Thomas Cook plans Chinese tie-up as it moves in to emerging markets

TOUR operator Thomas Cook is hoping to forge a tie-up with a Chinese travel company to expand into tiger economies.

The holiday group is understood to want to move into the Chinese market by 2012 as part of its drive to cash in on growth in emerging markets.

The company last week announced a deal to buy just over half of Russian travel agent VAO Intourist to help it expand in Russia and other former Soviet republics.

It is also present in India after buying back a business in the country in 2008 that it sold to the Dubai Financial Group a couple of years beforehand.

Chief executive Manny Fontenla-Novoa said: “The move into Russia is in line with our established strategy of capturing growth in emerging markets.”

Broker Numis Securities expects Thomas Cook to report annual earnings of £394.4m on Wednesday, down from £414.9m a year ago.

The broker said it preferred rival TUI Travel as an investment, citing a disappointing pre-close trading update and worse-than-expected costs.

“Subsequently, the company has announced the merger of its high street operations with Co-operative Travel; this deal has not yet had merger clearance.

“High levels of ‘exceptional’ costs have been a recurrent feature for the tour operators, resulting in a questionable quality of earnings.

“We prefer TUI Travel.”