Spa chain expands via "build-to-sell" concept

By Ehda M. Dagooc (The Freeman) Updated June 08, 2009 12:00 AM

CEBU, Philippines - As the Spa and wellness industry in the country continues to post promising prospects, spa chain Body & Sole is embracing a unique expansion concept via build-to-sell (BTS) strategy.

Cebu-based Body & Sole brand, which is the largest spa chain in the country, recently created another subsidiary company to focus on its expansion plan called “Body & Sole Express Corporation,” this is to offer a different expansion model, which has been proved to be successful in other industries like the 7/11 chain of convenience stores.

In a press conference, Body & Sole president Johnie Lim said that unlike the typical franchise strategy, wherein dealings with the franchisee will take longer, the BTS concept on the other hand, will give an interested investor an “instant business” by buying an outlet of her choice.

Lim, together with a Manila-based partner, will start this concept at its new outlet located in Ortigas in Metro Manila that will be up for sale once the company will be able to set up and run it for a while and after a buyer can take over.

According to Lim, the company is planning to build about nine outlets all over the country, mostly in Metro Manila, and some parts of Luzon that will adopt the BTS model.

“This is for people who have the money and want to start a new business instantly or immediately without having to worry of the facility and outlet construction, and other hassles,” Lim said.

In the BTS concept, Body & Sole will have the outlet run commercially, and immediate take over of the business will be done, after the investor buys it.

Although, Body & Sole will continue its franchising business, Lim said the introduction of BTS will give investors another choice in operating a “branded” Spa outlet immediately.

Part of the contract, under the BTS model, is to retain the Body & Sole brand, and owner must uphold the service standard adopted by the chain including the pricing of its services, among others.

The company on the other hand, still gets a royalty fee from the buyer, Lim said.

Lim’s Body & Sole has now over 40 outlets nationwide. Majority of these branches are managed by franchisees.

A single outlet for instance, will be sold at least for P1 million (all-in), “in the following day, after the buyer pays, he can already run the business. That’s the beauty of this concept.”

The company on the other hand will not build an outlet that will cost over a million pesos, as this is targeted for the small entrepreneurs, while bigger ticket investors could opt to take the franchising scheme.

In franchising, he said while the franchisee pays the franchising fee, he still has to invest on construction of the outlet and other legal and documentary processes. The BTS on the other hand, business turn over is faster, Lim said.

Lim mentioned that this strategy will be adopted by the company outside of Cebu, as he described Cebu’s Spa industry as “saturated.”

He said there is no room for expansion in Cebu. But, there are a lot of promising areas around the Philippines for this kind of business.

He mentioned that OFWs (Overseas Filipino Workers) for instance, who want to get into business back home can immediately invest on the BTS model for less hassle and faster return of investments (ROI).

Filinvest Land partners with global hotel chain

By Ehda M. Dagooc (The Freeman) Updated May 28, 2009 12:00 AM

CEBU, Philippines – Filinvest Land Incorporated partners with international hotel chain Aston Hotels & Resorts for the management of its condotel and resort businesses in Cebu in the next few years.

If the deal will materialize, it will be the first hotel and resorts that will be managed by the international chain in the Philippines, said Filinvest vice president for Visayas and Mindanao operations Tristan Las Marias.

For over 60 years, Aston Hotels & Resorts has been a leading provider of hotels, condominium resorts, villas and cottages specifically in Hawaii, and other countries like Indonesia, Darlington, among others.

Filinvest will be opening its triple-A resort village by the end of this year, and targets to start its condotel operation of Grand Cenia Condominiums by first quarter of 2011.

In a press conference, Las Marias said that the company’s partnership with Aston Hotels and Resorts will solely be management deal, and that names of both properties the Grand Cenia and Seascapes will be retained.

Aside from its investments in residential projects in Cebu, the Gotianun-led real estate giant is spending P5.5 billion only for the two projects, the Grand Cenia Condotel and the Seascapes Resort village on Mactan Island.

The company has earmarked P4 billion for the development of high-end Seascapes, which will provide 280 casitas to add the resort accommodation facilities of Cebu, and exclusive residential or vacation homes.

Filinvest is spending P4 billion for the 12 –hectare ultra high-end resort town, of which exclusive residential lots, apart for the resort operations.

The Grand Cenia, on the other hand, a condotel located adjacent to the Cebu Business Park (CBP), is a 25-story condotel building that will be providing a total of 450 hotel rooms that will also be managed by the Aston Group.

Filinvest, is investing P1.5 billion on this condotel project which completion date is targeted by early 2011.

Excluding its investment put in its leisure group in Seascapes, Filinvest Land has already spent P5 billion in real estate developments in Cebu in the last three years. Combined, the company has put up close to P10 billion in investments in the last few years.

