Transat expands in Mexico

Photo: The Canadian Press

Transat president Jean-Marc Eustache arrives for the integrated tour operator's annual meeting in Montreal.

Transat A.T. Inc. says it has sealed a deal to buy land on Mexico's Yucatan Peninsula, with the goal of building a beach resort as part of its plan to develop a hotel chain in the Riviera Maya and the Caribbean.

The Montreal-based travel company says it has bought property in the village of Puerto Morelos — less than 40 kilometres from Cancun — and signed a promissory agreement to buy an adjacent property for a total of between US$54 million and US$57 million.

The move is Transat's first concrete step toward getting shovels in the sand on chief executive Jean-Marc Eustache's plan to develop a hotel chain that he hopes will better position the holiday travel company to face heightened competition from Canadian rivals.

Eustache told investors earlier this month that hotels are "where the money is today." The company is aiming to own or manage 5,000 rooms in Mexico and the Caribbean by 2024.

Transat says the promissory deal is expected to close around Nov. 1, 2018.

Located on the Riviera Maya, the palm-lined port town of Puerto Morelos sits between Cancun and Playa del Carmen.