Travellers Int’l income plunges 50% on higher expenses

MANILA, Philippines — Travellers International Hotel Group Inc., owner and operator of Resorts World Manila, saw net profit plunge in the first half behind higher expenses and financing costs.

Travellers reported a net income of P842.6 million in the first semester, 50.1 percent lower than the P1.69 billion in net income recorded in the same period last year.

Second quarter net income declined by 52 percent year-on-year to P599 million due to higher finance charges and increase in depreciation expense.

Direct costs, which are costs directly associated with gaming operations, grew by 37.5 percent to P7.1 billion for the six months ending June.

The increase was attributed to the increase in gaming license fees, higher casino operating expenses as a result of the ramp up of the Grand Wing, and higher hotel operating expenses as a result of the opening of the Hilton Manila Hotel and Sheraton Manila Hotel.

General and administrative expenses also soared by 40.5 percent year-on-year to P5.15 billion in the first half from a year ago due to the absence of the one-time recognition of the other income last year.

Travellers’ gross revenues in the first semester, however, jumped by nearly 50 percent to P16.57 billion from P11.05 billion for the same period last year, driven by improvement in volume in both the non-VIP and VIP segments as a result of the increase in gaming capacity as well as the 747 additional rooms from Hilton Manila Hotel and Sheraton Manila Hotel.

Gaming revenues grew by 50.3 percent year-on-year to P13.53 billion, while revenue from hotel, food, beverage and others increased by 51.8 percent to P2.31 billion.

Travellers said average occupancy rate for the five hotels which includes Marriott Hotel Manila, Maxims Hotel, Hilton Manila, Holiday Inn Express Manila Newport City and Sheraton Manila fell to 77 percent from 81 percent for the same period last year as a result of the additional 747 hotel rooms.

The company is eyeing complete its Grand Wing facility in the latter part of the year, which will include two  levels gaming, entertainment, and retail spaces.