TRAVELLERS International Hotel Group Inc. on Friday said it will spend up to P10 billion this year mainly for the construction of Phase 3 of Resorts World Manila as it remains bullish about the industry’s growth despite the current glut of casinos in the country.
“The combined cost for Phase 2 and Phase 3 is around $400 to $450 million. So, the P8-P10 billion capex will be for the completion of Phase 2 and mainly for the construction of Phase 3,” Kingson Sian, president and chief executive officer of Travellers, told reporters at a press briefing after the company’s stockholders’ meeting.
Travellers is a joint venture between the Andrew Tan-led Alliance Global Group Inc. and Genting Hong Kong Ltd.
Phase 3 will house three hotels, casino and retail stores, Sian said. He said that Phase 2 will be completed in September, thus, the bulk of the P8 to 10 billion spending will be utilized for the construction of Hilton and Sheraton hotels as well as the new wing for Maxims Hotel, which will have 357, 391 and 191 rooms, respectively.
In addition, Phase 3 will have 14,000 square meters of gaming facilities and 3,200 square meters of retail stores.
Upon its completion in September this year, Phase 2 will have 228 new hotel rooms for Marriott Hotel Manila’s west wing plus additional entertainment areas in Remington Hotel.
“The ongoing expansion will increase existing inventory of hotel rooms from the current 1,700 rooms to 2,645 rooms. Together with over 18,000 square meters of retail space, a world-class theater, the country’s largest ballroom and multiple entertainment venues, we are on course to becoming one of the premier integrated entertainment and tourism destinations in Asia,” Sian said.
He explained that Phase 3 will open in different stages, starting end of next year toward 2018. Therefore, the respective capex for next year and 2018 will also support completion of Phase 3, Sian said.
He said Travellers aims to strike a balance in the revenue mix of its gaming and non-gaming businesses.
“At present, the non-gaming business merely accounts for 10 to 15 percent of our revenues, and that gaming remains our strongest revenue driver. But hopefully we want to increase the non-gaming’s contributions up to 30 percent of our total revenues,” Sian said.
Last year, the company’s gaming revenues amounted to P24.2 billion against its non-gaming revenue of P3.5 billion.
Sian said that despite the oversupply situation of casinos at present, the company remains very optimistic that the market in the next five years would eventually take off.
“With the oversupply situation now, obviously it will take time for the market to absorb it. But having said that, our view of the future is very bright; otherwise, we will not be investing,” Sian said.
Sian added that Travellers being primarily a tourism-driven business, they are optimistic that their casinos would be exempt from the forthcoming implementation of the liquor and smoking ban.
“We are hoping that we will be exempt from the liquor and smoking ban in our casinos,” he said.
He added that Phase 4 of Resorts World Manila, which will not have a casino facility, will begin construction in 2018 at the earliest.