Thomas Cook, the tour operator, is in advanced talks to acquire businesses in Russia and China as it seeks to tap into new growth markets.

Manny Fontenla-Novoa, chief executive, said that after several months of searching for the right partners, a deal in Russia was now “very close”, while he hoped to agree a purchase in China in the first quarter of 2010.

The Spanish-born executive said that he was particularly excited by the prospects for selling holidays to the Russians, who were flocking to Turkey and Egypt — two of the group’s top destinations — in increasing numbers.

Mr Fontenla-Novoa would not identify the two targets but said that both deals would involve Thomas Cook taking a majority stake and retaining the current owners under a two or three-year earn-out agreement.

In a full-year trading update, Thomas Cook said that the summer had finished on a high note thanks to a surge in late bookings. It said that the UK market had effectively sold out, with bookings down 10 per cent, in line with the cut in capacity.

As a result, it was able to hold the line on pricing, with average prices up 8 per cent.

It said that winter bookings had also started to improve after a weak start. Cumulative bookings so far are down 11 per cent, slightly worse than the 9 per cent capacity cut, although in the past four weeks, the decline was just 3 per cent. Mr Fontenla-Novoa said he was optimistic bookings would come through.

Although it is still early days for next summer, Thomas Cook has already sold 11 per cent of its holidays and better deals with hoteliers meant margins were strong. Like TUI Travel, its main competitor, the group does not expect to have to cut capacity — the first time in almost three years they will have maintained levels.

Mr Fontenla-Novoa said that although he was “not looking at these things through rose-tinted spectacles”, particularly in the light of rising unemployment, he was hopeful that, after a 30 per cent cut in capacity in the past two to three years, the bottom had been reached.

He dismissed suggestions that the “staycation summer” was here to stay, adding: “Overseas holidays offer much better value, a higher quality product and — importantly — the weather. Given fears over unemployment, people will leave it later to book, but I do believe demand for package holidays will remain robust next year.”

Despite his assurance that the group would meet market expectations this year and next, the shares fell by 8½p to 232.3p — below the 240p at which a 43.9 per cent stake held by Arcandor, the failed German retailer, was placed last month.

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