Monday, February 5, 2018

SM hotel and conventions unit to invest in serviced apartments

THE robust domestic market continues to feed the properties of SM Hotels and Conventions Corp. (SMHCC), even as it develops its foreign travelers traffic.

In an e-mail interview with the BusinessMirror, SMHCC Executive Vice President Peggy Angeles said “the primary market for most of our properties is still the local market. But there has been a steady increase in bookings coming from  the United States, China, South Korea, Japan and Southeast Asia attributed to our continuous efforts in developing these markets.”

She added that strong growth in Chinese tourists in the Philippines has mainly benefited SMHCC’s leisure properties like Pico Sands Hotel in Nasugbu, Batangas and Taal Vista Hotel in Tagaytay City. “Taal Vista Hotel has recently been a popular stopover for Chinese tour groups for its lunch buffet cultural show.”

Last year Chinese arrivals grew by 43.3 percent to 968,447, helping lift total foreign visitor arrivals in the Philippines to 6.62 million. (See, “Arrivals up 11 percdnt in 2017 as China delivers on vow,” in the BusinessMirror, January 30, 2018.)

This developed as officials disclosed that the company will be investing P6.3 billion to expand its portfolio, doubling its current room inventory and increasing its leasable convention space by 2020. This includes branching out to the serviced apartment market.

In a news statement, SMHCC President Elizabeth Sy said the company “will be expanding in growth areas, which it deem can sustain the establishment of guestroom facilities. These include new hotels and a foray into the serviced-apartment market. These facilities will be located within the lifestyle cities being developed in key areas in the country by our parent company SM Prime Holdings Inc.”

She also said the addition of new SMX Convention Centers in key cities further cements SMHCC’s position as the country’s premier conventions and events destination.

Currently under way are six hotels in Quezon City, Iloilo, Angeles, Pasay, Bacolod and Baguio. These hotels have an average of 200 rooms each. In Quezon City, specifically, “the multi-tower North Edsa project is one of the current developments initiated by our parent company SM Prime Holdings Inc.  One tower is earmarked for a 239-room hotel, which is slated to be completed by the first quarter of 2019,” Angeles said.

She added the hotel will be operated by the Carlson Rezidor hospitality group under the Park Inn by Radisson brand. But she declined to reveal the brands for the company’s other hotels in development due to ongoing discussions with potential operators.

With the allotted investment, “SMHCC developments will generate thousands of jobs from the onset of the construction and close to a thousand when the properties operate, definitely helping the local community where the developments are located,” Angeles said.

As for the serviced apartments, she said “we’re looking at a few locations but nothing has been finalized. The operator has yet to be identified.”

According to a global industry report by TAS Alliance for 2016/2017, while serviced apartments in Asia have been increasing, reaching almost 80,000 units in 2016, it still pales in comparison to the Americas (500,000 units) and Europe (125,000). The report also indicated some 62 percent of business travelers use serviced apartments, followed by those on temporary projects or assignments overseas (49 percent), and those relocating permanently (35 percent).

Along with the hotel projects, the company is also “strengthening our foothold in the conventions sector with new additions to our current portfolios of convention and trade halls,” Angeles added.

A new SMX Convention Center is being constructed adjacent to the Park Inn by Radisson Clark in Angeles, Pampanga, with a leasable space of 3,800 square meters (sq m).  The facility will have six function rooms, complemented by 14 smaller meeting rooms.  Upon completion, SMX Convention Centers will have more than 41,800-sq-m leasable convention space across key cities—Manila, Bonifacio Global City in Taguig, Davao and Bacolod. SMHCC also operates Megatrade Hall in SM Megamall, Cebu Trade Hall in SM City Cebu, and Sky Hall Seaside Cebu.

Meanwhile, officials also revealed the company will be spending some P510 million to renovate its existing hotels, namely, Taal Vista Hotel, Radisson Blu in Cebu and Pico Sands Hotel. The renovation program is part of the company’s four-year development plan, and will be undertaken in phases—starting in April and scheduled for completion by January 2023.

Angeles said: “The renovation plans include the 129 rooms of Taal Vista Hotel’s Mountain Wing scheduled to commence in the second quarter of 2018 and is anticipated to be completed before the end of the year.  Also to be renovated are all 400 rooms of Radisson Blu Cebu phased over a couple of years, followed by Pico Sands hotel’s refurbishment in 2019.”

SMHCC was established in April 2008 to develop and manage the hotel and convention properties of SM Prime.  Shares of the parent firm closed P36.95 last Friday, slightly higher than Thursday’s close of P36.50.

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