Transat to purchase land for first resort in Mexico
MONTREAL Transat A.T. has taken its first concrete step toward getting shovels in the sand on its $750-million plan to develop a hotel chain in the Riviera Maya and the Caribbean, announcing a deal Tuesday to buy land on Mexico’s Yucatán Peninsula.
The Montreal-based travel company said it aims to build a beach resort on a newly purchased lot in the village of Puerto Morelos — less than 40 kilometres from Cancun — and on an adjacent property, for which it has signed a promissory agreement.
The combined deal would cost between US$54 million and US$57 million, Transat said.
Chief executive Jean-Marc Eustache has said he plans to spend his final year or so with the company he co-founded in 1987 putting together a network of hotels he hopes will better position the holiday tour operator against heightened competition from Canadian rivals.
The company, under chief operating officer Annick Guerard, said it hopes to own or manage 5,000 rooms in Mexico and the Caribbean by 2024, in a bid to defend its turf against Air Canada Rouge, West Jet Vacations and Sunwing.
Last October, it sold its 35-per- cent stake in its Ocean Hotels joint venture for $186 million. The next month, Transat signed a deal to sell its Jon view Canada subsidiary to a Japanese company for $44 million.
Located on the Riviera Maya, the palm-lined port town of Puerto Morelos sits between Cancun and Playa del Carmen, and about a 20-minute drive from Cancun’s airport — “an important lever to attract customers,” said Benoit Poirier of Desjardins Capital Markets.
The area already hosts about 85 hotels, but only one five-star hotel, Poirier said, making the project “an excellent opportunity for Transat to establish its presence and differentiate itself in the luxury-brand range.”
He said the two properties could support up to 900 rooms, which he estimated would cost between $US200 million and US$225 million to build.