Casino closure nearly wipes out Grand Plaza Hotel profit in H1

MANILA, Philippines - Grand Plaza Hotel Corp., the company behind Heritage Hotel Manila, barely eked out a profit in the first half amid strong competition and lower rental revenues.

In a regulatory filing, the hotel operator said as a result of lower revenue, net income slumped 96 percent to P2.9 million from P84.7 million a year ago.

“Total revenue sank 29 percent to P245.88 million from P349.43 million due to lower revenue in all segments especially in rental income,” Grand Plaza said.

In July 2013, Philippine Amusement and Gaming Corp. (Pagcor) closed its casino that previously occupied 4,745 square meters of the hotel with a monthly rental of P10.72 million.

“The management of the corporation is in the process of exploring various options on how to develop and utilize the area covered by the leased premises,” Grand Plaza earlier said.

Pagcor is winding down its operations south of Metro Manila as mega-casinos start operations in the Entertainment City, the country’s answer to gaming hubs in Macau and Singapore.

For the rooms division, occupancy dropped to 61.8 percent from 71.5 percent amid “lesser corporate business and airline crews in the hotel,” Grand Plaza said.

Average room rate has been reduced to P3,159 from P3,200. Hence, total room revenues eased 14.69 percent to P158.93 million from P186.3 million.