Jewel Palm Beach Resort in Playa, Dominican Republic sold by group for US$68 million
PLAYA Hotels & Resorts NV has completed the sale of the Jewel Palm Beach Hotel in Punta Cana, Dominican Republic for US$68 million ($10.64 billion).
The deal, announced last month, closed on Monday, with the hotelier and resort operator expected to collect net proceeds of US$64 million from the sale of the 500-room property. The buyer’s name was not disclosed, but Playa said the proceeds would be used for general corporate purposes.
This is the second Playa Resort sale in the Dominican Republic in the past year. Playa sold the Jewel Punta Cana Resort in December 2023 for US$82 million, while collecting an estimated net profit of US$70 million. That hotel has 620 rooms and continues to be operated by Playa under a management agreement.
These sales occurred after Playa transitioned management of the resort from third-party management to independent management from December 2022 to January 2023. Playa used this opportunity to debut its own Jewel Resorts brand. However, the company was unable to take advantage of the crucial summer 2023 sales season and was unable to supplement its sales in that market.
The company also had to close some of its other resorts in the Dominican Republic in the second half of 2022 due to Hurricane Fiona.
Following these deals, Playa will now operate four unique resorts in the Dominican Republic, totaling 1,524 rooms under the Hilton and Hyatt brands. It also operates Wyndham Altra Samana and Jewel Punta Cana in the Dominican Republic under a management agreement covering 1,024 rooms. This further reduces the size of the Jewel brand in the Caribbean, with only two other resorts: Jewel Paradise Cove Beach Resort and Spa and Jewel Grande Montego Bay Resort and Spa in Montego Bay, Jamaica.
Playa previously owned Jewel Dunn’s River Beach Resort and Spa and Jewel Runaway Bay Beach Resort and Waterpark, which were sold to Sandals Resorts in May 2020 for US$60 million, of which net proceeds were $58.7 million. It was US dollars.
Despite the consolidation of its hotel portfolio, Playa is expanding its hotel management contract portfolio and will operate Paraiso de la Bonita, a Luxury Collection all-inclusive resort in Mexico’s Riviera Maya. The 14-acre resort is expected to open in late 2024 after Playa signs a management agreement with Marriott International in the second quarter. This 100-room adults-only resort is located 20 minutes from Cancun International Airport.
Playa also announced Monday that the Kimpton Tres Rios Riviera Maya in Playa del Carmen, Mexico, has officially opened reservations for early 2025. This is the first all-inclusive resort in IHG Hotels & Resorts’ luxury and lifestyle portfolio. Playa signed a management agreement in the second quarter of 2022, during which time the resort was undergoing renovations. The property spans 326 acres and has 355 hotel rooms, an additional 100 rooms than reported in Playa’s second quarter 10-Q due to the addition of newly designed rooms during the renovation. It has become.
“Kimpton Tres Rios redefines the luxury experience on the Riviera Maya, offering guests an all-inclusive retreat carefully designed in every detail to provide tranquility, comfort, and an intimate connection with nature. We are proud to partner with IHG Hotels & Resorts to bring this first-ever Kimpt all-inclusive property to life, and the result will be a true benchmark in high-end hospitality.” Fernando Mullet, Executive Vice President and Chief Investment Officer of Resorts, said in a press release.
The total number of rooms in Playa’s managed and proprietary portfolios is listed in the release as 8,627 rooms across 24 resorts.
Playa also manages the Yucatan Playa del Carmen All-Inclusive Resort in Playa del Carmen, Mexico under Hilton’s Tapestry Collection and has five resorts on the Yucatan Peninsula and two on Mexico’s Pacific Coast. Masu.
The company’s third-quarter financial results are expected to be announced in early November. The company’s current guidance is for 2024 adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of US$250 million to US$275 million. Adjusted EBITDA at the end of the first half of 2024 was USD 177.17 million.
However, the Jamaican market weakened slightly due to the US travel advisory, disruption caused by Hurricane Beryl in the third quarter, and renovation work on Mexico’s Pacific coast.
According to Grupo Aeroportuario del PacÃfico, SAB de CV (Pacific Airports Group)’s August 2024 traffic report, passenger numbers at Sangster International Airport (SIA) decreased by 9.4% to a total of 424,600. Passenger numbers at Norman Manley International Airport (NMIA) rose 1.7% to 198,900 in August, while SIA handles about 70% of the air traffic to Jamaica. August 2024 was SIA’s second consecutive month in which air traffic decreased by 9% year-on-year, and passenger numbers also decreased for the fifth consecutive month.
In the first eight months of 2024, SIA’s air traffic decreased by 0.8% to 3.61 million passengers, while NMIA’s air traffic decreased by 1.6% to 1.19 million passengers.
Playa operates five unique resorts in Jamaica, totaling 1,428 rooms.
Resort Group’s stock was trading at about $7.82 on Tuesday, down 9% for 2024, giving it a market capitalization of $1.01 billion.
Through July 31, Playa had repurchased US$84.9 million of common stock under its US$200 million share repurchase program.
