand while dismissing speculation of a possible sell off.
Speaking to Travel Weekly sister brand Travolution last week on a visit to the UK, he described its international travel brands as “core assets”.
Speculation of a potential sell-off followed holding group Fosun International making a 2% to 3% reduction in its majority shareholding of Fosun Tourism Group. Fosun remains a 79% shareholder in the group.
The tourism group, which is publicly listed in Hong Kong, acquired the Thomas Cook brand in November 2019 following the collapse of the iconic travel firm.
It also owns all-inclusive operator Club Med and Atlantis Sanya, a tourism and entertainment resort on the South China Sea.
Xu said: “Fosun International has identified Fosun Tourism Group as one of its core assets. Fosun will keep its commitment to us and will absolutely control their holding position in the group. That is clear.
“We are trying to optimise the business model of Thomas Cook and Thomas Cook China and we will keep our commitment to this brand and we will not sell. Fosun Tourism Group, including Thomas Cook and Club Med, is a core asset.”
Xu said Fosun was “open-minded” with regards to potential strategic partners interested in coming in as a minority stakeholder that have synergies to drive the tourism group forward.
Fosun’s vison for Thomas Cook is to differentiate the brand through the product it offers to drive higher margins, “so we can be more sustainable in the future, so when tourism faces another period of uncertainty we can survive,” Xu said.
Following the Covid pandemic, and a succession of other crises that preceded it, uncertainty in global tourism is a “normal thing” and the question is “how to develop sustainably in such uncertainty,” he added.
Fosun’s global presence will allow it to mitigate its risks by being present in various markets and this will require a different brand strategy in the UK for Thomas Cook than in China, where it is relatively unknown.
Fosun wants to maintain the high levels of brand awareness Thomas Cook still enjoys in the UK but alter the perception of it as being primarily a mass-market mainstream retailer, operator and airline.
Thomas Cook wants to tap into its heritage as a travel pioneer for people who are looking for adventure and to discover more far-flung places.
“In Europe it’s easier to apply our marketing strategy; everyone knows Thomas Cook because we have a fundamental brand awareness here,” Xu said.
“But because of the heritage of the old Thomas Cook, people will think it’s a mass market mainstream brand with thousands of stores and its own airline. We need to work hard to change this.”
Thomas Cook is seeing sales up by around 21% consistently on last year and the brand says average selling prices are up and it is not seeing a drop off due to the cost-of-living crisis and potential recession.
All-inclusive is on the rise as people look to lock in prices for next year and Thomas Cook expects long-haul to return strongly so more indirect flight options will be added, particularly for customers travelling east.
“We are hoping 2023 will be reasonably stable and an opportunity to really trade the platform we have built,” said Xu.
“So much of our agents’ time has been spent on amending and cancelling hopefully the administration will become easier and they will be able to use that time to find more long-haul holidays and make appointments with customers.
“Once we are through that initial burst hopefully we can then start to shift the customer service team to be a much more proactive sales team.”
Although the economic outlook in the UK is challenging with inflation weak sterling, Club Med bookings are running at around 30% ahead of pre-pandemic levels. Half of UK Club Med sales come direct, compared to 70% globally.
Xu said ski is “booming” and long-haul summer sales to destinations like the Indian Ocean ad the Caribbean are driving growth.
He added that Fosun was not in a rush and does not plan to expand aggressively in Europe until it has properly defined its business model.
He also expects the volume of travel between China and Europe to rebound significantly once strict Covid restrictions are finally relaxed for Chinese outbound travellers.