Currently, the company is also building an enclave of medium-rise-buildings (MRB) called One Oasis in Mabolo area, which provides a cluster of MRBs or nine to 10 five-story buildings within the 3.5 hectare development.

Aside from these new ventures, Filinvest is also expanding its existing subdivision projects in Metro Cebu, such as the 5-hectare expansion of Corona del Mar subdivision in Talisay, and the four-hectare additional house and lot offering of the Mactan Tropics subdivision.

Although the company was recently involved in the controversial deal with Cebu City government-developed South Property Road (SRP), Las Marias said Filinvest maintains its strong confidence of Cebu economy, fueled by the bullish tourism and real estate industries.

“We are not overly aggressive, but we are trying to position ourselves and we want to be there when the economy fully recovers,” he stressed.

Filinvest Development Corporation, is one of the largest developers in the Philippines, developed close to 2,000 hectares of land in the last four decades, shopping centers, it also engaged in different businesses like banking (East West Bank), and projects like shopping centers, central business districts, high-rise offices, and condominiums, recreational farms, leisure clubs, industrial estates and an information technology park.

Exporters shift to other marketing partners, strategies

By AJ de la Torre (The Freeman) Updated November 25, 2009 12:00 AM

CEBU, Philippines - The Philippine Exporters Confederation is eyeing on partnering with other countries outside Asia in order to grab a bigger market for the export industry.

During the Sector Export Marketing Plans presentation in Cebu recently where different industries showed their strategies in coping with the economic crunch and plans to intensify their efforts for their respective industries, Philexport chairman Paterno Dizon said that since the start of the crisis where the industry was greatly affected, they have tried to shift in marketing strategies.

Philexport is the umbrella organization of export companies in the country.

Dizon said that there were a lot of challenges for the industry but they knew that it was important to find other opportunities for the export sector.

He said that part of the changes they made was shifting marketing partners where from China and India, they also focused on Japan.

Dizon explained that part of the key facts in opening new markets is looking for potential partners which would be a big help for the companies especially those that had their products exported in countries that were greatly affected with the economic meltdown.

According to Dizon, negotiations are also going on with Australia and new Zealand but then they are still going back to the Asian market wherein Dizon said 70 percent of the export goes to the East Asian countries.

Aside from opening possibilities for other export partners, Dizon said that another key fact in opening new markets is on the production of big volumes.

“Manufacturers should address the sustainability of their supplies,” said Dizon who said that as for now, orders are still slower compared to the previous years but are ready to show some progress.

Jay Yuvallos, the president of Philexport Cebu said that they see a bright future ahead and that “there is no way but up.”

Yuvallos said that SEMP would be a good way to further help the industries and that they are happy that the industries are committed to do revisions and adjustments to address the changes in the market.

Five sectors presented their SEMP namely, the Cebu Health and Wellness Council, Cebu Furniture Industries Foundation, Cebu Gifts, Toys and Housewares Foundation, Fashion Accessories Manufacturers and Exporters and the Seaweed Industry Association of the Philippines.

The Cebu Health and Wellness Council shared that there are a lot of strengths that the industry has in order to successfully promote Cebu as one of the best destinations for health and wellness services and facilities.

They emphasized on Cebu’s location being an advantage wherein 50 percent of the received tourists come to Cebu and stay here without going to other provinces.

CHWC shared that despite the lack of coordination that they see among the key players which is one of their constraints, they believe that they could overcome it in time.

The industry believes that through the Republic Act 9593 or the Philippine Tourism Law, they have an idea on the government support that they would get. Also, they see the big help that they are getting from the travel operators in Cebu who have been very supportive of their measures and have also done their own initiatives to help the industry.

Hotel chain reports decrease in revenue

By Ehda M. Dagooc (The Freeman) Updated November 23, 2009 12:00 AM

CEBU, Philippines - Gatchalian-controlled Waterfront Philippines Inc. (WPI) and subsidiaries reported a slight decrease of its total revenue in 2008, as compared to the previous year from P1.96 billion in 2007, to P1.95 in 2008.

“[The year] 2008 has been one of the most challenging years in our industry, as it has been for every other player in the tourism and hospitality area. The global economic crunch came rather unexpectedly and it has brought with it the obvious implications for international travel, tourist spending and leisure spending in general,” said WPI chairman Renato B. Magadia.

Hotel operations generated a revenue of P1.85 billion, with rooms contributing 36 percent or P700.66 million, with F&B (food and beverage) putting in a share of 32 percent or P627.40 million.

Revenue per available rooms rose to P1,444 from the previous year’s P1,423, reflecting an increase of 1.45 percent.

