THE SM Group is spending close to P15 billion in the next five years to build 14 new hotels in the country, under its partnership with the international hospitality firm Radisson Hotel Group (RHG).
SM Hotels & Conventions Corp. (SMHCC) Executive Vice President Peggy Angeles revealed the investment in a news briefing on Wednesday, following their signing of a Master Development Agreement with RHG for the Park Inn by Radisson brand. This would increase RHG’s portfolio in the Philippines to 20 by 2028 and generate 1,250 new jobs. “The first of these new properties,” she said, “will be the 516-room dual-branded property in Cebu City under the Radisson and Park Inn by Radisson brands, which is scheduled to open in 2027.”
The properties will be adjacent to the SMX Convention Centre and the soon-to-be completed SM Seaside Arena, as well as the SM Seaside City Cebu Mall, a 14-meter tall seaside tower, and a church. The first RHG hotel of SMHCC is Radisson Blu Cebu, which opened in 2010.
Untapped potential
The other new hotels will be located in Cauayan in Isabela, Olongapo City, Laoag, Fairview in Quezon City, Dasmariñas in Cavite, Sta. Rosa in Laguna, among others. “Our expansion is outside the NCR (National Capital Region) because we believe there is a need to provide good quality accommodations, affordable, which do not compromise on service excellence, and safety and security.” SMHCC’s hotels are set up adjacent to existing SM malls or retail areas.
RHG’s footprint in the Philippines remains small compared to other countries in Asia such as Thailand, Vietnam, Indonesia, and India, admitted Ramzy Fenianos, Asia-Pacific Chief Development Officer of the firm. “The Philippines has a huge untapped potential. Unfortunately, the Philippines isn’t the first choice for destinations [in Asia]; it’s usually Bali, Vietnam, then the Philippines, which is a shame because we love the country. It’s so diverse — [you have] mountains, the beach; it’s such a beautiful country, that’s why we think there is an opportunity for us.”
With the construction of the 14 new hotels, and perhaps more properties beyond 2028, he expressed confidence “the Philippines will soon become a very active market for us. We have invested as a company and opened a development office. We hope to come with more news at the end of the year.” The first Park Inn by Radisson opened in Davao City in March 2013, and was touted as the first of the brand in the Asia Pacific region.
Prepandemic profit this year
Angeles separately told the BusinessMirror that SMHCC will likely exceed its profit in 2019. “We’re projecting our yearend net income for 2023 will be approximately 30-percent higher than our pre-pandemic income,” she asserted, with the sharp rebound in domestic travel and return of the MICE (meetings, incentives, conventions, exhibitions) market. According to its parent firm, SM Prime Holdings Inc., the Commercial Properties and Hotel and Convention Centers business segment recorded an operating income of P4.9 billion in 2019.
With strong hotel occupancy, she noted, “Obviously [our revenue] is already 8-12 percent of our budget of P5 billion this year. Added revenue will come from the opening of Lanson Place in the next few months.”
SMHCC was established in 2008 and now has nine hotel properties with more than 2,200 rooms, and over 42,000 square meters of leasable convention space though the SMX Convention Centers and trade halls. Besides the partnership with RHG, SMHCC has a management contract with Hilton Hotels & Resorts for Conrad Manila, Lanson Place Hospitality Management for Lanson Place at the Mall of Asia, but manages its own properties such as Taal Vista Hotel and Pico Sands Hotel.
RHG has over 1,700 hotels in 120 countries under its brands Radisson Collection, Radisson Blu, Radisson, Radisson RED, Radisson Individuals, Park Plaza, Park Inn by Radisson, Country Inn & Suites by Radisson, and prizeotel.
