Boulevard Holdings to invest additional P40 million in Fridays Hotel

MANILA, Philippines - Publicly listed Boulevard Holdings Inc. (BHI) will infuse an additional P40 million into its Fridays Hotel unit in Boracay Island from internally generated funds. Fridays Boracay will use the money for the acquisition of additional property within Boracay for its resort expansion.

A portion of the money will be allocated for the refurbishment and rehabilitation of its existing facilities while the business is on its low season. The planned project activities are scheduled in preparation for the nearly fully booked high season that starts in October of this year up through June 2010 based on advance bookings already received from regular and satisfied foreign and local clients.

Mauro Badiola, BHI vice president for finance, said that the parent company regularly receives reports from its subsidiary that currently does not bode well for the performance of hotels in Boracay Island. “The report of our General Manager, Mr. Barry Schofield, recently indicated that tourism in Boracay is being hammered by several factors: The dwindling visits of the regional Western expat travelers and local elite clients, the recent stoppage since June 25 of virtually all direct flights to Caticlan (and diversion to Kalibo) by Zest Air, Cebu Pacific, and PAL due to plane size to runway safety considerations, the swine flue, the recent direct hits from the last few typhoons, and overall disappearance in global demand for travel services. Everyone is suffering for now, even the newly opened ones like the Shangri La Boracay.”

Nevertheless, Badiola added “that when the economy picks up even through traditional peak travel seasons, the first thing people will do is reward themselves and their family with some quality but affordable vacation. We remain confident that the Philippine government tirelessly promotes its tourism assets abroad, and foresee some move upward in overall tourism traffic also as long as hotels – elite or budget – but keep their prices affordable and reasonable, in relation to value experienced by the client.”

Another unit of BHI, Fridays Boquete Island, continues to focus on the ongoing construction of its 85-room boutique hotel in the lagoons of Puerto Galera. Expected soft opening is scheduled within the first quarter of 2010. With this in mind, the public company plans to raise an additional P80 million, largely from disposal of some of its assets abroad and from within. BHI is a stakeholder and partner of Gems Cayman which owns Hong Kong-based Gems International, which in turn is a partner of Macquarie in operating another fund manager, called ARF Investment Managemet Ltd., managing the Asia Resourdces Fund Ltd. (ARFL). ARFL is now on its fund-raising activity.

BHI company CEO, J. Marcel Panlilio, stated that, “at some point BHI’s cash will be a large fraction of its market value, and so, we must channel funds to what we see as good growth but proven businesses such as resort chain development. Also BHI has an extensive set of beach properties throughout the Philippines, so the investment yield won’t be too diluted with the land acquisition aspect.”

To fully complete its resort chain investment, BHI intends all in all to raise about P650 million from a combination of asset disposals, internally generated funds, and private placement with foreign private equity.