Thomas-Cook plans to acquire up to 50 hotels and resorts around the Mediterranean countries, in particular Spain, Greece, Cyprus and Turkey, in a deal with his partner Fosun Chinese Fund that owns Club Med.
Chief executive Peter Fankhauser announced the move as the group unveiled improved third-quarter results that reveal a reduction of losses before taxes of 89%.
Joint?venture deal
As reported by News HOSTELTUR, the events in Tunisia and the possible output of the euro in Greece will have an impact of 25 million pounds (35.6 million euros) in profits before taxes (EBIT) for the whole of the year 2015.
As Peter Fankhauser noted: “Thomas Cook and Fosun have agreed a memorandum of understanding to establish a hotel investment vehicle.”
Cook and Fosun signed a joint?venture deal in June. Fosun took over Club Med in February and acquired a five per cent stake in Thomas Cook in March.
Initial investment
The pair now plan to “acquire 30 to 50 hotel and resort properties over three to five years“ with Fosun providing the initial investment and Thomas Cook managing the properties under its existing hotel brands.
The investment platform will “support the improvement and development of our differentiated hotel offering”, said Fankhauser, who added that key details had been agreed with Fosun and that it was already recruiting staff for the joint venture.
Due diligence
As he told investors: “Demand for our own-brand hotels, which provide high returns, is accelerating, up 38 per cent so far this year. We are trying to recruit out of the hotels we already have under our brands, [where] we know the owners and have a feeling they are willing to sell and we can make a good deal.”
Furthermore, chief financial officer Michael Healy said the company was carrying out due diligence on specific hotels.
