Profits down by P16 million: Waterfront revenues suffer drop in 2009

CEBU, Philippines – The tourism slump brought about by the global economic recession has taken toll on the performance of the publicly-listed Waterfront Philippines Inc. (WPI) properties in 2009, as it posted a slight decline of revenue performance by P16 million.

The Gatchalian-controlled company declared total revenue of P1.79 billion in 2009, a P16 million drop from P1.95 billion it earned in 2008.

WPI president Kenneth Gatchalian reported during the company’s Stockholders Meeting held over the weekend at Waterfront Cebu City Hotel and Casino, that despite the shrinking of its total revenue generation in 2009, the company managed to keep its Gross Operating Profit (GOR) up.

“Although total revenue was slightly lower than 2008, GOP has increased this year by 2.24 percent, from P449.74 million in 2008 to P459.82 million in 2009,” Gatchalian said.

According to Gatchalian hotel operations have been constantly generating positive revenue of P1.79 billion, with rooms contributing 32 percent or P615.77 million, and food an beverage (F&B) putting in a share of 31 percent or P597.35 million.

Waterfront Cebu City Hotel and Casino, WPI’s flagship property accounted for 36 percent of the company’s total revenues while Manila Pavillon Hotel brings in a close to 34 percent share.

Waterfront Airport Hotel and Casino in Cebu also generated 13 percent of revenues, while Waterfront Insular Hotel Davao provided eight percent and G Hotels brought about three percent to the company’s total revenue distribution.

WPI has been consistently operating at a down-swing performance in two years, as the P1.95 billion it earned in 2008 was also a slight decline from P1.96 billion it made in 2007.

Although bullish about the country’s recovering tourism and business climate, Gatchalian said the company will spend on upgrading the existing properties of the company, instead of pursuing major expansions such as acquiring more hotels and properties to expand its network base.

Gatchalian, however refused to divulge the company’s total capital expidenture (capex) for the renovation program of all the WPI properties nationwide, only said that the company will not resort to bank financing, but will get its renovation capex from the internal resources.

The Waterfront Cebu City Hotel and Casino will be one of the priority properties that will be upgraded starting this year, he said.

WPI chairman Renato B. Magadia said the hotel competition in the Philippines is becoming much intense now, specifically while the sector is on its way to recovery.

With the entry of new administration in the government, Gatchalian hopes that it will push up the tourism industry in the country.

WPI’s plan to upgrade the facilities of all its properties is in preparation for the tourism turn-around, and competes head on with the new and existing players in the hotel industry in the country, specifically Cebu, where two of its big properties are situated.

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