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Major Spanish hotel chain H10 Hotels and international tour operator Transat A.T. Inc. to create 5-hotel, 1,600-room joint venture in Mexico, Dominican Republic
International tourism companies H10 Hotels, based in Barcelona, (Spain) and tour operator Transat A.T. Inc., based in Montreal (Canada) 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."
About H10 Hotels
H10 Hotels was founded at the beginning of the ’80s in Barcelona, Spain, and operates 40 hotels in 14 destinations, for a total of more than 11,000 rooms, most of which it owns. One of the top 10 hotel companies in Spain, H10 Hotels plans to grow further in the Caribbean and Europe. H10 Hotels' commitment is to offer its clientele exceptional locations, specialized services, a carefully selected cuisine and facilities constantly updated to guarantee the highest quality.
Transat A.T. Inc. was founded in 1987. It is an integrated international tour operator with more than 60 destination countries. It distributes products in over 50 countries. A holiday travel specialist, Transat operates mainly in Canada and Europe, as well as in the Caribbean, Mexico and the Mediterranean Basin. Montreal-based Transat is also active in air transportation, destination services and distribution. It is a public, widely held company listed on the Toronto Stock Exchange with annualized revenues of approximately CAD3 billion. (TSX: TRZ.B, TRZ.A)
Transat Conference Call — Transat will hold a conference call for financial analysts, investors and media representatives today, at 10:30 am, Montreal time. Dial 514-861-2909, 1-888-789-9572 or 800-6578-9818. Name of conference: Transat. The archived call will be available at 514-861-2272 or 1-800-408-3053 access code 3243905 pound sign, until Tuesday, December 4, 2007.
Caution regarding forward-looking statements by Transat
This news release may contain forward-looking statements. Factors that could lead actual results to differ materially from those contemplated by the forward-looking statements include general economic conditions, competition, extreme weather conditions, disease outbreaks, war, terrorism, and other risks detailed from time to time in the Corporation’s continuous disclosure documents.
These forward-looking statements, by their nature, necessarily involve risks and uncertainties, many of which are beyond the Corporation's control that could cause actual results to differ materially from those contemplated by these forward-looking statements. The Corporation considers the assumptions on which these forward-looking statements are based to be reasonable, but cautions the reader that these assumptions regarding future events, many of which are beyond its control, may ultimately prove to be incorrect since they are subject to risks and uncertainties that may affect the Corporation. For additional information with respect to these and other factors, see the Annual Information Form and Annual Report for the year ended October 31, 2006, filed with Canadian securities commissions. The Corporation disclaims any intention or obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.