BE Grand Resort is one of the most superb posh accommodations in Bohol. It’s a sanctuary from the stress of urban living, and designed with the luxurious traveler in mind. The property hugs the coastline of Panglao Island, giving visitors sublime views of Bohol Sea.
From just attracting the local Boholanos and Cebuanos when it opened in 2016, it soon became a favorite playground of Korean and Chinese tourists.
Its well-appointed 189 rooms and 19 villas, a design collaboration of architect Paulo G. Alcazaren and artist Luis G. Nakpil, take inspiration from the cool calm waters of Bohol and the lush greenery around, thus giving guests the most restful stay. Its villas, meanwhile, suggest lavish romantic interludes in-room, or quiet fun in the swimming pool that meanders around the property.
Its main pool is a joy, especially for families; water features fascinate the children as parents kick back sandals to lounge under the sun, or snack on some of the more delectable finger food and chilled drinks the resort’s kitchen staff have whipped up for the day.
Conde Nast Johansens, a leading reference guide for luxury resorts, spas and venues around the world, has consistently included Be Grand Resort in its Asia’s best list. “We love…the romantic lounge Lune where you can enjoy panoramic views of the sea,” the guide said in its 2019 listing of awarded properties.
These days, however, a noticeable hush has descended on the property, with mostly locals there on brief holidays.
From optimism to pragmatic realism
Grand Benedicto, the eldest among five third-generation siblings who grew up playing in the lumberyard and furniture factory of his family, well-known in Cebu for their enterprises, has been known to take risks in forging new businesses. It was he and his siblings who decided to branch out into the hospitality industry, starting with BE Resorts Mactan in 2008, then BE Grand Resort Bohol.
The coronavirus disease 2019 (Covid-19) outbreak has wreaked havoc on the resorts’ main markets, now dampening Benedicto’s enthusiasm.
“We had our best years coming in. January 2020 was one of the best too; the first quarter is always strong,” Benedicto told the BusinessMirror.
But “occupancy and revenue are certainly affected with China and Korea as the two biggest markets,” he said. At the Bohol property, occupancy fell from 90 percent to 30 percent, he said.
Fortunately, the Mactan property is doing a bit better, holding at a 50-percent occupancy rate, according to Benedicto.
“But the fear is, in the coming months. This might not yet be the worst,” he noted; a concern many in his industry have similarly expressed.
Decreasing arrivals
The Department of Tourism (DOT) has estimated tourism revenue losses amounting to P38.2 million from February to March.
In a news briefing on March 4, Tourism Secretary Bernadette Romulo-Puyat said arrivals in February, based on raw data from the Bureau of Immigration, showed a 41.4-percent decrease in foreign arrivals. January was somewhat bit better, with foreign arrivals growing by 9.8 percent.
The sharp turnaround has indeed caused a lot of anxiety to the DOT, which has targeted foreign visitor arrivals this year to hit 9.2 million and inbound tourism receipts at P661 billion.
Travel bans are currently in place on mainland China, where the virus hatched and quickly spread, as well as on its special administrative territories, Hong Kong and Macau.
At the same briefing, Tourism Congress of the Philippines (TCP) President Jose C. Clemente III said, “In the beginning, the cancellations we were getting were far and few between.”
“Western markets were still holding like the United States, North America and Europe,” Clemente. “But since Covid-19 is now prominent in the [US], in my personal experience [as president of Rajah Tours Philippines], we’re experiencing some cancellations and foregone business.”
He revealed, for instance, that his company had just received a notice of cancellation from a 33-person group from Stanford University who was supposed to arrive this week. The cost of the tour package was P2 million, a sizable amount that his agency now has to refund.
He added, while government has already lifted its ban on travelers from South Korea, “there is also a dip [in arrivals from that market] now.”
“They are voluntarily not traveling even if they’re not from Daegu [the region where Covid-19 cases were confirmed],” Clemente said. “They are embarrassed to travel and be possible carriers.”
Hotels streamline operations, cut jobs
The hotel sector is, of course, the hardest hit among tourism stakeholders.
Hotel Sales and Marketing Association (HSMA) President Christine Ann U. Ibarreta said her 120 members have reported some P14 million in losses from lower guest arrivals “for two weeks alone.”
