Manila Exposition Complex (MEC), the lessee of the World Trade Centre Metro Manila (WTCMM). The venue is the premium exhibition venue in the Philippines with a total of 11,300 square metres of exhibition space, together with several function rooms and meeting rooms.
What did Hotel Solutions Partnership achieve for the client?
The client was originally intending to develop a full service five star hotel with 700 keys and extensive facilities. Consequently, the client needed independent guidance as to the appropriate product for the market, particularly as the proposal had to appeal to investors.
HSP was able to clearly indicate and justify its recommendations, based on the client’s objectives, in a methodical and logical manner presented in the market study and investment appraisal. HSP was able to introduce a number of hotel investment companies to the client, as well as having the opportunity to educate and guide the client as to the nature of hotel investment.
Gabrielle Gambina, Felix Guggenheim and Vicki Aldaba
The planned development at WTCMM includes a state-of-the-art office building covering an area in excess of 5,000 square metres (offering the largest office floor plate in Manila) and a 250 bedroom upscale hotel adjoining the exhibition centre.
The neighbourhood of WTCMM is fast establishing itself as the MICE and entertainment area of Manila, with a flurry of hotel and casino development activity nearby.
Currently, WTCMM patrons stay in nearby hotels. However, as the number of events held at WTCMM increases, so does the potential demand for hotel accommodation from organisers, exhibitors, set-up teams, attendees.
To this end, Hotel Solutions Partnership (HSP) was engaged to prepare a feasibility study which would be the basis for approaching and engaging with potential investors. The terms of engagement included:
- a survey of the current and future hotel market in Manila
- a review of the accommodation demand generators and economic indicators, including foreign direct investment, airline routes/ airport capacity, planned regeneration, infrastructure, etc
- analysis of tourism statistics
- advice on the most suitable accommodation product for WTCMM
- preparation of financial projections for the recommended accommodation option
- preparation of investment memorandum
- presentation of a short list of potential international and national investors
- creation and management of a data room with all relevant documentation pertaining to WTCMM and the planned development
- ongoing discussions and liaison between MEC and potential investors.
- In the first phase of the scope of work HSP consultants visited the WTCMM and proposed hotel site. A briefing was held with the client’s project team located on site. Subsequently, the team visited all hotels deemed to be of competitive relevance and interviewed the management of these hotels. They also met with leading officials in the statistics department/tourism authority and economic development authority to understand the current and future economic and tourism outlook for Manila.
- Following on from the primary research, Vicki and Gabrielle carried out secondary desk research and analysis to build a picture of the potential visitor profile and tourism scenario in Manila. Of particular relevance were the hotel rates being offered by the competitive hotels on a daily basis.
- Internal discussions within the team indicated that a full service hotel with extensive meeting space was not an advisable option as there would be considerable overlap with WTCMM and other MICE venues nearby. Hotels in the city seem to thrive on events as opposed to meetings. To this end, the team proposed focusing on the millennial traveller and providing exciting events spaces within the hotel, particularly food and beverage outlets. Given the nature of the visitor and the competitive hotel set, the team recommended a chic hip hotel that would appeal to the millennial traveller. The focus being on functionality and technology as opposed to being over-designed (and therefore costly to maintain). Therefore, the product has an identifiable USP in the market.
- The team engaged with potential operators, most of whom have recently launched a ‘fresh, hip’ brand to appeal to the millennial generation.
- After a debrief with the client, it was agreed that the team should pursue their recommendation of upscale hotel for the financial and investment analysis stage.
- Financial projections were prepared for the 250 bedroom hotel, together with investment returns analysis.
- The final report was discussed in detail with the client.
- HSP was retained to approach a shortlist of 6 potential investors/ lessees for the hotel development. An investment memorandum of the opportunity was prepared by HSP.
- HSP created a data room, sent out NDAs together with the investment memorandum to interested parties.
- The appetite from hotel companies for Manila is quite healthy. The majority of investors, however, would only dip their toes in the market if they could have a local company partner with them.