INSIDER

7107THE PHILIPPINE GUIDE FOR HOTEL, PROPERTY, AND TOURISM DEVELOPMENTS

ISSUE 3 2012

Watch list on tourism New Wave and property markets

Resort developments of local investors Metro is expecting 55% increase of hotel room supply from seen rising outside . Alphaland 16,486 available rooms to 25,654 between 2012 – 2016. Another 4,099 is making massive developments in Balesin, rooms are expected to open outside Metro Manila to accommodate Quezon while and Megaworld’s tourism complex rises in the staggering tourism growth and puts the hospitality and tourism Boracay, Aklan. Ayala Land operates 4 resorts industry as investment vanguards. The Aquino government forecasts in El Nido while top emerging destinations 10 million foreign tourists and 35.5 million domestic travellers by 2016, are San Vicente, Puerto Princesa, Coron and earning tourist receipts of P1.99 trillion and estimates to generate Bohol. 7 million jobs. An ambitious target given our worsening air traffic congestion at the airport, strained - China relations, lack of New international hotel brands are bullish to operate in Manila, led by the opening of basic roads and airport infrastructure in key and emerging destinations. Fairmount Raffles, Grand Hyatt, Movenpick and Park Inn. Global operators with previous The tourism slogan ‘It’s more fun in the Philippines’ has stimulated presence like Sheraton, Mercure and Novotel Filipinos to take part in the campaign and communicate iconic features are also returning as hotel investors want that represent not only the wonders of its 7,107 islands but also its branded hotels to prevail as market gets culture and way of life. The slogan has definitely caught up even more competitive. on the investment level. A new genre of hotel investors are building Air connectivity to increase within hospitality projects led by key real estate groups as well as independent Philippine islands boosting tourist markets owners developing their own hotel chain. and allow foreign carriers to mount unlimited flights to secondary gateways such as Cebu, Increasing connectivity by air, land and sea has heightened travelling Davao, Iloilo and Clark. among the domestic market. Low cost and foreign carriers also Integrated resorts and gaming projects launched flights in secondary gateways to enable both local and as key drivers of tourism revenue growth. foreign visitors direct access to more destinations. Limited service With Macau as the world’s largest casino hotels and upscale resort destinations are preferred models among market and Singapore’s recent success, hotel investors, as most want healthy cash flow, investment returns, stakeholders of the Pagcor property appreciation and building hotel portfolios. need to develop a consolidated marketing strategy to compete and attract the gaming market. The new campaign does make developers put money where their mouth is, believing that ‘it’s more fun to invest in the Philippines.” Premier 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, Cyndy Tan- Jarabata emerging business district ‘The Fort’ in City is a prime choice for hotel developments.

THE 7,107 INSIDER IS THE LEADING SOURCE OF TOURISM, HOSPITALITY AND PROPERTY INFORMATION IN THE PHILIPPINES. Tourism Indicators

Foreign Arrivals Volume in the In Focus: Philippines by Country of Residence 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.

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 Top 5 Visitor Arrivals Top 5 Independent’s “Life’s a Tag: 2012 Most January-August 2012 Emerging Markets Surprising Holiday Destination”, where it as of August 2012 was listed as one of the best islands to visit.

1. South Korea 23.76% ▲ 1. Russia 40.35% Boracay named World’s Best Island 2. United States 15.63% ▲ 2. Taiwan 29.11% Getaway by Travel + Leisure Magazine’s 3. Japan 9.78% ▲ 3. China 19.09% 2012 World’s Best Awards placing Bali 4. China 6.29% ▲ 4. France 13.96% at number 2. Boracay placed 4th in the 5. Taiwan 5.45% ▲ 5. Germany 10.64% same awards last year. Discovery Shores in Boracay was also named best hotel spa.

Total Tourist Arrivals Total Tourist Arrivals Global-Estate Resorts Inc. (GERI), January- August 2012 January- August 2011 affiliate of Alliance Global Group will 2.85 million ▲ 9.78% 2.6 million develop Boracay Newcoast as its first fully master-planned tourist hub covering TARGET: 4.6 million 140 hectares and one km. white sand beachfront, an estimated 14 percent of Tourist Arrivals 2012 the island’s total area. Five hotels are 3.9 million Tourist Arrivals in 2011 planned to be built, an additional 1,500 hotel suites to Boracay’s room inventory. Overseas Filipinos contributed 5% to the total tourist traffic. Sources of data: Department of Tourism (www.tourism.gov.ph) San Miguel Corporation (SMC) will develop the Boracay Airport Complex, Scarborough Affair deemed to be the country’s biggest hotel and coliseum located in Caticlan The Philippines and China’s dispute over the Scarborough shoal has not and Nabas, Aklan. This US$300 million halted Chinese tourist arrivals as it remains fourth largest source of visitors. airport complex will have a 5,000 room A Chinese tourist stays an average of three days and spends $100-200 a day. About budget hotel and a convention center to 15 to 20 percent of these expected tourist arrivals are headed to the island of seat up to 25,000 persons. Boracay.