This means for the first quarter of the year, losses have reached at least P84 million for HSMA members in Metro Manila and provinces like Davao, Boracay, Cebu and Bohol. Multiply that with the rest of the DOT-accredited hotels all over the country and the losses easily turn into billions of pesos.
So, the main goal these days is to cut on expenses, according to Ibarreta. Unfortunately, this means, however, letting go of staff or asking their employees to take forced leaves, or implementing shorter work weeks—anywhere from once a week to three days a week.
“In Metro Manila alone, I have even 5-star hotels along the Bay Area that, because of their losses, of course they want to cut down on costs,” Ibarreta said. “So they had to let go of staff.”
These range from 100 employees to 200 employees per hotel who are now out of work. Assuming just 50 hotels for said area, from two-star to five-star hotels, hotel staff that are now jobless run anywhere from 5,000 to 10,000.
Ibarreta said many of the first to go were those from housekeeping.
“For example, out of an average 150 housekeeping staff, 20 have remained. These are the regular employees,” she added.
In many hotels, the housekeeping staff are usually contractual employees supplied by a manpower agency. The same is true for the engineering department, Ibarreta noted. Many have been let go as well since not all rooms need repairs every day and they are mostly contractual employees too.
For the staff who remain employed, however, a number of them are asked to go on forced leaves, anywhere from 15 days to 30 days, and most often without pay.
“Only the five-star hotels can afford to pay for forced leaves,” Ibarreta said.
‘No one is spared’
According to Benedicto, they haven’t resorted to shorter work weeks for BE Grand Resort Bohol employees just yet.
“We’ve put in place measures [to respond to the] decrease in occupancy. Payroll is one; we’ve cut agency-supplied staff,” he said. “So there is less number of people to pay.”
The contractual staff accounts for a third of the resort’s total employees.
“The organic staff are still on their regular work schedules,” Benedicto added. “And I hope it stays that way. We still have to maintain an operating hotel.”
But the resort has shut down some of its hotel floors “to save on power and water.”
Clemente emphasized during last Wednesday’s news conference that Covid-19 “has not spared any of us in the industry, whether you’re a small company or one of the bigger tour operators or hotels. In fact, not to exaggerate, we’re bleeding already.
“Some companies have temporarily closed down, especially those that are serving the China market because it’s like a faucet you shut off. So a lot of them have opted to temporarily close down and they are still making the decision whether to totally give up or reopen as soon as the situation gets better,” Clemente said. “Of course, pahabaan yan ng pisi [it depends on how long your rope is, or] how far you can go.”
“We’re doing our best to survive,” he emphasized. “We’re pulling out all our stops in pampering our client, give them a good experience, and make repeat visits to the Philippines.”
Not all is bleak, though.
“There are still tourists coming in; many of them are enjoying the fact that it’s a bit quiet now. And I spoke to someone in El Nido [Resorts] last week, and their guests right now are predominantly European, higher-end markets,” Clemente said. “So they’re okay.”
Tour-guiding remains viable, for now
Fortunately, tour guides seem to be insulated from the Covid-19 crisis. For now.
Erlyn Alunan, who takes groups around the gorgeous heritage sights of Iloilo and on pilgrimages to its popular home-grown restaurants and food stalls, said “local guides are not that affected.”
“We still have tour groups coming from the different parts of the country,” Alunan said. “We still get guiding assignments because families, friends and local groups still do domestic tours. Not in their usual big groups but in groups of three to five, or five to 10 people.”
“We also would get local government units for their Lakbay-Aral [study tour] and schools for their educational trips,” she added.
But Alunan disclosed that the situation is different for their province’s travel agencies and tour operators.
“Just yesterday [March 9], during the MICE [meetings, incentives, conferences and exhibitions] meeting, they said they have a lot of cancellations and they don’t even have walk-in clients anymore.”
Already anticipating the lower influx of tourists from abroad, the DOT, in collaboration with tourism stakeholders groups like TCP, HSMA, the Philippine Hotel Owners Association and the Philippine Tour Operators Association, have started pushing a domestic marketing campaign to get more Filipinos to travel around the country.
