TUI moves into Russia and Ukraine
TUI Travel is to gain a foothold in Russia and the Ukraine through a new joint venture.
The company is taking majority stakes in Russian tour operating and travel agency firm VKO Group and Voyage Kiev based on Ukraine.
The joint venture also plans to take a 75% controlling stake in Mostravel, a Turkey and Egypt destination specialist based in Moscow.
The moves come a year after TUI Travel announced that it was forming a joint venture with S-Group Capital Management, together with affiliated parties, to develop its Russian and CIS leisure tourism presence.
The joint venture – 51% owned by S-Group and 49% by TUI Travel – will be an investment holding company, financed proportionally by both parties.
It is expected to invest up to $40 million by the end of the year with TUI Travel’s share of this investment expected to be up to half the total.
Six million Russians and one million Ukrainians travelled on traditional sun and beach holidays last year, which combined is equivalent to a third of the size of the UK sun and beach charter market, according to TUI.
Chief executive Peter Long said: “TUI Travel will be the first major international tour operator with a significant presence in Russia and CIS.
“We are delighted with our partnership with S-Group which combines their local business knowledge and expertise with our vast experience in leisure travel.
“The agreements with VKO, Voyage Kiev and Mostravel will provide us with the scale and expertise to make a large impact on these markets.”
Vladimir Yakushev, managing partner, S-Group Capital Management said: “These deals start consolidating the market and will help to introduce market leading practices which will enable customers in Russia and Ukraine to enjoy high international tourism standards.”
by Phil Davies
Phil Davies
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