INSIDER

7107THE PHILIPPINE GUIDE FOR , PROPERTY, AND TOURISM DEVELOPMENTS ISSUE 2 2011

Watch list on tourism and property markets Urgent! Brand Low cost Tune and Go Hotels are pioneering s the world markets buckle due to looming threat of another recession, the ‘no frills’ concept and expanding Athe country’s flag carrier Philippine Airlines (PAL) is paralyzed by extensively in mainstream and emerging a wildcat strike that grounded both domestic and international flights, cities. Both companies are related to low cost carriers AirAsia and , affecting thousands of its passengers. Though operations are going back respectively. LCC passengers will have to normal, PAL’s brand as the national carrier is seriously damaged. a similar experience on these low cost hotels with cheap rates on early bookings and ‘pay as you need’ amenities. The Philippines market emerges as Asia’s largest low-cost carrier battleground, with further growth in 2011 and beyond. Philippine carriers Century Properties hires style icon transported 16.6 million domestic passengers in 2010 and double-digit Paris Hilton to design for Azure traffic growth is expected with the entrance of leading Asian low-cost Beachclub, then signs a partnership with Donald Trump to build Trump Tower airlines AirAsia and Tiger. Domestic market is predominantly strong with a . The skyscraper will comprise over ‘go-go’ attitude among the locals while foreign arrivals have also increased 220 residential units located at the flagship to 12%, compared to same period of Jan-August last year. This has boost mixed-use development of Century City in Makati (formerly International School). hotel investments especially in the budget and midscale sectors, filling the So what’s next with Century on celebrity gap as travellers seek better hotels rather than ‘mom and pop’ operated brands? inns. Property developers are investing in creating their own local brands or partnering with international operators to develop chain hotels in city Branded residential developments are finally finding their way into centres and emerging destinations. Philippines real estate portfolio. The success of Fairmont Hotel - Raffles There’s a new tourism chief on the block! Replacing Alberto Lim who Suites and Residences, has set the stage for Grand at Bonifacio Global City has been on the post for only a year, Ramon Jimenez Jr. assumes the role and Marco Polo Residences in Cebu. of one of the most watched government positions. Formerly a marketing Opportunities are seen in main cities and and advertising executive, one of his key tasks is to consolidate a winning resort destinations. campaign strategy that strongly positions the country as a destination More local developers are building and preferred site for tourism investment. Brand Philippines has gone own brands and chain hotels creating through many alterations depending on who’s seated as tourism head. their own management company or Unlike ‘Amazing Thailand’, ‘Incredible India’ or ‘Malaysia Truly Asia,’ the partnering with local or foreign operators just in the case of Kukun of Ayala Hotels, Philippines has traverse the most campaign with ‘WOW Philippines’, ‘Bring Park Inn by Radisson of SM Hotels and Home A Friend’, ‘Fiesta Islands’, junked ‘Pilipinas Kay Ganda’, just to name Aston International of Indonesia in a few. partnership with Filinvest Group.

The success of Resorts World Manila We are in desperate need of rebranding the Philippines that will is benchmarked as the right model for genuinely define us uniquely as a country, draw in tourists including integrated resorts in the Philippines. With tourism investments, and can stand the test of the next Tourism Chief. the upcoming development of Pagcor Entertainment City along Manila Bay, it has spurted other similar developments in Cyndy Tan- Jarabata Subic and Boracay.

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

Foreign Arrivals Volume in the The busiest airports Philippines by Country of Residence in the Philippines in 2010, according to passenger movement, includes major urban centers and tourism destinations.

1. Ninoy Aquino International Airport (Manila) 2. Mactan-Cebu International Airport 3. Davao International Airport 4. Iloilo International Airport 5. de Oro (Lumbia) Airport 6. New -Silay Airport 7. Kalibo International Airport 8. Airport 9. Airport 10. Zamboanga International Airport

Consistently at the top 5 positions are the international gateways and regional centers of Manila, Cebu, Davao, Iloilo and Cagayan de Oro. The Top Ten Visitors to the Philippines next 5 busiest airports are Caticlan (Boracay), Tagbilaran (Bohol), Clark by Country of Residence International, General Santos and Legazpi. January- August 1. Korea 615,218  2. U.S.A. 429,280  2011 3. Japan 253,529  4. China 151,042  January - August 5. Taiwan 120,572  2011 Statistics 6. Australia 106,091  7. Singapore 89,220  8. Canada 76,612  • Foreign tourist arrivals posted 9. Hongkong 75,861  2.6 million, an increased by 10. United Kingdom 69,295  11.72% during the first 8 months compared to the same period last year.