Waterfront Cebu City Hotel and Casino accounts for 37 percent of total revenues while Manila Pavillon Hotel brought in a close 35 percent share.

Waterfront Airport Casino and Hotel in Mactan Island generated 13 percent of revenues. While Waterfront Insular Hotel Davao contributed seven percent and G Hotel provided three percent contribution to the company’s overall revenue.

Based on the 2008 annual report of the publicly-listed WPI, consolidated room revenues stood at P700.66 million. Average occupancy rate was at 59 percent with group average room rate at P2,400 in 2008 reflecting a revenue per available room of P1,444.

The F&B business of the company continue to be a source of its considerable revenue contributor.

WPI’s F&B revenues generated P627.54 million, making up 32 percent of hotel-gross revenue.

“Midyear, we braced ourselves for tough times as we watched travel and tourism data take the unfavorable plunge, and the possibility of a global recession loomed over our heads,” Magadia said in his chairman’s report.

He said the company’s outlook in 2008 went from optimistic to conservative. “Lesser tourist arrivals in the country meant lesser revenue. Worsening conditions in the global airline industry also meant that there was no guarantee of a steady stream of flights to assure us of an international clientele. Indeed, difficult times were at hand.”

Because of the crisis, Magadia said there was also a drop in business travel and leisure spending, as companies cut down on their travel expenses and as affluent travelers tended to hold off on luxury spending

“We have felt the repercussions not just in our main operations but also in our individual subsidiaries and service outlets,” he said.

However, he stressed that the company is far from being overcome by undue fears brought about by the widespread uncertainty and continuing talk of the crisis.

“The most important things you can have in a crisis are resolve and resilience: the will to weather the storm, and the ability to adapt and innovate. I believe this is what has kept Waterfront hotels formidable no matter the odds,” he said.

With new projections expecting the global economy to bounce back by 2010, Magadia said the company is encouraged by the prospect of better days.

“We continue to strive and innovate, and take advantage of the hidden opportunities that may emerge from the crisis. Perhaps it is well that we’ve been through tough times, so that we might revisit our strengths and keep moving on with the invaluable knowledge we’ve gained,” he said.

WPI’s subsidiaries include Waterfront Citigym & Wellness, Inc., Waterfront Food Concepts, Waterfront Management Corporation, Waterfront Entertainment Corporation, Mayo Bonanza Inc., and Waterfront Promotion LTD.

BOI grants perks to 8 projects worth P1.66 billion

By Ma. Elisa P. Osorio (The Philippine Star) Updated November 25, 2009 12:00 AM

MANILA, Philippines - The Board of Investments (BOI) has given tax breaks to eight new projects with combined investments of P1.661 billion.

The government grants fiscal and non-fiscal benefits to investment that fall under the Investments Priorities Plan (IPP).

Five of the eight projects are mass housing projects.

Filipino owned Phoenix Petroleum Philippine Inc., filed an application for the construction and operation of a P615-million facility with distribution and marketing operations for petroleum products.

For this project, the firm has started building five tanks with a total capacity of 48 billion liters. The firm will market and sell petroleum products on a wholesale basis to its Luzon retail station, companies and industrial users in CALABARZON and Metro Manila. The project is located in Davao.

Another Filipino company Philippine Hydro Inc filed an application to establish and operate a P120-million water treatment facility. The company will install a 10- kilometer pipeline that will supply clean potable water to government owned Norzagaray water district.

Singaporean firm Philippines Auto Components Inc. will invest P59.49 million on a new line in its existing plant in Laguna. The firm is a wholly owned subsidiary of Denso Singapore.

The pointer parts will be exported to Japan, China and Spain and will be used for the Toyota Corolla, Yaris, Camry and Vitz. This part is a very important one because it indicates the status of the car in terms of speed, temperature and others.

Filipino-owned Shelter System Development Corp. filed an application for a P70.253-million low cost economic housing units in Lipa City Batangas dubbed San Antonio Homes.

The project entails the development of 1.7 hectares of land and the construction of 250 units. A total of 116 new employees will be hired once commercial operations start January next year.

Fifth Ave. Development Corp. will build a mass housing facility called P189-million Residencia Edades Condominium in Lahug Cebu.

The project involves the development of 802 square meters of land for the construction of a 12 story building with over 200 housing units.

Federal Land Inc. invested P279 million for the development of a mass housing condominium in Marikina City dubbed Marquinton-Toledo Tower. The project involves the development of 3,293 square meters of land.

Communities Isabella Inc received tax breaks for a P232 million project tagged Camella Isabella. This involves the development 204 housing units.

Household Development Corp. invested P97 million on a mass housing project in Antipolo named Crestwood Subdivision. A total of 85 housing units will be built.