Travellers Int'l earnings up 57%

MANILA, Philippines - Travellers International Hotel Group, a joint venture between real estate tycoon Andrew Tan’s Alliance Global Group Inc. and Malaysia’s Genting Group, jacked up its net income by 57 percent last year to $112.9 million.

In a disclosure to the Hong Kong Stock Exchange, Genting Hong Kong Ltd. said unit Travellers Group registered revenues of $659.3 million, up 85.3 percent from $355.8 million in 2010.

Operating expenses, however, jumped 75 percent to $206.6 million from only $118.3 million as the Travellers Group increased its marketing and advertising efforts and hired more personnel to support the expansion in operations.

Finance costs shot up by more than eight-fold to $61 million from only $7.2 million in 2010. The sharp rise was attributed to additional bank borrowings, recognition of an interest rate swap liability of $26.9 million, and full-year interest charge on the $300 million seven-year bonds issued in October 2010 to finance capital and project expenditures and for general corporate purposes.

AGI’s equity in the net earnings of Travellers Group is seen to increase to 6.5 percent in fiscal year 2011 from 3.9 percent the year before.

CitisecOnline’s Gavin Lee said AGI is in a good position to capitalize on the expected surge in tourist arrivals to the country with the opening of budget hotel Remington Hotel and condotel Belmont.

Travellers Group owns Resorts World Manila, an integrated leisure and entertainment complex located in the 25-hectare Newport City in Pasay, featuring three hotels, including a six-star all-suite Maxims Hotel, an iconic shopping mall, four high-end cinemas and a multi-purpose performing arts theater.

Travellers Group is building a fifth hotel within the area, expected to be a five-star establishment hosting 350 rooms.

The new hotel, together with Marriott, Maxims, Remington and Belmont, will boost the group’s room inventory in the 10-hectare RWM to 2,800 by 2016 when tourist arrivals are expected to hit 6.5 million.

RWM, located near the domestic and international airports, opened in August 2009 and is currently the largest casino complex in the Philippines.

Tan, valued to be worth $2.1 billion by Forbes Magazine, is making a strong push into the gaming/tourism industry. His flagship firm AGI has interests in property (Megaworld Corp., Empire East Holdings and Suntrust), beverage (Emperador Distillers Inc.), and fastfood (Golden Arches Development Corp.)which holds the master franchise for global fastfood giant McDonalds.