MONTREAL — Transat has announced the intended sale of its land property in Mexico.
In a statement from the company, Transat said it has entered into a sale and purchase agreement for its land property in Puerto Morelos for US$38 million to Finest Resorts. Finest Resorts is part of The Excellence Collection and owns and operates Finest Playa Mujeres, in Cancun and Finest Punta Cana in the D.R.
Transat eyed resort development as a new division and a new direction back in 2017, when it sold its interest in H10 Hotels to start its own hotel chain in Mexico and the Caribbean.
Transat’s goal was 5,000 owned or managed hotel rooms by 2024, in key destinations including Cancun and Riviera Maya, Punta Cana, Montego Bay, Havana and Varadero.
Transat’s hotel division was seen as the next phase in its vertical integration strategy, one that already included air travel and travel distribution. Resort development has worked well for competitors like Sunwing Travel Group, which owns Blue Diamond Resorts and also has a partnership with Planet Hollywood.
By February 2018 Transat’s hotels division had a president in place and it was all systems go.
Two years later, the pandemic hit. Along with an almost complete shutdown of travel across the Canadian travel industry, Transat was grappling with the termination of its proposed merger with Air Canada. The Canadian government had given the deal its green light, but the same could not be said for the European Commission, and in April 2021 the two companies announced the termination of their agreement.
By June 2021 Transat was gearing up for a gradual return to operations, after all four of Canada’s major airlines – Transat, Air Canada, WestJet and Sunwing – agreed to the federal government’s request to suspend sun flights through the first months of 2021.
As part of that 2021 return to operations, Transat announced that due to the decline in liquidity as a result of the pandemic, and in line with the objectives of its new strategic plan, Transat’s board of directors had approved the discontinuation of the hotels division.
Transat’s statement today said the closing of the transaction is expected to occur in Transat’s fourth quarter. The proceeds of the sale will be used to immediately repay a portion of Transat A.T. Inc.’s secured facilities.
Transat’s Q2 2023 results, announced last month, saw revenues more than double year over year. Transat’s loss for Q2 2023 was $29.2 million, compared to $98.3 million in Q2 2022.
Transat added that the divestiture of the land is aligned with the company’s strategic plan to refocus on its airline activities.
