Travel services firm Holiday Extras has acquired a vacation insurance company in a £2m deal which will see the firm team up with Thomas Cook.

The takeover of Essential Travel is expected to add 300,000 bookings a year to the Hythe-based company, which books services like airport hotels, parking and holiday insurance.

Essential Travel had been owned by Thomas Cook for three years and the deal signals the beginning of a long-term commercial contract with the travel agent.

Holiday Extras will become the national firm’s exclusive distribution partner for hotel, parking and lounge products from today.

Chief executive Matthew Pack said: “This is a strategic move for us and will help strengthen our position as market leaders.

“We believe in organic growth, it’s worked very well for us so far.

“However, acquiring Essential Travel is a great opportunity for us, as is the chance to secure Thomas Cook’s business on a long term basis.”

The Essential Travel brand will continue and its new owner plans to develop it in the direct insurance area, telephone support and ease of booking.

The company employs 14 people, who will to continue to work from their existing office in London.

Now in its 30th year, Holiday Extras has a turnover or £173m and handles more than a million calls to its call centre every year.

Founded in 1983 by former Saga employee Gerry Pack, father of chief executive Matthew, the firm acquired airport parking operator BCP in 2007.