Mexican Company Is Buying Hotel in El Paso : Trade: It is one of a number of firms south of the border that are making U.S. acquisitions.
A Mexico City-based luxury hotel chain will purchase the landmark Paso del Norte Hotel in El Paso--another example of Mexican companies’ drive to win market share in the United States through acquisitions.
Officials of Real Turismo, which operates nine Camino Real hotels and four resorts in Mexico and Central America, are expected to announce today that the firm was the winning bidder at a foreclosure auction for the 375-room Texas hotel.
“We hope this will be the first step in our expansion into the United States,” said Eduardo Abud, Real Turismo’s general manager.
Other Mexican firms have also targeted troubled U.S. operations in seeking a foothold across the border.
In 1989, glassmaker Vitro bought Tampa-based Anchor Glass Container Corp. and Latchford Glass of Huntington Park. Cementos Mexicanos, Mexico’s largest cement company, became the world’s fourth-largest cement company by purchasing a number of small U.S. cement companies.
Earlier this month, Aeromexico joined an investor group to bid for Houston-based Continental Airlines, which is operating under Chapter 11 bankruptcy court protection.
“Acquisitions are the best way to get access to a market,” said Sergio Martin, a partner in the economic consulting firm Macro Asesoria Economica. “Mexico is just following a tendency toward globalization that the whole world is following.”
Abud would not say how much his firm will pay for Paso del Norte, saying only that the bid was considerably less than the $65 million it cost to renovate the downtown El Paso hotel six years ago.
The company, which had revenue of $128 million last year, is also looking at hotels in Los Angeles, San Diego, San Francisco, Florida and other parts of Texas. “We are interested in buying established hotels that might not be doing well,” Abud said.
Abud said Real Turismo plans to change the hotel’s name to Camino Real, a name familiar to the company’s Mexican clients, in order to attract more Mexican business travelers to the United States and improve occupancy rates. Less than 7% of Paso del Norte’s clients are Mexicans, despite the hotel’s location on the border.
Marketing to the growing number of business travelers to the United States would be a key strategy should the firm acquire more U.S. properties, he said. The burgeoning trade between the countries, expected to grow significantly under the proposed North American Free Trade Agreement, will bring more well-heeled Mexican travelers to the United States looking for the comforts of home, or at least a hotel name from home, Abud said.
Abud said he envisions a group of hotels in major U.S. cities with bilingual staffs and menus that include real Mexican food.
