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July 28, 2017

Dusit to manage five-star resort in the Philippines

Thai global hospitality company Dusit International has signed a hotel management agreement with Robinsons Land Corporation, one of the Philippines’ leading real estate companies, for the Dusit Thani Mactan Cebu.The five-star resort situated on the northern peninsula of Mactan island is slated to open in the fourth quarter of next year. Mactan is located a few kilometres from Cebu in the Central Visayas region and is known for its luxury tourism industry. The Dusit Thani Mactan Cebu will be the third property in the Philippines to carry the Dusit Thani brand besides the Dusit Thani Manila and the upcoming Dusit Thani Residence Davao.
(Source: The Nation, 21 July 2017)

From January to November of 2016, Cebu welcomed around 3.46 million domestic and foreign tourists, making it the most visited destination in the Philippines during the period. The 2016 figure is 12% higher YoY. The continued surge of tourists in the city has been encouraging developers to ramp up construction of hotels and resort-oriented condominium projects. With the increase in tourist arrivals, overall occupancy rate for 2016 improved to 68% from 65% in 2015. Robust occupancy rates of Deluxe and First Class hotels indicate the continued influx of high-spending tourists. The projected 15-20% growth in arrivals over the next 12 months should sustain hotel occupancy of between 65% and 70% across Cebu in 2017.We believe that Cebu’s tourism sector will become more robust once the PHP17.5-billion public-private partnership (PPP) project involving the construction of a new world-class passenger terminal building at Mactan-Cebu International Airport is completed. The new terminal will have a capacity of 12.5 million tourists per annum, almost triple the old facility’s original capacity of 4.5 million. Cebu serves as the jump-off point to other Visayas and Mindanao destinations, hence the need to expand its airport’s capacity.

Inflation eases to 3.1% in Q2

Inflation or the rate of upward adjustments in the prices of goods and services eased slightly in the second quarter of the year amid steady movement in the prices of food and non-food items, the Bangko Sentral ng Pilipinas (BSP) reported on Friday. Data released by the central bank showed that headline inflation during the quarter was slightly slower at 3.1 percent compared to 3.2 percent record in the first quarter. "Both food and non-food inflation during the review quarter remained generally steady vis-a-vis the previous quarter," BSP Director for Economic Research Zeno Abenoja said during a press briefing at the central bank headquarters in Manila. "Food inflation in second quarter held steady compared to the previous quarter as higher prices of selected food commodities, specifically meat and fish, were counterbalanced by lower prices of vegetables and fruit products," Abenoja added. Meanwhile, non-food inflation was also unchanged at 2.4 percent as downward adjustment in the prices of domestic petroleum products was offset by price increases in transport and education services. The second quarter inflation figure brought the year-to-date average to 3.1 percent. BSP Governor Nestor Espenilla Jr. said the year-to-date average is within the national government's announced target range of 3.0 percent +_ 1.0 percentage point fort the year. "The second quarter headline inflation edges closer to midpoint of the target range," Espenilla said.
(Source: GMA News Online, 21 July 2017)

The average inflation for the second quarter of the year is well within the central bank’s forecast of 2% to 4%. The continued growth of Filipino households’ purchasing power, fueled by Overseas Filipino Workers’(OFW) remittances and rising incomes from outsourcing jobs, practically raises the population’s propensity to consume. This encourages developers to build more malls in and outside of Metro Manila and cash in on the growing online shopping trend. Ayala, for instance, is opening 7 malls in Metro Manila this year while DoubleDragon intends to open at least a dozen CityMall outlets across the country by end-2017.  Colliers believes that the low inflation environment coupled with a 4% increase in OFW remittances this year should continue to lift consumer spending, which covers about 70% of the country’s economic output. Sustained OFW remittances and low inflation have a direct impact on retail, residential, and tourism spending in the country. 

DoubleDragon to bring Jinjiang Inn to Boracay

DoubleDragon Properties Corp. hopes to cash in on the growing number of tourist arrivals from China, as the real estate developer charts the expansion of its hotel business. DoubleDragon Chairman Edgar “Injap” Sia II told reporters last Friday it will start the development of two hotels under the Jinjiang Inn brand in Boracay and Cagayan de Oro in the next two months. The stand-alone hotel in Boracay will have more than 100 rooms and is located “near” the beachfront in Station 2. The expansion is part of DoubleDragon’s plan to assemble 5,000 hotel rooms, 2,000 rooms of which will be under Jinjiang Inn and another 3,000 rooms under Hotel 101 by 2020. Last year, Mr. Sia’s Injap Investments, Inc. divested its 70% stake in Hotel of Asia, Inc. and consolidated it at the DoubleDragon level. Chan C Bros Holdings, Inc. of the Oishi Group and Staniel Realty Development Corp. retained their 15% interest each in HOA. HOA currently has 866 operating hotel rooms from two Jinjiang Inns in Ortigas and Makati, Hotel 101 in the Manila Bay area, and Injap Tower Hotel in Iloilo City. HOA’s subsidiary holds the master franchise for Chinese hotel brand JinJiang Inn in the Philippines. Mr. Sia noted the strong tourist arrivals from China in May when visitor count surged 57.29% to 73,649 compared to the prior year. “We also felt that uptick. Hopefully, it will be good for our brand,” Mr. Sia said.
(Source: Business World, 24 July 2017)

In 2016, more than 1.7 million local and foreign tourists visited Boracay Island, up 11% from 2015 figure. The popularity of Boracay Island is enticing developers to build more hotels. DoubleDragon is cashing in on the growing number of Chinese tourists that flock to Boracay Island and is building  Jinjiang hotels.  The Jinjiang brand is popular among Chinese tourists and business executives given its brand recall and convenient booking platform. China has become a major source of tourists following the lifting of travel advisory versus the Philippines. Since October 2016, the Philippine embassy in China reported a 200% surge in visa applications among Chinese tourists and businessmen. From January to May 2017, arrivals from China rose by 36% YoY.  Over the medium term, we see the completion of more affordable hotels across the country given the projected rise in arrivals from the Philippines’ major markets such as South Korea, United States, Japan, and China.



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