The turnaround of Dos Palmas

Nobody expected much from Dos Palmas after a band of Abu Sayyaf took resort guests, many of them foreigners, as hostages in May 2001. As expected, it shut down.

"We surprised the industry when we reopened for business less than a year after," said Dos Palmas Arreceffi Island Resorts, Inc. president and general manager Ivan Lim. "We decided to reopen because we wanted to prove that we could make it."

One of the first decisions made by the company upon reopening was to increase room rates by between 20% and 30%.

"Our market niche is very small. We cater to the traveler who values exclusivity and privacy, on the one hand, and reasonable accessibility, on the other hand. We are the closest resort to Puerto Princesa, the capital of Palawan," said sales and marketing manager Leeds Trompeta. "Foreigners were more adventurous and gung-ho about trying out the resort when we reopened and they continue to account for 70% of our business."

Finances

The 20-hectare island-resort was purchased in 1995 by Davao-based retailer Henry Lim, who visited Palawan frequently for some scuba-diving and leisure time.

"My father was a visionary. He saw the potential of the island’s diverse ecosystem and the amazing marine life around it. What we children saw were the flies that covered the island and the cogon grass. The sand was colored gray, the result of the slash-and-burn farming methods of its inhabitants. The only outstanding physical characteristic of the island were the two buri palms, which inspired the name of the resort," said administrative manager Noreen Gaye Lim.

Two years since reopening the island-resort, Dos Palmas Arreceffi’s finances are healthy. It saw an 80% year-on-year increase in profits in 2003, paving the way for the full repayment of loans taken to renovate the 48-room resort.

In part, the company’s healthy numbers could be traced to the simplification of operations. As a result of multi-tasking, the company has been able to reduce its sales force in Metro Manila to seven from the industry average of 10 to 15 and its resort staff from the original 130 to the current 70.

Marketing

The company has also benefited from an aggressive marketing strategy for both foreign and local tourists.

"We have been trying to develop the Korean honeymooners market, which is high-end. Locally, we focus on the conference and incentive travel market, which corporations sponsor, " said Trompeta.

A bay cottage goes for $188 per person per night. For local travelers, a package stay of three days and two nights costs P16,000 per person, inclusive of two-way plane fare, all buffet meals, and access to resort facilities such as scuba-diving.

For the first four months of 2004, the resort reported so far an average occupancy rate of 70% to 80%, higher than the industry average of 60%. Occupancy is expected to remain high in July and August because of twice-weekly direct Seoul-Puerto Princesa flights by Cebu Pacific. Each flight is expected to bring in 100 tourists.

"During the lean season, our occupancy is down to 20%," said Trompeta.

Plans

Since the start of the year, Dos Palmas Arreceffi has been gradually renovating the resort’s rooms. The company has also set aside funds to put up a separate building for a spa in lieu of the existing facility. Initial funding of P5 million comes from corporate savings.

As part of its risk management, the company has put up perimeter buoys around the island and has invested in radar equipment, which can detect boats as far as two kilometers away. It has also beefed up its security team, which closely coordinates with citizen-volunteers from neighboring communities and the nearby western command of the Armed Forces of the Philippines.

"In 2002, our goal was to get tourists to check us out. Today, our goal is to be the dominant resort in the country," said Lim.