SM eyes 3rd hotel project in PH-A A +A
By Mia A. Aznar
Tuesday, October 15, 2013
ENCOURAGED by the performance of its two hotels in the Philippines, the American-based Carlson Rezidor Hotel Group signed a hotel management agreement with SM Hotels and Convention Corp. for a third hotel project in the country.
After the Radisson Blu Hotel in Cebu and Park Inn by Radisson in Davao, the two groups agreed to open a 150-room Park Inn at Clark in Pampanga, slated to open in 2016. The hotel will be adjacent to an existing SM City Clark within the Clark Freeport Zone.
SM Hotels and Convention Corp. president Elizabeth Sy said they are enforcing the business model of having a mall, convention center and hotel near each other and that this latest agreement is one of those suitable properties for such a mix. The Park Inn at Davao is in proximity to an SM mall and convention center.
Asked if a similar project could work for Cebu, Sy admitted there are plans for a similar project. Cebu, she said, could use more convention space and that having a hotel near a mall and convention center would attract more companies to hold events here.
Simon Barlow, president of the Carlson Rezidor group for Asia Pacific, added that the Park Inn’s concept matches the fun and youthful image of SM malls and that they are both targeting the same demographic–the domestic Philippine market. The company describes the Park Inn as a “friendly, fresh, vibrant and uncomplicated” brand.
With 35 million domestic travelers recorded in 2012 nationwide, Barlow said they want to be able to offer the Park Inn brand in different destinations of the country, similar to what they have planned for in India and Indonesia.
The two groups also agreed to a new development plan, with SM identifying five new sites for the Park Inn franchise. Sy said they are pursuing five more locations on top of those already identified. Initially, they mentioned the Mall of Asia, SM North Edsa and Iloilo as among the prime locations.
Although Cebu was not on the list, Sy said the mall being built at the South Road Properties is patterned after Mall of Asia, which currently has a convention center and has plans for a hotel. “So, be open for a surprise there,” she told Sun.Star Cebu.
She and Barlow noted that such developments are built first before the market realizes they are needed. Sy said that after the Mall of Asia Arena was built, it was only then that very current and top musical artists were arriving in Manila to hold concerts there.
‘A little push’
Barlow added that it is often the case for emerging markets that it is not immediately known that there is a demand until the development has been put in place.
Sy believes Cebu has a market for more convention space and that all that is needed is “a little push” in the right direction for development to move.
Aside from signing the agreement, Barlow was in Cebu along with several general managers and top hotel officials under the Carlson group from all over the Asia Pacific for their annual conference.
The Radisson Blu Hotel Cebu was chosen to host this year’s conference as the Philippines is one of the countries the Carlson group is targeting in its growth strategy for Asia. He added that the hotel has been recognized by Trip Advisor and is, overall, “a great venue.”
The choice to hold the conference in the Philippines was also a nod to the country’s well-performing economy.
Both see the upcoming Asean integration as good for business, saying tourism will benefit from it and that there will be great opportunities for affordable and value hotels such as theirs.
As for the threat of the US heading for default, Sy said they at the SM group have not foreseen any effects it may have for their businesses. She believes that the reports of how Asia could experience difficulties should the US head for a default are “overblown.”
“We’ll just keep doing what we’re doing,” she said.
For his part, Barlow is skeptical it would reach such a point. “I think they are going to figure it out.”
However, if the US government does fail to raise the debt ceiling and head for a default, he doesn’t see any specific ramifications that could affect their plans.
Published in the Sun.Star Cebu newspaper on October 16, 2013.