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T H E P H I L I P P I N E G U I D E F O R H OT E L , P R O P E RT Y, A N D TO U R I S M D E V E LO P M E N T S
ISSUE 3 2012
Watch list on tourism and property markets
Resort developments of local investors seen rising outside Metro Manila. Alphaland is making massive developments in Balesin, Quezon while San Miguel Corporation and Megaworld’s tourism complex rises in Boracay, Aklan. Ayala Land operates 4 resorts in El Nido while top emerging destinations are San Vicente, Puerto Princesa, Coron and Bohol. New international hotel brands are bullish to operate in Manila, led by the opening of Fairmount Raffles, Grand Hyatt, Movenpick and Park Inn. Global operators with previous presence like Sheraton, Mercure and Novotel are also returning as hotel investors want branded hotels to prevail as market gets more competitive. Air connectivity to increase within Philippine islands boosting tourist markets and allow foreign carriers to mount unlimited flights to secondary gateways such as Cebu, Davao, Iloilo and Clark. Integrated resorts and gaming projects as key drivers of tourism revenue growth. With Macau as the world’s largest casino market and Singapore’s recent success, stakeholders of the Pagcor Entertainment City need to develop a consolidated marketing strategy to compete and attract the gaming market. Premier Makati Central Business District ends 20 year hotel hiatus when it welcomes Fairmount and Raffles Hotel and business hotel Holiday Inn Suites early 2013. Due to limited building zones for hotels in Makati, emerging business district ‘The Fort’ in Taguig City is a prime choice for hotel developments.
New Wave Metro Manila is expecting 55% increase of hotel room supply from 16,486 available rooms to 25,654 between 2012 – 2016. Another 4,099 rooms are expected to open outside Metro Manila to accommodate the staggering tourism growth and puts the hospitality and tourism industry as investment vanguards. The Aquino government forecasts 10 million foreign tourists and 35.5 million domestic travellers by 2016, earning tourist receipts of P1.99 trillion and estimates to generate 7 million jobs. An ambitious target given our worsening air traffic congestion at the airport, strained Philippines - China relations, lack of basic roads and airport infrastructure in key and emerging destinations. The tourism slogan ‘It’s more fun in the Philippines’ has stimulated Filipinos to take part in the campaign and communicate iconic features that represent not only the wonders of its 7,107 islands but also its culture and way of life. The slogan has definitely caught up even on the investment level. A new genre of hotel investors are building hospitality projects led by key real estate groups as well as independent owners developing their own hotel chain. Increasing connectivity by air, land and sea has heightened travelling among the domestic market. Low cost and foreign carriers also launched flights in secondary gateways to enable both local and foreign visitors direct access to more destinations. Limited service hotels and upscale resort destinations are preferred models among hotel investors, as most want healthy cash flow, investment returns, property appreciation and building hotel portfolios. The new campaign does make developers put money where their mouth is, believing that ‘it’s more fun to invest in the Philippines.”
Cyndy Tan- Jarabata
THE 7,107 INSIDER IS THE LEADING SOURCE OF TOURISM, HOSPITALITY AND PROPERTY INFORMATION IN THE PHILIPPINES.
Tourism Tourism Indicators Indicators Foreign Arrivals Volume in the Philippines by Country of Residence
In Focus: Palawan & Boracay Palawan is a key tourism driver after Puerto Princesa Underground River was named one of the 7 New Wonders of Nature. Airline flights to Puerto Princesa doubled in 2012. El Nido, San Vicente, Coron, Busuanga and Puerto Princesa are hot spots as property sales and hotel investments from local and foreign investors have increased in the Palawan region.