January- August 1. Korea 474,395 • 46% of the foreign arrivals 2. U.S.A. 407,613 are East Asians with 615,218 2010 3. Japan 240,528 Korean visitors (about 2,531 4. China 133,216 Koreans arrive daily) 5. Hongkong 95,293 6. Australia 88,737 • South Asians lead the highest 7. Taiwan 77,759 growth rate of 48.37% compared to other regions 8. Singapore 66,854 with India posting a 55 9. Canada 98,548 percent growth. 10. United Kingdom 64,484 • Hongkong fell four notches down from the top 10 tourist Total Tourist Arrival Total Tourist Arrival arrivals due to the Manila January-August 2011 January-August 2010 hostage crisis. 2,603,675 2,330,584

Source of data: Department of Tourism (www.tourism.gov.ph) 2 7107 INSIDER ISSUE 2 2011 Hotel Updates

Hotels in the Pipeline

HOTEL NAME LOCATION ROOMS PROJECTED OPENING Acacia Grove Hotel Filinvest Corporate City, Alabang 262 October 2011 Crimson Hotel Filinvest Corporate City, Alabang 345 Mid-2012 Raffles Hotel and Residences Makati City 267 units March 2012 Fairmont Hotel Makati City 256 March 2012 Tune Hotels Makati City 213 April 2012 and Suites Ayala Center, Makati City 347 April 2013 Citadines Apart’hotel Makati City 215 2014 Tune Hotels Ermita, Manila 167 March 2012 Solaire Manila Entertainment City, Parañaque 500 2012 Belle Grande Manila Bay Complex Entertainment City, Parañaque 800 2013 Remington Hotel Resorts World Manila, Pasay 712 November 2011 Hamilton Hotel Resorts World Manila, Pasay 540 2012 Belmont Hotel Resorts World Manila, Pasay 400 2013 Hotel Mall of Asia, Pasay City 250 2014 Tune Hotels , City 250 December 2012 Hotel Ortigas Center, Pasig City 150 2013 Marco Polo Ortigas Ortigas Center, Pasig City 313 Q2 2014 Hotel Araneta Center, Quezon City 401 2013 Microtel Acropolis Libis, Quezon City 88 Mid-2012 Microtel UP Technohub Diliman, Quezon City 120 Q4 2012 Premier F1 City Hotel Bonifacio Global City, Taguig 240 2011 Kukun Hotel Bonifacio Global City, Taguig 180 July 2012 Fete Manila Bonifacio Global City, Taguig 193 2013 Ascott Bonifacio Global City ,Taguig 220 2014 Shangri-La Hotel Bonifacio Global City, Taguig 500 2014 Grand Hyatt Bonifacio Global City, Taguig 400 2014

Cagayan Valley Northstar Hotel Isabela, Cagayan 120 2012

Pampanga, Central Luzon Tune Hotels Angeles City, Pampanga 162 February 2012

Palawan Huma Island Resort Busuanga 85 2011 Go Hotels Puerto Princesa City, Palawan 108 2012 Princesa Island Resort & Spa Puerto Princesa City, Palawan 83 2012

Iloilo, Western Visayas Richmonde Hotel 90 2013

Metro Cebu, Central Visayas Quest Hotel & Conference Center Cebu City 427 December 2011 Tune Hotels Cebu City 160 February 2012

Bohol, Central Visayas Astoria Bohol Baclayon, Bohol 100 2011 Bellevue Bohol Panglao, Bohol 159 May 2012 BE Resort Bohol Panglao, Bohol 200 Q4 2012

Leyte, Eastern Visayas Oriental Palo 74 December 2011 Go Hotels- Tacloban Tacloban City 98 February 2012

Cagayan de Oro, Northern N Hotel Cagayan de Oro City 68 April 2012 Tune Hotels Cagayan de Oro City 162 October 2012 Kukun Hotel Cagayan de Oro City 150 January 2013

Davao, Southern Mindanao Kukun Hotel 186 December 2012 Tune Hotels Davao City 147 February 2013 Park Inn by Radisson Davao City 200 2013

General Santos, Mindanao Microtel General Santos City 66 Mid 2012

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 newsletter for any purpose. 7107 INSIDER ISSUE 2 2011 3 Market Updates: What’s In and Hot!

