Travellers International eyes debt mart to fund $1.55-B tourism projects

Travellers International Hotel Group Inc., a 50-50 joint venture between Alliance Global Group Inc. (AGGI) of tycoon Andrew Tan and Hong Kong-based Star Cruises Ltd., may tap the debt market next year to fund its planned two large-scale tourism-oriented projects worth around $1.55 billion.

In a press briefing following the company’s annual stockholders meeting yesterday, AGGI president Kingson Sian said Travellers is now preparing for the funding requirements of the Bayshore City which will form part of Philippine Amusement and Gaming Corp.’s $15-billion Entertainment City along Roxas Blvd.; and the 7.8-hectare Newport City integrated resort at the Villamor Airbase in Pasay City.

 “We’re in the process of finalizing the masterplan for Bayshore as well as how to finance the project which we hope to get started either in the first quarter or second quarter next year,” Sian said.

Sian said Travellers has a lot of flexibility to raise cash. “Our balance sheet is strong. We have no debt so we can borrow,” he said.

Of the estimated capital requirement, $1.1 billion will go to Travellers’ Bayshore City project which will entail the development of an iconic structure to symbolize the rich culture and heritage of the Philippines, three to four hotels with six-star amenities, a world-class theme park and museum, residential units and gaming and entertainment facilities.

The remaining $450 million will be used to complete the development of Newport City which includes a P3.8-billion all-suite Maxims Hotel, an upscale hotel brand of the Genting Group, that will house 176 rooms with a gross floor area of more than 20,000 square meters.

Newport City will also feature a five-star 365-room Marriott Hotel, a three-star hotel with 1,060 rooms as well as retail, gaming and entertainment areas. 

Marriott is slated to open to the public in 2009 while Maxims and the three-star hotel will follow next year.

Maxims’ hotel rooms will include three villas each with a private swimming pool and 24 suites equipped with a private outdoor jacuzzi and garden.

Both projects, when completed, will make Travellers the biggest hotel operator in the Philippines with a total room capacity of 5,000.

Travellers, formerly the tourism arm of AGGI, has obtained a “provisional license” from Pagcor to build a multibillion-dollar casino and tourism complex in the Manila Bay reclamation area.

Sian said the company’s partnership with Star Cruises is in line with the group’s vision to put the Philippines on the radar screens of tourists and foreign investors.

Star Cruises is the third largest cruise line operator in the world with assets of $6.4 billion last year while the Genting Group, with total assets of $10 billion, is the largest Asian-based leisure, entertainment and hospitality conglomerate with close to 40 years experience.

AGGI, meanwhile, is one of the country’s most liquid conglomerates with a cash hoard of P24.9 billion and consolidated assets of P108 billion as of the first quarter of 2008. 

Sian expects Travellers to account for a significant chunk of AGGI’s total revenues in two or three years. “Tourism is going to be a major business for AGGI in the coming years,” he said.

Tan pointed out AGGI’s strong track record of spotting opportunities in the market and transforming these opportunities into major business segments for the company. In the property sector, Megaworld has risen from a small property developer in the late 1980s into the country’s largest residential condominium developer and BPO office builder and landlord.

AGGI is looking at another banner year with net earnings projected to grow 18.5 percent to P3.9 billion from only P3.29 billion last year.