Top 5 Emerging Markets
Top 5 Visitor Arrivals January-August 2012 1. South Korea 23.76% ▲ 2. United States 15.63% ▲ 3. Japan 9.78% ▲ 4. China 6.29% ▲ 5. Taiwan 5.45% ▲
Total Tourist Arrivals January- August 2012 2.85 million ▲ 9.78%
as of August 2012
1. Russia
40.35% 2. Taiwan 29.11% 3. China 19.09% 4. France 13.96% 5. Germany 10.64%
Total Tourist Arrivals January- August 2011
2.6 million
TARGET: 4.6 million Tourist Arrivals 2012
3.9 million Tourist Arrivals in 2011 Overseas Filipinos contributed 5% to the total tourist traffic. Sources of data: Department of Tourism (www.tourism.gov.ph)
Scarborough Affair The Philippines and China’s dispute over the Scarborough shoal has not halted Chinese tourist arrivals as it remains fourth largest source of visitors. A Chinese tourist stays an average of three days and spends $100-200 a day. About 15 to 20 percent of these expected tourist arrivals are headed to the island of Boracay. Bilateral relations between the Philippines and China is foreseen to come back on the right track as tension eases however both countries still claims sovereignity over the disputed shoal. 2
7107 INSIDER ISSUE 3 2012
The exclusive island of Ariara, located in Calamian Palawan, was named by British Vogue Magazine as Number 1 “Holiday Destination” for 2012. Ariara was also recognized in the UK newspaper Independent’s “Life’s a Tag: 2012 Most Surprising Holiday Destination”, where it was listed as one of the best islands to visit. Boracay named World’s Best Island Getaway by Travel + Leisure Magazine’s 2012 World’s Best Awards placing Bali at number 2. Boracay placed 4th in the same awards last year. Discovery Shores in Boracay was also named best hotel spa. Global-Estate Resorts Inc. (GERI), affiliate of Alliance Global Group will develop Boracay Newcoast as its first fully master-planned tourist hub covering 140 hectares and one km. white sand beachfront, an estimated 14 percent of the island’s total area. Five hotels are planned to be built, an additional 1,500 hotel suites to Boracay’s room inventory. San Miguel Corporation (SMC) will develop the Boracay Airport Complex, deemed to be the country’s biggest hotel and coliseum located in Caticlan and Nabas, Aklan. This US$300 million airport complex will have a 5,000 room budget hotel and a convention center to seat up to 25,000 persons.
700,000 foreign tourists visited Boracay in the first half of the 2012, 41 percent rise over the same period in 2011.
Hotels in the Pipeline Metro Manila Crimson Hotel Filinvest Corporate City, Alabang 345 Nov 2012 Raffles Hotel and Residences Ayala Center, Makati City 267 units Jan 2013 Fairmont Hotel Ayala Center, Makati City 280 Jan 2013 Holiday Inn and Suites Ayala Center, Makati City 348 Feb 2013 Discovery Primea Ayala Avenue, Makati City 142 Q1 2014 Citadines Salcedo Makati Salcedo Village, Makati City 220 Q1 2014 Worldhotels and Residences Makati City 324 Q4 2013 Movenpick Hotel & Residences Makati City 554 2015 Solaire Manila Entertainment City, Para単aque 500 Mar 2013 Belle Grande Manila Bay Complex Entertainment City, Para単aque 800 2014 Tune Hotels, Mall of Asia Aseana City, Para単aque 204 June 2014 Sheraton Hotel Resorts World 350 2016 Marriott Manila (expansion) Resorts World Manila, Pasay City 200 2014 Savoy Hotel Newport City Resorts World Manila, Pasay City 510 