H10 Hotels and tour operator Transat have agreed to create a joint venture to own and operate five existing hotels currently owned by H10 Hotels in Mexico and Dominican Republic, subject to approval by Mexican regulatory authorities and usual closing conditions.
H10 Hotels, a Catalan hotel chain with more than 40 hotels in 14 destinations, will retain a 65% interest in the new company, while Transat, a major tour operator to Mexico and the Caribbean, also active in Europe, will acquire the remaining 35% (with an option to go to 45% within five years of closing) by contributing to the joint venture through a capital increase representing a consideration of US$55 million in cash. Closing is expected during the current quarter.
The five H10 Hotel establishments in the Caribbean and Mexico will be owned and operated by the joint venture. In the Riviera Maya, Mexico, holdings will include the H10 Hacienda Maya (320 rooms), the H10 Punta Coral and H10 Punta Turquesa (586 rooms in total, to open in December 2007), and in Punta Cana, Dominican Republic, the joint venture will offer the H10 Ocean Blue and H10 Ocean Sand (708 rooms in total), for a combined total of more than 1,600 rooms. All hotels are beachfront, high-quality properties.
Dominican Republic and Mexico are two key destinations for Transat, which sells nearly 900,000 sun packages to Mexico, the Caribbean and Central America annually to Canadian and French travellers. Transat is one of the largest hotel room-night buyers in the area, and has been a commercial partner of H10 Hotels since 1999.
“Having a dynamic presence in the hotel business at our key destinations and teaming up with one of the best hotel companies in the world was among our top priorities,” said Jean-Marc Eustache, one of the founders, and President and Chief Executive Officer, of Transat A.T. Inc. “This joint venture is what we were looking for. It allows us to secure a number of quality hotel rooms and maximize the gains we derive from being vertically integrated.”
For his part, Josep Espelt, founder and President of H10 Hotels, said: “We are very pleased to partner with Transat and we look forward to expand from the existing base we will now share in Mexico and the Dominican Republic, as international tourism continues its steady growth. This partnership is designed to be scaled up over time, and each partner will benefit from the strengths and leadership of the other.”