“In just a few days, the summer season will start. How many beaches have you not visited in the Philippines? How many provinces remain on your bucket list? Even President Duterte will be going around several tourist destinations starting this month,” Romulo Puyat said in a news briefing last week about the DOT’s mitigation efforts for Covid-19.
Getting locals to travel more
The DOT chief said Duterte’s first stop will be in Boracay Island on March 12, to be followed by Cebu and Bohol. The three destinations have been the hardest hit by Covid-19, with tourism establishments receiving significantly poor guest arrivals.
Romulo Puyat told reporters that hotels and resorts in Boracay have recorded a 40-percent drop in occupancy while those in Cebu reported a 27-percent dip. Bohol hotels and resorts have seen a 40-percent decrease in occupancy.
According to DOT data, there were 138,737 foreign tourists in Boracay alone in the months of January and February. This represents a substantial 36-percent decrease in arrivals in the same period last year of 216,756. Domestic travelers, however, saw a 6.3-percent increase to 117,359 arrivals in the first two months of the year, compared to 110,406 arrivals in the same period in 2019.
The so-called “crown jewel” of Philippine tourism, the white beach in Boracay was recognized just this month as among the Best Beaches in Asia by TripAdvisor and ranked at the eighth best. The Yapak Beach or Puka Shell Beach was ranked No. 20 in Asia.
Still recovering from the island’s 6-month closure, stakeholders on Boracay are the most sensitive to the impact of Covid-19.
Barely making it in Boracay
In a public Facebook post, restaurateur Nowie Potenciano who with spouse Odette owns and runs the popular Sunny Side Cafe, Spicebird, Supermagic and Coco Mama made a fervent appeal to consider vacationing on Boracay.
“Less than two years after we were shut down, Covid-19 is presenting another tough challenge to all the businesses and workers on the island. Not only are there virtually no Koreans and Chinese [who make up almost 60 percent of tourists] anymore, but even visitors from other countries…have dramatically dropped because of the virus. Travelers are avoiding Hong Kong, Seoul and Tokyo, which are hubs to getting to Manila.
“The effect has been devastating to everyone on the island,” continued Potenciano. “We’ve been hearing stories of 4-percent and 15-percent occupancy, [staff asked] to come back to half-day duties or being given a schedule for only a week. The desperation is palpable down to the vendors and boatmen who are virtually begging for business among the handful of tourists left.”
Potenciano said even they have had to close one restaurant, “because we can’t support overheads anymore. Another shop has seen its sales drop by almost 80 percent.”
“Thankfully, we’ve been able to re-assign staff to the remaining restaurants and everyone is still employed,” he said. “But if we have to close one more shop, it’s going to be…difficult.”
He enjoined the public to visit Boracay.
“The beach is absolutely beautiful and is the most empty I’ve ever seen it in almost 20 years of coming to the island,” adding that there were “ridiculously great deals to be had for both airline fares and hotels. Some nice hotels are now going for as low as P3,000 a night.”
Potenciano also emphasized there were zero cases of Covid-19 infections on the island.
Resorts drop room rates, airlines slash airfares
Indeed, many hotels in Boracay have joined the domestic marketing campaign of the DOT, slashing their room rates as much as 50-percent off their published rates, according to TCP’s Clemente.
He said about 40 properties around the country have officially joined the DOT-TCP program, with more expected to participate. The Philippine Tour Operators Association, meanwhile, has packaged tours for interested travelers.
Clemente said even carriers such as Cebu Pacific Air, Air Asia Philippines and Philippine Airlines, have joined the domestic marketing push by offering seat sales, with discounts as high as 80 percent.
But even Clemente acknowledges there are some tourism establishments that are “hard-headed” and disinclined to cooperate with the DOT’s domestic marketing campaign.
“A number of them continue to impose surcharges even during Holy Week,” he intimated. “Maybe they can survive this [Covid-19],” he said, wryly.
At the luxurious BE Grand Resort, Benedicto has, likewise, dropped the establishment’s rates, beginning February, and to last until May.
“Summer comes early, with our P6,500 net per room per night in our resort,” he said. These are the deluxe rooms, “and we are offering it even lower on the second night at 40-percent [less].”
