ALI-KHI hotel proj to get tax perks

Ayala Land Inc. (ALI) and Dubai-based Kingdom Hotel Investments (KHI) will be entitled to tax perks from the government for their multi-billion hotel in Makati after the project was deemed in line with the Medium Term Development Plan (MTDP) for tourism.

KHI, a leading international hotel and resort investment company founded and chaired by Saudi Prince Alwaleed bin Talal bin Abdulaziz Alsaud, is teaming up with ALI for the P7.65-billion five star hotel/apparel project.

The Board of Investments (BOI), which granted the fiscal incentive, package, said the luxury hotel complex will help promote tourism in the country.

The tourism industry and related projects such as hotels continue to be among the top foreign exchange generators contributing to the growth of the Philippine economy.

In most developed countries, the serviced-apartment concept for operations and management of accommodations is becoming increasingly common.

The ALI-KHI joint venture project aims to break a new ground towards the introduction and broadening of the serviced-apartment concept in the tourist accommodation business in the country.

The project will provide employment to about 1,728 people during construction and 1,119 during commercial operations.

The project will begin construction early next year and is estimated to be completed within three years.

The ALI-KHI project has been billed as the single biggest hotel-related investment in local business history.

The partners will develop a 7,377-square meter property at the corner of Makati Ave. and Arnaiz Ave. into a luxury hotel complex consisting of a 300-room Fairmont Hotel, a 30-suite Raffles Hotel and 189 Raffles-branded private residences.

The land is currently occupied by Park Square 2, Ansons Department Store and a bus terminal. Park Square 2 will be demolished to give way to this re-development while a new parking building between Landmark and Shangri-La Hotel is expected to be operational by the fourth quarter of 2008.

A landholding company, KHI-ALI Manila Inc., will be established to own the property. ALI will own 60 percent while KHI, through a wholly-owned subsidiary, will hold 40 percent. Also, KHI-Manila Properties Inc., an operating company, will be established to manage the development, construction and operations of the hotels. ALI will own 20 percent in this other company while KHI, also through a subsidiary, will own the remaining 80 percent.

Prince Alwaleed owns hotel and resort properties throughout the world and has significant equity investments in leading international hotel management companies, namely Four Seasons Hotel and Resorts, Fairmont Hotels and Resorts, Raffles Hotels and Resorts and Movenpick Hotels and Resorts which manage hotels throughout the world.

Fairmont Hotel and Resorts is North America’s largest luxury hotel company, whose diverse portfolio includes historic icons, resorts, and modern city center properties. Raffles Hotel and Resorts, meanwhile, operates a collection of luxury hotels in key destinations around the globe, including Singapore, Beverly Hills, Beijing, Hamburg and Montreux, Switzerland.