Thomas Cook launches China joint venture with Fosun

Thomas Cook has launched a joint venture with Chinese investor Fosun called Thomas Cook China, which will target "affluent, adventurous, quality-oriented” customers as the pair look to grab a high-margin share of China's fast-expanding holiday market.

At the launch even in Shanghai the FTSE 250 company and Fosun, which last year bought a 5% stake in the UK tour operator that has since swelled to 8.2%, said the JV will offer 90 holiday packages to more than 40 international and domestic destinations.

Fosun, which owns 51% of the venture, predicted China’s outbound travel market should grow by as much as 20% a year.

Analysts at Berenberg estimated that such a compound annual growth rate in travellers equated to 170m tourists in five years time.

“The potential offered from Chinese tourism is massive and consequently the JV is something that the market is right to be excited about,” they said, though warning there was "no clear outline for the financial outlook for the JV and importantly the investment that may be needed from Thomas Cook, over and above the start-up investment of £750,000”.

Shares in Thomas Cook were up 6% to 75.95p, their highest point since late May.