In normal times, he noted, these rooms would have gone for P10,000 each per night.
Benedicto added the resort is also throwing in a 20-percent discount on dining at its Bridge and The Monkeybar outlets, specifically targeted at Boholanos.
Despite the lower room rate and airfares, Clemente admits, the domestic market will hardly make up for the losses in the inbound tourists.
“Of course it will not, because we have lower prices, that’s why we had to do the domestic packages,” he said. “But the objective now is to survive until the situation gets better.”
Containing the pandemic
On March 4, DOT’s Romulo Puyat convened the Tourism Coordinating Council (TCC) in an emergency meeting to discuss what measures were in place to mitigate the economic impact of Covid-19 on the tourism sector.
The TCC serves as a coordinating body for national tourism development efforts. Its members include the secretaries of other regular line agencies, like the Departments of Transportation, Public Works and Highways, Foreign Affairs, Environment and Natural Resources, Interior and Local Government, Labor and Employment and Education. The members also include the heads of the Philippine National Police (PNP), attached agencies of the DOT, the Bureau of Immigration, National Historical Institute, National Commission for Culture and the Arts, and the Philippine Amusement and Gaming Corp.
Environment Secretary Roy A. Cimatu and Labor chief Silvestre Bello III attended the said meeting.
“We are happy to note that our government is all out in ensuring that the threat of this looming pandemic is contained, at least in the Philippines,” the tourism chief said. “From our end, the DOT has identified and is working on strategic approaches to arrest the negative effects caused about by this global health scare.”
Romulo Puyat emphasized that “the DOT’s new direction is to boost domestic tourism now that inbound arrivals have expectedly decreased and with several temporary travel bans in place.”
She added the health department’s “current data would show that traveling around the country remains safe.”
Aside from the domestic marketing push, the DOT announced the allocation of some P6 billion in funds “that will span international and domestic promotions, infrastructure, and regional tourism development,” she said. This includes P421 million to develop a new campaign for domestic travel, and P467 million “to create engaging content that will resonate with our emerging countries unaffected by Covid-19.”
Romulo Puyat added, the DOTr, through the Civil Aviation Authority of the Philippines, and the Civil Aeronautics Board, “have assured us that strict protocols are in place particularly in cleanliness of the airports and in close coordination as well in the sanitation of the airplanes.
Also, the DOLE pledged to provide emergency employment and provide livelihood assistance to the affected tourism work force in partnership with the Technical Education and Skills Development Authority. (See, “DOLE eyes P2 billion for virus-displaced labor,” in the BusinessMirror, March 5, 2020.)
Stakeholders appeal for tax breaks
During the meeting, the TCP also submitted a “wish-list” of government measures to support the financial viability of tourism enterprises.
Among these are:
- Waiving of airport terminal fees;
- Discounted landing and parking fees for airlines “to keep their costs low and pass on savings to consumers;”
- Temporary waiving of visa fees for countries that still need to pay them when their residents head to the Philippines;
- Temporary deferment of applicable taxes on designated stakeholders for a predetermined period of time;
- Low-interest loans or credit facilities which can be tapped by stakeholders in a “precarious position,” subject to their eligibility; among others.
For businessmen like Benedicto, any sort of tax breaks government can extend would be really helpful.
“We need tax incentives during this period. [Otherwise] I don’t think the industry can recover this year.”
For now, Holy Week is “looking good” for the resort. The friendlier rates seem to have done the trick, and those Kenneth Cobonpue-designed lounging chairs by the beach will be filled with couples and families watching the sun dip into the horizon again.
Benedicto added that the resort’s marketing strategy “is more targeted to locals,” but they are still continuing to promote the resorts in Mactan and Bohol abroad, even though he knows this may not result in immediate bookings.
Similarly, the DOT believes in continuing the promotions of the Philippines abroad.
“In spite of the Covid-19 outbreak, we need to keep the Philippines top of mind in our key markets,” Romulo Puyat said.
“So when they finally make the decision to take their vacations, they will still choose us,” she added.
Image credits: Photo courtesy BE Grand Resort, Stella Arnaldo