8990 set to open first budget hotel venture
Property developer 8990 Holdings plans to open by the end of this month the 168-room Azalea Express in Mandaluyong, its first venture into the budget hotel space.
The rooms are carved out of the residential condominium units at Urban Deca Homes along Edsa Mandaluyong and will be offered at a price below P2,500 per night, 8990 Holdings president Willibardo Uy said in a briefing.
Azalea Express is a limited service hotel that is expected to compete with the likes of GoHotel and Red Planet chains. Its rooms are estimated at 13 square meters each.
To date, the group has two full-service hotel properties under the Azalea brand, one in Baguio and another in Boracay.
The group is now looking at its existing inventory, where certain sites could be converted into hotels instead of pursuing residential developments. Uy said the expansion of the hospitality business was “because of our good experience with Azalea Baguio and Boracay.”
“We still have properties in Makati, in Manila and Cebu,” Uy said.
Meanwhile, Uy said estimated losses from the six-month closure of Azalea Boracay, mostly in the form of foregone revenues, would likely reach about P100 million. “We had to refund a lot of advance payments,” Uy said.
Malacañang ordered the six-month closure of Boracay Island starting last April 26 to pave the way for its rehabilitation.
“We were one of the first to be certified compliant. We’re just waiting for them to open,” he said.
8990 Holdings reported better-than-expected business in the first semester of the year, defying the usually sluggish second quarter, on the back of pent-up demand from end-users.
Revenue in the first six months grew by 98 percent year-on-year to some P6 billion, beating the company’s P5.1 billion target for the period. Net profit margin amounted to 40 percent, better than 8990’s full-year goal of 37.5 percent.
These numbers suggested a net profit of P2.4 billion for the full year compared to the P1.2 billion last year, although 8990 Holdings had yet to release its six-month financial statement.