A businessman's take on the economy (Business Mirror (Philippines))

EXCITING things are also happening in the hotel industry, driven not only by the growing tourism industry but also by the growing reputation of the Philippines as a global shopping haven, fueled, in turn, by the explosive growth of the retail business.

For a long, long while, the hotel industry had been in the doldrums. Tycoons were saying that there’s no money in hotels, so few investors were putting money into the construction of hotels.

Now, the tycoons are expanding in hotels, and are even coming up with their own brands. Examples are the Seda hotel brand of the Ayalas, the Crimson and Quest hotels of Filinvest, the Go Hotels and Summit of Robinsons Land Corp. (RLC) and Megaworld’s Richmonde and Belmont.

More global brands are coming to the Philippines, which should help attract more tourists to the country.

George Ty’s Federal Land is scheduled to open this year the Grand Hyatt Hotel at Bonifacio Global City. It is said to be the first six-star hotel to be opened in the Philippines in 20 years, and the tallest, with 66 stories housing 450 rooms.

Shangri-La, which opened the Shangri-La Resort and Spa in Boracay in 2009, is now completing a 61-story hotel at The Fort, which will have 675 rooms, plus a residential component.

Andrew Tan’s Alliance Global Group Inc. is pursuing an aggressive development plan to become the largest hotel developer in the country with a total of 20,000 rooms in its portfolio by 2020. According to the company, the hotel portfolio will consist of 12 different local and global brands, including Marriott, Hilton, Sheraton, Westin, Okura and Maxims.

As of August 2014, the group’s hotel portfolio totaled 1,900 rooms: Richmonde Hotel Ortigas, Eastwood Richmonde Hotel, Marriott Hotel, Maxims Hotel and Remington Hotel in Newport City, and Fairways and Bluewater in Boracay Newcoast.

Ayala Land Inc. is also pursuing an expansion plan aimed at having 4,000 hotel rooms in its portfolio by the end of 2015. The company’s portfolio includes Seda hotels in Quezon City, Arca South in Taguig City, Nuvali in Laguna and Circuit in Makati, Davao, Cagayan de Oro and Bonifacio Global City. In 2012 Ayala Land opened the Holiday Inn, The Raffles and Fairmont in Makati.

For its part, John Gokongwei’s RLC plans to open two to three hotels every year under its own brands, Go Hotels and Summit. In the fourth quarter of 2014 RLC opened the 198-room Go Hotel in Ortigas Center, the 82-room Summit Hotel at the Robinsons Magnolia shopping center in Quezon City and the 104-room Go Hotel in Butuan, its first branch in Mindanao. RLC, which currently has more than 2,000 hotel rooms, also operates the Crowne Plaza Galleria Manila and the Holiday Inn Galleria Manila.

Leading mall developer Henry Sy has also become a major player in the hotel industry. In 2013 SM Hotels and Conventions Corp. (SMHCC) already had four hotels in its portfolio, including the Park Inn by Radisson Davao, Radisson Blu in Cebu, Taal Vista Hotel in Tagaytay and Pico Sands at Hamilo’s Pico de Loro Resort in Nasugbu, Batangas. SMHCC has also signed a management agreement with Hilton Worldwide for the latter to manage the 347-room Conrad Manila hotel at the Mall of Asia Complex, which is scheduled to open in mid-2015.

The lifting of the European ban on Philippine carriers in June will have a positive impact on tourism, including the hotel industry, because it will make the Philippines more accessible to tourists from European countries.

In a joint announcement on June 26, the Civil Aviation Authority of the Philippines and the European

Commission said all airlines certified in the Philippines have been allowed to mount flights to Europe.

The latest announcement benefits Air Asia Inc., Air Asia Zest, Air Philippines Corp., Island Aviation Inc., Magnum Air (Skyjet Inc.), Southeast Asian Airlines (Tiger Airways) and Southeast Asian Airlines International Inc. Philippine Airlines was allowed to fly to Europe in 2013, followed by Cebu Pacific in 2014.

Data from the Department of Tourism show that foreign tourist arrivals totaled 2.23 million from January to May this year, an increase of 8.15 percent from 2.06 million for the same period in 2014. During the first five months of 2015, tourists spent P93.91 billion, up 2.74 percent from P91.4 billion in the same period last year.

Tourism continues to increase its contribution to the economy. According to the Philippine Statistics Authority (PSA), tourism cuts across different sectors of the economy. The tourism direct gross value added (TDGVA) serves as the indicator to measure the value added of different industries in relation to tourism activities of both inbound and domestic visitors in the country.

As measured by the TDGVA, the contribution of tourism to the economy was estimated at 7.8 percent in 2014. The TDGVA amounted to P982.4 billion in 2014, higher by 14.0 percent compared to the previous year’s P861.7 billion.