SM Hotels and Convention Corp. plans to increase its hotel room count almost 51% by 2029 through its continued partnership with Radisson Hotel Group.
In a June 10 news release, SM Hotels said it will open seven new hotels by the end of 2029 that will see its hotel count grow from 10 hotels to 17 and its room count to grow from 2,602 rooms to 3,923. Most of the new inventory will be completed by the end of 2028.
SM Hotels is the hotels division of Manila-based investment and development firm SM Prime Holdings. The company, which started in 1985 as a developer of shopping malls, will pay for the additions via a capital expenditure program funded by cash flows valued at 10 billion Philippine pesos ($179 million).
All of SM Hotels' current hotels are in The Philippines. Six of its hotels in development will be branded Park Inn by Radisson, while the remaining one will be with the flagship Radisson hotel brand.
SM Hotels' expansion will include one hotel in Filipino capital Manila, but the development push also includes regional markets. Two hotels are planned in Calabarzon, two hotels are being built in Cebu, along with single properties in Laoag and Luzon.
Peggy Angeles, SM Hotels’ executive vice president, said the move further strengthens the company’s “midscale and high-end segments while leveraging synergies with the SM Prime’s diverse property network.”
“Our hotels serve as catalysts for local economic activity. We are focused on creating long-term value through jobs, tourism flows and sustained growth that enhances SM Prime’s diversified revenue base,” Angeles said.
SM Hotels’ existing hotel portfolio includes the 260-room Taal Vista Hotel; 395-room Radisson Blu Hotel Cebu; 347-room Conrad Manila, part of the Mall of Asia Complex, and 153-room Park Inn by Radisson Bacolod. The division also owns and manages eight convention centers in The Philippines.
Angeles added underlying the plan are strong, long-term fundamentals in domestic travel in The Philippines.
John Nai Peng Ong, SM Prime's chief finance officer, told CoStar News Hotels that SM Prime takes an integrated development approach.
“We anchor on our retail mall developments and complement them with our key business segments, namely our residences, commercial offices, hotels and convention centers,” he said.
It's an opportune time to increase hotel development in The Philippines as international arrivals are forecast to reach 6.6 million by the end of the year.
“The accommodation requirements and supply for the future will no longer be able to cater to the expected foreign arrivals,” Ong said, adding that domestic tourism, SM Hotels’ key market, will continue to grow as well.
“SM Prime is not only building for today but for tomorrow. By the time the numbers are achieved, SM Prime is ready to accommodate the demand,” he said.
CoStar hospitality data shows that hotels in the Metro Manila market achieved 62.4% occupancy in April, down 0.9% year over year. Average daily rate, however, rose 6.3% to 5,935.09 Philippine pesos ($106.20), and revenue per available room increased 5.3% to 3,702.80 pesos.
(Updated on June 12 with comments from SM Prime Holdings Chief Finance Officer John Nai Peng Ong.)