By Denise A. Valdez, Senior Reporter
HOTEL operators are gearing for their return to operating at full capacity, which analysts expect will prop up stock market activity for the tail end of the year.
In separate messages to BusinessWorld, Filinvest Hospitality Corp. and DoubleDragon Properties Corp. said they are welcoming the government’s easing of restrictions that now allow hotels to operate at 100% capacity under current quarantine protocols.
The Tourism department announced on Wednesday that it would relax the hotel safety guidelines, which used to limit hotel operations to a skeleton workforce.
“With the recent pronouncement of the Department of Tourism (DoT), the hotels of DoubleDragon will now be operating at 100% capacity with continued safety protocols implemented,” DoubleDragon Chairman and CEO Edgar “Injap” J. Sia II said via e-mail.
“We expect this to create revenue step-ups in the last quarter, and will not only positively benefit the hotel businesses but also our economy in general,” he added.
DoubleDragon operates hotel brands Hotel 101 and Jinjiang Inn, which contributed P269.73 million revenues to the group during the first six months of 2020. The contribution was down 8% from last year’s P291.64 million.
The company’s gross revenues, which include contributions from retail, office and industrial leasing, rose 50% to about P8.11 billion. Attributable net income grew more than double to P3.3 billion.
For Filinvest Hospitality, a wholly owned subsidiary of listed Filinvest Development Corp. (FDC), the development is seen to help efforts for economic restart under the “Ingat Angat” program of the government. The company operates hotel brands Crimson Hotels and Resorts, Quest Hotels, and Grafik.
“We look forward to welcoming our guests to our hotels. We assure the public that we continue to fully implement the strict health and safety protocols…, ensuring the well-being of our guests in all Quest and Crimson Hotels nationwide,” Francis Nathaniel C. Gotianun, senior vice-president of Filinvest Hospitality, said via e-mail.
Hospitality operations added P844.6 million to FDC’s revenues and other income in the first semester, lower by 49% from last year. The whole group posted total revenues and other income of P40.63 billion, with attributable net income up 24% to P7.2 billion.
Since the DoT announcement last week, the Philippine Stock Exchange had already started rebounding to its best performance since June. The main index grew 139.43 points or 2.19% to 6,484.06 on Friday, putting it up 585.59 points or 10% on a weekly basis.
“The market has been buoyant the past few days and reopening hotels will be taken as a further sign that we may have rounded the corner. What we will have [to] watch for now is if cases spike up anew,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message.
However, he warned any possible rise in fourth quarter revenues of hotel operators “will likely not be enough to put them in the black for this year.”
While the easing of restrictions may allow for more economic activity, the down side is the fear of risking a spike in coronavirus cases, Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said.
“I think that the next challenge for these industries is to convince the general public that ‘Hey, it is safe to travel and have a vacation.’ It’s more on a collaboration of the private sector and government,” he said in a text message.
Mr. Gotianun of Filinvest Hospitality shared the same sentiment: “While this measure is a step in the right direction, we believe that demand can be further stimulated by streamlining and standardizing travel and health requirements.”
Coronavirus cases in the Philippines stood at 367,819 as of Saturday, accounting for 2,057 newly reported cases.
Some of the other listed companies with exposure to hotel operations are Megaworld Corp.; Ayala Land, Inc.; SM Prime Holdings, Inc.; Robinsons Land Corp.; Bloomberry Resorts Corp.; and Cebu Landmasters, Inc. They were unable to respond for comment for this story as of deadline.