China’s economy hotel Jin Jiang Belle Group to build hotels before casinos Construction of the hotel is expected to start Inn expands in the Philippines The consortium of Belle Corp and Leisure this year and is scheduled to open by 2013. With plans to build a minimum of 30 hotels Resorts World are forging plans to build 6 hotel The 200-room hotel will be located within the over the next 15 years in partnership with towers with 800 keys to open late 2013. Of the 175,000-square-meter mixed-use complex snack maker company Oishi, who has recently 6 towers, one will be an all-suites hotel targeted where a supermall and convention center will set up a hotel investment and management toward the VIP market and junket gaming be built. Radisson is also managing SM Hotels’ company in Manila. This deal is the first Chinese customers, another will be a 4 or 5 star hotel upscale hotel in Cebu. hotel enterprise that has exported their brand while the remaining 4 towers as condotels. The overseas. casino will be operated by Asia Pacific Gaming, San Miguel Properties aggressively building a Macau based casino operator. presence in Caticlan, Boracay AirAsia to expand fleet in 3 years The real estate development arm of diversified AirAsia Philippines projects construction of 8 to CamSur as Country’s conglomerate San Miguel Corp., is planning 10 aircraft fleet in the next 3 years. Promising Top Tourist Destination HOT to develop a budget hotel, condotel and food to further challenge its competitors on regional Department of Tourism (DOT) show that outlet in Caticlan and Boracay. It owns a 28 and domestic routes as it flies out from Clark, Camarines Sur appeared to have overtaken hectare property in Boracay, a premiere tourist 90 minutes’ drive north of Metro Manila, to Boracay and other favorite tourist destinations destination. minimise costs and avoid Manila’s crowded in the country among local and foreign tourists. terminals. Commercial operations will start A total of 2,330,116 foreign and local visitors Megaworld to develop old 54-hectares in October after the completion of final flight in 2010 have been recorded, posting a 48.75 airport in Iloilo into a mixed-use complex certification from the government. More percent growth in the number of visitors Megaworld is spending an initial P2.5 billion international and domestic routes will be added compared to previous year. Formerly number over a 2-year period to develop the old airport’s as the fleet is expected to expand with additional one, Boracay placed fourth with 779,666 arrivals, road network, its own brand Richmonde Hotel Airbus A320s by June 2012. Expansion of a mere 4.13 percent growth. Iloilo and Richmonde Tower, as well as two operations is in line as well as placing strategic more office buildings catering to business hubs in Cebu and Zamboanga, with an all brand To REIT or not to REIT process outsource (BPO) industry. This will new 20-aircraft fleet envisioned within the next The Asia Pacific Real Estate Association (APREA) be the third hotel under the Richmonde brand 5 years. is concerned over Philippine government’s with other hotels located in Ortigas Center and failure to understand the benefits of real estate Eastwood. Tiger Airways Launches investment trusts (REIT) on the economy and Clark-Macau Route what it takes to create a successful REIT market. Bellevue Bohol opens in 2012 A third route has been added to the “Partner The securities regulator has set public ownership Local hotel group Bellevue Group of Hotels will Airline” program of Tiger Airways and South of REIT at 40% plus 12% VAT applied on initial open their 3rd property in Bohol in May 2012. The East Asian Airlines since May 2011, as SEAIR transfer of property assets in REITs. Property 159-room resort is on a 3.5 hectare beachfront operates daily flights from Clark to Macau, giants have expressed interest in setting up REITs and will be one of the biggest developments in its third international destination, along with but wanted the public ownership requirements the province. Bellevue started in 2003 in Alabang, Singapore and Hong Kong. In the “Partner brought down to 33%. SM Prime Holdings has followed by their business hotel brand B. Airline” programme, Tiger Airways does the dropped its plans to launch its REIT. marketing of the seats online while SEAIR caters the flights Airbuses leased from Tiger Airways. SM Hotels in partnership with Carlson HOT list recognizes people and The program was launched in Nov 2010. A SM Hotels and Conventions Corp. had signed companies with visionary leadership, 32.5% equity stake in SEAIR is envisioned by with Carlson, for the opening of a Park Inn innovation, and exemplary President & Group CEO Tony Davis of Tiger by Radisson Hotel in Davao. The hotel will be HOT developments that has enhanced and advanced the Philippine tourism Airways. the first Park Inn by Radisson in Asia-Pacific. and property industry.

TAJARA Profile

AJARA Leisure and Hospitality Group is a leading hospitality consulting and development Tcompany specializing in hotel, leisure and tourism developments in the Philippines. Its in-depth 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.

For hotel development and hospitality TAJARA works with investment firms, property consulting, contact us at: developers including greenfield companies, leading designers and local/international hotel operators to develop hotels, leisure and mixed use residential Cyndy Tan Jarabata properties, working on the project’s full development President cycle from acquisition, technical services, project [email protected] marketing, hotel operator selection, pre-opening set-up Tyrone Tan and owner’s representation. TAJARA works with major Project Director institutions in the Philippines including clients from [email protected] Hong Kong, Singapore, Korea, China and Thailand. Tel : +632 9000552 Cyndy Tan Jarabata, has a diverse experience in the hospitality and leisure industry being Fax : +632 9003407 involved in hotel and resort development, general management, marketing and asset www.tajaraleisure.com management.

4 7107 INSIDER ISSUE 2 2011