Bilateral relations between the Philippines and China is foreseen to come back on 700,000 foreign tourists visited the right track as tension eases however both countries still claims sovereignity Boracay in the first half of the over the disputed shoal. 2012, 41 percent rise over the same period in 2011. 2 7107 INSIDER ISSUE 3 2012 Hotels in the Pipeline

Metro Manila Crimson Hotel Corporate City, 345 Nov 2012 Raffles Hotel and Residences , 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 , 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, Parañaque 500 Mar 2013 Belle Grande Complex Entertainment City, Parañaque 800 2014 Tune Hotels, Mall of Asia , Parañaque 204 June 2014 Sheraton Hotel 350 2016 Marriott Manila (expansion) , 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 , 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, 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 , 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, 60 Q1 2013 Kukun Hotel Nuvali, Sta. Rosa, Laguna 150 Dec 2013

Pampanga, Central 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 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 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 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 3 newsletter for any purpose. 7107 INSIDER ISSUE 3 2012 Market Updates: What’s In and Hot!

Department of Tourism will (DOT) has developed new HOT open 20 more properties HOT About TAJARA accreditation guidelines in Southeast Asia including (Memo Circular 2012-02) to improve the six more hotels scheduled to open in the TAJARA overall quality of tourist accommodations Philippines. Brand Tune Hotels entered the Leisure and in the country. The newly issued “National country this year with the opening of Tune Hospitality Accommodations Standards” adopts a “five Hotels in Angeles City, Malate, Cebu and Group is star grading system”, based on points rating Makati. It offers low-cost, business friendly a leading the inventory, availability, condition and quality hotels. hospitality quality of a specific facility, as well as its consulting and service. development The Public-Private Partnership (PPP) of company PAGCOR’s Entertainment the Aquino administration’s budget was specializing in City, an estimated $20B HOT increased to PhP691.4 million for 2013—a hotel, leisure project located on 100 260% increase from the budget in 2012. The and tourism hectare reclaimed land in Paranaque City, PPP involves the private sector for significant developments in the Philippines. Its in- is being developed as an integrated complex infrastructure developments in the country depth knowledge and experience in with commercial and financial centers, which includes tourism projects such as mainstream and emerging destinations residential, shopping, casinos, hotels and airports, roads and other infrastructure. guide owners and investors in making resorts. The main stakeholders are SM informed decisions, including local Investments Corp., Bloombury Holdings, WorldHotels, a hotel consortium of intelligence to facilitate the project’s Inc., Alliance Global Group (with Malaysia’s independent hotels, partners with H20 development process. Genting) and Japan’s Tiger Resorts Leisure Ventures to build the US$50 million and Entertainment Inc. WorldHotel and Residences Makati, a 252 TAJARA works with investment firms, guest rooms and 149 serviced apartments. property developers including greenfield Solaire Manila will be the first integrated H2O Ventures, is also planning to invest companies, leading designers and local/ resort to be built by Resorts. US$200 million to build five uniquely international hotel operators to develop Set to open in 2013, it is one of the first four themed hotels in Metro Manila. hotels, leisure and mixed use residential resorts to open in PAGCOR’s Entertainment properties, working on the project’s full City. Las Vegas-based Global Gaming Asset SM Hotels and Conventions Corporation is development cycle from acquisition, Management will oversee the operations of set to open two convention centers in key technical services, project marketing, the resort’s casino division. cities by 2013 to accommodate the growth hotel operator selection, pre-opening of MICE industry. The new convention set-up and owner’s representation. Philippine construction activity recovers centers will be located in Davao and Taguig. TAJARA works with major institutions after the Aquino government confirms SM partners with Park Inn hotel, the very in the Philippines including clients from infrastructure spending, with tourism as first hotel by Radisson in the Asia-Pacific Hong Kong, Singapore, Korea, China and direct beneficiary with airports and roads as region, to build the 204 room Davao hotel . part of the budget. It forecasts 6.5% growth adjacent to its convention center. The hotel in 2012 while an average 7.5% per annum will be located within the 175,000 square Cyndy Tan Jarabata, has a diverse between 2013 and 2016. meters of mixed-use complex owned and experience in the hospitality and developed by SM subsidiary, leisure industry being involved in brings the SM Prime Holdings, Inc. hotel and resort development, general concept of “integrated complex to Cebu management, marketing and asset with “Mactan Newtown”, a 16.2 hectare Movenpick’s US$350 million worth of management. prime property in Lapu-Lapu City. The hotels and resort complexes projects are Mactan township will have residential lined up. First is the Movenpick Residences condominiums, cyberpark, BPO offices, Cebu, a mixed residential and hotel complex For hotel development boutique hotels, retail and entertainment developed by Oikonomos International and hospitality centers. Resources Corp., Another hotel and resort consulting, contact us: complex will be built in Huma Island Aussie airline Wild Orchid will begin charter Palawan, two will be located in Makati, and flights from Darwin to Cebu beginning Dec another on a resort destination. Cyndy Tan-Jarabata, President 15, 2012 and will operate for 20 Saturdays [email protected] until Dec. 13, 2013. 2732 Australians visited Metro Manila is among the top 5 cities Central Visayas in the first six months of with largest number of rooms in the total Tyrone Tan, Project Director 2012, a 40 percent increase compared to active pipeline with 6,438 rooms. Other top [email protected] the same period in 2011. The Darwin-Cebu 5 markets are Shanghai (12,721), New Delhi route will use a Boeing 737 and serviced by (11,856) Bali (8671) and (7121), STR Tel : +632 9000552 Qantas crew. Global reports, August 2012. Fax : +632 9003407

HOT list recognizes people and companies with visionary leadership, www.tajaraleisure.com HOT innovation, and exemplary developments that has enhanced and 4 7107 INSIDER ISSUE 3 2012 advanced the Philippine tourism and property industry.