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Ayala subsidiary to launch new brand of ‘affordable’ hotels

Posted on April 17, 2013 11:16:12 PM [ BusinessWorld Online ]
AYALALAND Hotels and Resorts Corp., the hotel development arm of listed Ayala Land, Inc. plans to launch within the year a new brand of “affordable” hotels that target businessmen on the go, a top company official told reporters yesterday.
  Sites for initial projects are Muntinlupa and Bacolod cities.
“We are conceptualizing a new product offering catering to the $60-per-night market. We plan to start with the development in the old Nestlé development in South Park (District in Muntinlupa City) and possibly in Bacolod and in Iloilo (cities),” Jose Emmanuel H. Jalandoni, AyalaLand Hotels and Resorts president, said in a briefing yesterday following Ayala Land’s annual stockholders’ meeting at Fairmont Makati.
“We would like to make our hotels more affordable, targeting business travelers who can afford only P2,000-3,000 per night.” Mr. Jalandoni said, noting that Ayala Land’s other homegrown boutique hotel brand, Seda, charges around $120 or P5,000 per night.
“We hope to ground-break the affordable brand by the third or fourth quarter of this year, and in a year’s time, we will be up and running,” he added.
GROWING
AyalaLand Hotels and Resorts, incorporated in 2010, is a wholly owned Ayala Land unit that serves as a holding company for the latter’s hotels and resorts operations.
Ayala Land’s hotel and resorts portfolio currently totals 1,467 rooms: 192 rooms in El Nido, Palawan (Lagen, Milinoc, Apulit and Pangulasian Island Resorts); 312 rooms in Fairmont Makati; 179 rooms in Seda Bonifacio Global City (BGC); 150 rooms in Seda Cagayan de Oro; 634 rooms in Hotel InterContinental and Cebu City Marriott.
By end-2013, this complement is expected to grow to 2,114 rooms with the opening of Holiday Inn & Suites Makati and two more Seda hotels in NUVALI, Laguna and Davao.
To further enhance its resorts, Ayala Land is open to adding residential developments in El Nido.
“It could be a combination: leisure homes or retirement homes,” Bernard Vincent O. Dy, Ayala Land executive vice-president, said in the same briefing.
“It will be very balanced. If ever there will be a conflict, it will be in favor of nature,” assured Antonino T. Aquino, Ayala Land president and chief executive officer.
At the same time, AyalaLand Hotels and Resorts will also tap the affluent market by introducing a high-end version of Seda.
“We’re also going upscale. We’ll be developing a Seda Suites product in BGC to add to the current Seda boutique development there. It will have bigger rooms, easily around 40 square meters in… size,” Mr. Jalandoni said.
In a separate development, Ayala Land said it has sold off its entire stake of 60% in its office leasing subsidiary Asian i-Office Properties, Inc. to affiliate Cebu Property Ventures and Development Corp. (CPVDC), citing the need to further consolidate its Cebu-based office portfolio and thereby improve operations.
Asian i-Office Properties, incorporated in 2008, is an Ayala Land-owned vehicle in charge of the management and operation of two business process outsourcing (BPO) buildings in Asiatown IT Park in Cebu, namely:
eBloc and Peak Building A, according to the same annual report.
CPVDC, meanwhile, sells lots at Asiatown IT Park and is 76.3%-owned by listed Cebu Holdings, Inc., a 47%-owned affiliate of Ayala Land incorporated in 1988 to manage and operate Ayala Center Cebu and sell lots within the Cebu Business Park in Cebu province.
“This transaction will allow the company (Ayala Land) to consolidate into CPVDC the development and operations of BPO offices in Cebu and businesses related thereto, which should lead to value enhancement, improved efficiencies, streamlined processes, and synergy creation among the company and its subsidiaries. This is also consistent with the thrust of the Cebu Holdings group to build up its recurring income base,” Ayala Land said in a disclosure yesterday.
CONSOLIDATING
Ayala Land has recently been consolidating ownership of its office subsidiaries.
On Monday, Ayala Land bought a 32% stake in office space affiliate ALI Property Partners Co. (APPCo) for P3.52 billion, fully acquiring APPCo in a bid to beef up its leasing portfolio and boost recurring income.
Ayala Land was organized in 1988 when its parent, conglomerate Ayala Corp., decided to spin off its real estate division into an independent subsidiary to enhance management focus on real estate.
Ayala Land grew its net income by 27.69% to a record P10.33 billion last year from P8.09 billion in 2011, driven by strong sales of its residential business. In the same comparative periods, revenues -- consisting of real estate sales, interest and investment income, equity in net earnings of associates, and other income -- increased by 23.32% to P54.52 billion from P44.21 billion, while costs and expenses rose 23.28% to P41.30 billion from P33.50 billion.
Ayala Land has earmarked P65.5 billion for capital expenditures this year -- P46 billion for project completion and roughly P20 billion for land banking -- partly to bankroll 69 projects worth a total of P129 billion.
Ayala Land shares lost 10 centavos or 0.33% to P30.35 each yesterday. -- F. J. G. de la Fuente
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