2016 SM Hotel Mall of Asia, Pasay City 400 Q4 2015 Tune Hotels Ortigas Center, Pasig City 182 Dec 2013 Mercure Hotel Ortigas Center, Pasig City 150 Q4 2013 Marco Polo Ortigas Ortigas Center, Pasig City 333 Q4 2013 Luxent Hotel Timog, Quezon City 118 Sept 2012 Microtel Acropolis Libis, Quezon City 88 Q4 2012 Microtel UP Technohub Diliman, Quezon City 120 Q1 2013 Tune Hotels Timog, Quezon City 140 Sept 2013 B Hotel Scout Rallos, Quezon City 160 2014 Hotel Novotel Araneta Center, Quezon City 401 2014 Kukun Hotel Bonifacio Global City, Taguig 179 Dec 2012 Ascott Bonifacio Global City Bonifacio Global City ,Taguig 220 Q1 2014 Shangri-La Hotel Bonifacio Global City, Taguig 500 2015 Grand Hyatt Bonifacio Global City, Taguig 460 Q4 2015 Tagaytay and CALABARZON Microtel Sta. Rosa Sta. Rosa, Laguna 60 Q1 2013 Kukun Hotel Nuvali, Sta. Rosa, Laguna 150 Dec 2013 Pampanga, Central Luzon Best Western Premier Angeles City 78 2012 Palawan Pangalusian El Nido 42 Oct 2012 Movenpick Huma Island Resort Busuanga 85 Dec 2012 Two Seasons Resort Coron 42 Dec 2012 Princesa Island Resort & Spa Puerto Princesa City 83 2013 Oakdrive Hotel Puerto Princesa City 61 2013 Legend Mansion Puerto Princesa City 168 2014 Iloilo and Boracay, Western Visayas Diversion 21 Iloilo City 100 2013 Richmonde Hotel Iloilo City 90 2013 GoHotels.com Iloilo City 106 2013 Crimson Hotel Boracay, Aklan 180 2014 Savoy Hotel Newcoast Boracay Boracay, Aklan 500 2016 Metro Cebu, Central Visayas Best Western Lex Capitol Cebu City 88 Nov 2012 Hong Kong Plaza Hotel Cebu City 200 Q1 2013 Summit Shores Mactan Mactan, Cebu 200 2014 Bohol, Central Visayas Bellevue Bohol Panglao, Bohol 159 Aug 2012 BE Resort Bohol Panglao, Bohol 200 Q1 2013 Cagayan de Oro, Northern Mindanao Kukun Hotel Cagayan de Oro 150 Jan 2013 Tune Hotels Cagayan de Oro 162 Jul 2013 Limketkai Hotel Cagayan de Oro 150 2Q 2013 Riviera Hotel Cagayan de Oro 304 2013 Davao, Southern Mindanao Kukun Hotel Davao City 186 Feb 2013 Park Inn by Radisson Davao City 204 Feb 2013 Tune Hotels Davao City 155 Oct 2013 General Santos, Mindanao Microtel General Santos City 66 Dec 2012 Thunderbird Hotel General Santos City 130 2013
Disclaimer: The information contained in this newsletter is for general information purposes only. While we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the information, products, services, or related graphics contained on the 7107 INSIDER newsletter for any purpose.
ISSUE 3 2012
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Market Updates: What’s In and Hot! Department of Tourism (DOT) has developed new accreditation guidelines (Memo Circular 2012-02) to improve the overall quality of tourist accommodations in the country. The newly issued “National Accommodations Standards” adopts a “five star grading system”, based on points rating the inventory, availability, condition and quality of a specific facility, as well as its service.
HOT
PAGCOR’s Entertainment City, an estimated $20B project located on 100 hectare reclaimed land in Paranaque City, is being developed as an integrated complex with commercial and financial centers, residential, shopping, casinos, hotels and resorts. The main stakeholders are SM Investments Corp., Bloombury Holdings, Inc., Alliance Global Group (with Malaysia’s Genting) and Japan’s Tiger Resorts Leisure and Entertainment Inc.
