Thursday, December 06, 2007 SM to invest P1B more to make hotel near Cebu mall operational
AFTER completing its expansion project for SM City Cebu, the real estate development arm of the SM Group is now bent on completing its first hotel venture in Cebu next year and has earmarked P1.5 billion for the interior works and finishing works.
Hans Sy, president of SM Prime Holdings Inc. (SMPHI), said the company’s total capital investment for Sofitel Hotel is estimated at P2.5 billion, where an additional P1.5 billion will be allotted for interior works and finishing touches and not for repairs as relayed by past controversies.
Sy belied rumors about the hotel’s construction, saying the construction was stopped not because of structural defects but due to the huge slump of the Philippine economy relative during the Asian financial crisis in 1997 and the severe acute respiratory syndrome (Sars) disease that hit Asia.
“The market went down. It’s plainly economics. It is practical to discontinue at that time rather than finishing and losing money,” he said in an interview with reporters following the soft opening Friday of the SM Northwing annex.
Expired contract
Sy said SMPHI had previously invested P1 billion in the late 1900s for the construction of what used to be known as the Sheraton Hotel, a 400-room facility located right beside the SM City Cebu mall.
As earlier reported, SMPHI had a contract with Sheraton Hotel but eventually expired, prompting the company to start negotiating with other interested parties to run and manage the hotel.
Sy said the SM Group chose Accor of the Sofitel chain as they made a favorable offer and “an attractive proposal.”
“Sofitel caters more to the Filipinos. They offered us a more advantageous contract after Sheraton. We also saw how successful they are with the Philippine Plaza,” he said.
Sy said the Kanko Kikako Sekkeisha Yozo Shibata and Associates of Japan was contracted to do the hotel’s interior works and finishing touches beginning January next year.
Full operation
He said the hotel is targeted for full operations by December 2008.
Information gathered from the Internet state that Sofitel is a luxury French hotel chain operated by Accor, a large French multinational company actively engaged in the hotel and restaurant business.
The hotel brand is famous in key cities around the world and has recently undergone developments in their branches in China, Australia, Syria, United Arab Emirates, Egypt and Luxemburg.
Sofitel has 200 hotels in 55 countries worldwide in France, Europe, United States, Asia Pacific, Africa, and the Middle East.
In the Philippines, Accor operates the Sofitel Philippine Plaza Manila with 609 rooms, spa amenities, among others. (MMM)
