Hotel chain reports decrease in revenue

CEBU, Philippines - Gatchalian-controlled Waterfront Philippines Inc. (WPI) and subsidiaries reported a slight decrease of its total revenue in 2008, as compared to the previous year from P1.96 billion in 2007, to P1.95 in 2008.

“[The year] 2008 has been one of the most challenging years in our industry, as it has been for every other player in the tourism and hospitality area. The global economic crunch came rather unexpectedly and it has brought with it the obvious implications for international travel, tourist spending and leisure spending in general,” said WPI chairman Renato B. Magadia.

Hotel operations generated a revenue of P1.85 billion, with rooms contributing 36 percent or P700.66 million, with F&B (food and beverage) putting in a share of 32 percent or P627.40 million.

Revenue per available rooms rose to P1,444 from the previous year’s P1,423, reflecting an increase of 1.45 percent.

Waterfront Cebu City Hotel and Casino accounts for 37 percent of total revenues while Manila Pavillon Hotel brought in a close 35 percent share.

Waterfront Airport Casino and Hotel in Mactan Island generated 13 percent of revenues. While Waterfront Insular Hotel Davao contributed seven percent and G Hotel provided three percent contribution to the company’s overall revenue.

Based on the 2008 annual report of the publicly-listed WPI, consolidated room revenues stood at P700.66 million. Average occupancy rate was at 59 percent with group average room rate at P2,400 in 2008 reflecting a revenue per available room of P1,444.

The F&B business of the company continue to be a source of its considerable revenue contributor.

WPI’s F&B revenues generated P627.54 million, making up 32 percent of hotel-gross revenue. 

“Midyear, we braced ourselves for tough times as we watched travel and tourism data take the unfavorable plunge, and the possibility of a global recession loomed over our heads,” Magadia said in his chairman’s report.

He said the company’s outlook in 2008 went from optimistic to conservative. “Lesser tourist arrivals in the country meant lesser revenue. Worsening conditions in the global airline industry also meant that there was no guarantee of a steady stream of flights to assure us of an international clientele. Indeed, difficult times were at hand.”

Because of the crisis, Magadia said there was also a drop in business travel and leisure spending, as companies cut down on their travel expenses and as affluent travelers tended to hold off on luxury spending

“We have felt the repercussions not just in our main operations but also in our individual subsidiaries and service outlets,” he said.

However, he stressed that the company is far from being overcome by undue fears brought about by the widespread uncertainty and continuing talk of the crisis.

“The most important things you can have in a crisis are resolve and resilience: the will to weather the storm, and the ability to adapt and innovate. I believe this is what has kept Waterfront hotels formidable no matter the odds,” he said.

With new projections expecting the global economy to bounce back by 2010, Magadia said the company is encouraged by the prospect of better days.

“We continue to strive and innovate, and take advantage of the hidden opportunities that may emerge from the crisis. Perhaps it is well that we’ve been through tough times, so that we might revisit our strengths and keep moving on with the invaluable knowledge we’ve gained,” he said.

WPI’s subsidiaries include Waterfront Citigym & Wellness, Inc., Waterfront Food Concepts, Waterfront Management Corporation, Waterfront Entertainment Corporation, Mayo Bonanza Inc., and Waterfront Promotion LTD.