HOT
Solaire Manila will be the first integrated resort to be built by Bloomberry Resorts. Set to open in 2013, it is one of the first four resorts to open in PAGCOR’s Entertainment City. Las Vegas-based Global Gaming Asset Management will oversee the operations of the resort’s casino division. Philippine construction activity recovers after the Aquino government confirms infrastructure spending, with tourism as direct beneficiary with airports and roads as part of the budget. It forecasts 6.5% growth in 2012 while an average 7.5% per annum between 2013 and 2016. Megaworld Corporation brings the concept of “integrated complex to Cebu with “Mactan Newtown”, a 16.2 hectare prime property in Lapu-Lapu City. The Mactan township will have residential condominiums, cyberpark, BPO offices, boutique hotels, retail and entertainment centers. Aussie airline Wild Orchid will begin charter flights from Darwin to Cebu beginning Dec 15, 2012 and will operate for 20 Saturdays until Dec. 13, 2013. 2732 Australians visited Central Visayas in the first six months of 2012, a 40 percent increase compared to the same period in 2011. The Darwin-Cebu route will use a Boeing 737 and serviced by Qantas crew.
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7107 INSIDER ISSUE 3 2012
HOT
Red Planet Hotels will open 20 more properties in Southeast Asia including six more hotels scheduled to open in the Philippines. Brand Tune Hotels entered the country this year with the opening of Tune Hotels in Angeles City, Malate, Cebu and Makati. It offers low-cost, business friendly quality hotels.
HOT
The Public-Private Partnership (PPP) of the Aquino administration’s budget was increased to PhP691.4 million for 2013—a 260% increase from the budget in 2012. The PPP involves the private sector for significant infrastructure developments in the country which includes tourism projects such as airports, roads and other infrastructure. WorldHotels, a hotel consortium of independent hotels, partners with H20 Ventures to build the US$50 million WorldHotel and Residences Makati, a 252 guest rooms and 149 serviced apartments. H2O Ventures, is also planning to invest US$200 million to build five uniquely themed hotels in Metro Manila. SM Hotels and Conventions Corporation is set to open two convention centers in key cities by 2013 to accommodate the growth of MICE industry. The new convention centers will be located in Davao and Taguig. SM partners with Park Inn hotel, the very first hotel by Radisson in the Asia-Pacific region, to build the 204 room Davao hotel adjacent to its convention center. The hotel will be located within the 175,000 square meters of mixed-use complex owned and developed by SM shopping mall subsidiary, SM Prime Holdings, Inc. Movenpick’s US$350 million worth of hotels and resort complexes projects are lined up. First is the Movenpick Residences Cebu, a mixed residential and hotel complex developed by Oikonomos International Resources Corp., Another hotel and resort complex will be built in Huma Island Palawan, two will be located in Makati, and another on a resort destination. Metro Manila is among the top 5 cities with largest number of rooms in the total active pipeline with 6,438 rooms. Other top 5 markets are Shanghai (12,721), New Delhi (11,856) Bali (8671) and Jakarta (7121), STR Global reports, August 2012.
HOT list recognizes people and companies with visionary leadership, innovation, and exemplary developments that has enhanced and advanced the Philippine tourism and property industry.
About TAJARA T A J A R A Leisure and Hospitality Group is a leading hospitality consulting and development c o m p a n y specializing in hotel, leisure and tourism developments in the Philippines. Its indepth knowledge and experience in mainstream and emerging destinations guide owners and investors in making informed decisions, including local intelligence to facilitate the project’s development process. TAJARA works with investment firms, property developers including greenfield companies, leading designers and local/ international hotel operators to develop hotels, leisure and mixed use residential properties, working on the project’s full development cycle from acquisition, technical services, project marketing, hotel operator selection, pre-opening set-up and owner’s representation. TAJARA works with major institutions in the Philippines including clients from Hong Kong, Singapore, Korea, China and Thailand. Cyndy Tan Jarabata, has a diverse experience in the hospitality and leisure industry being involved in hotel and resort development, general management, marketing and asset management.
For hotel development and hospitality consulting, contact us: Cyndy Tan-Jarabata, President cj@tajaraleisure.com Tyrone Tan, Project Director tyrone@tajaraleisure.com Tel : +632 9000552 Fax : +632 9003407 www.tajaraleisure.com