Transat's hotel division plan moving ahead

Transat will spend $750 million over the coming years to develop a hotel chain in Mexico and the Caribbean, with a plans to hire a president within the next few weeks to head up the new division.

Transat co-founder and CEO Jean-Marc Eustache, who detailed the plans during a conference call about the company’s 2017 results, stated that he will devote the next 18 to 24 months until his retirement to develop the hotel chain, while Annick Guerard runs the company as chief operating officer.

Eustache said a president for the hotel division will be hired within weeks to put the plan in action and that Transat plans to purchase and refurbish one hotel and a piece of land this year as it looks to build a network of 5,000 rooms, 60 per cent of which it will own and manage, over the next five to seven years.

In October, Transat sold its 35 per cent stake in its Ocean Hotels joint venture for $186 million. The company also signed a deal last month to sell its Jonview Canada subsidiary to a Japanese company for $44 million.

Transat said the hotel development and steps it has taken over the last three years to stem losses will enhance its ability to defend its turf against Air Canada Rouge, WestJet Vacations and Sunwing.

The Montreal-based company has simplified its fleet to give it more flexibility, improved its digital footprint, augmented the amount of trips it sells directly and improved revenue management.

The company earned $148.1 million, up from $34.9 million or 95 cents per share a year ago.

Revenues for the three months ended Oct. 31 grew 14.1 per cent to $698.6 million, helped by an 8.7 per cent increase in the number of transatlantic customers.