Saturday, January 7, 2012

Betting big on budget hotels

Of the seven children of the late industrialist Ramon del Rosario Sr., it was only his youngest, Jose Mari, who was able to stay with him when he was posted as ambassador to Canada, Germany and Japan.

The nine years spent helping his father dispense his official duties exposed the younger del Rosario to the very best that the glamorous yet highly competitive hotel world can offer, and he knew then that his career lay in the never-boring hospitality industry.
Thus while his elder brother, Ramon Jr.,

followed in their father’s footsteps and pursued a career in the corporate world, Jose Mari continued on to Valais, Switzerland to complete a diploma in hotel and restaurant management from Hotelconsult Schulhotels after graduating with a Commerce degree from De La Salle University.

There was no looking back since, and del Rosario was able to chart an impressive career in the hospitality industry. He started out as a front desk receptionist at the Hotel Lausanne Palace in Switzerland and worked his way up to food and beverage coordinator at The Manila Peninsula Hotel, management trainee at The Imperial Hotel in Japan and was eventually named the first Filipino general manager and chief operating officer of The Manila Hotel.

Yet when the time came for him to switch careers from employee to entrepreneur in 1997, after going through the General Managers Program of Cornell University in New York and getting his Masters of Science in Management from the Arthur D. Little School of Management in Cambridge, Massachusetts, he did not go the five-star route.

Del Rosario, who left The Manila Hotel after it was taken over by the Emilio Yap group to pursue graduate studies, surveyed the hospitality landscape in the Philippines and saw that the five-star hotel industry was limited and not contributing much to the development of the tourism sector in the Philippines.
The sector that he found more compelling was the affordable, no-frills segment of the hospitality industry that has for long been ignored and consequently underserved.

According to the father of four, a good number of today’s travelers are not actually looking for the “bells and whistles” that come with the deluxe hotels, such as the mint on the pillow at sundown, the gliding staircase and the turndown service.

What most people are looking for, del Rosario says, are a comfortable bed, a clean bathroom and safety and security. They do not want to spend too much for their accommodations since they are out of the hotel most of the day anyway. They just need a place to sleep and literally and figuratively recharge their batteries before going off again the next day.

But the middle-market travelers that Del Rosario wants to cater to will not just stay anywhere, he says. They still want a brand that they can trust and want consistency in service offerings.

This is why when the chance to bring in the Microtel brand, Del Rosario pounced on it, armed with his own money, steadfast belief in his cause and the all-important moral and financial support from his elder brother.

“I was able to convince Ramon to put in some money. He made a leap of faith for the sake of his younger brother,” recalls Del Rosario with a smile.

Paramount Property Management Co. was set up in 1997, initially to provide property management services for real estate projects that were sprouting at that time. Paramount, for instance, managed the Phinma office buildings and also the Cebu City Sports Club of the Ayala group. But just the next year, Del Rosario went back to his first love and his Paramount brought in the Microtel franchise to meet the demand for affordable hotel accommodations.

The first Microtel hotel was opened in Hacienda Luisita in Tarlac in 2001 and 10 years later, the chain has expanded into nine. Plans underway to open at least four more in 2012—one each in the expansion property of the Ayala Technohub in Quezon City, Sta. Rosa, Laguna, Naga City in Camarines Sur and the former Clark Airfield in Pampanga.

And buoyed by the success of the Microtel branches in the vacation spots of Boracay, Baguio and Puerto Princesa, Del Rosario says he is also looking to put up the Microtel brand in Panglao in Bohol and two more in Palawan.

“We are looking to expand in major crossroads and business centers as well as in tourist destinations,” says the 54-year-old Del Rosario.

Del Rosario is bullish on the growth prospects of Microtel because he expects that domestic and regional tourists will continue to rule the field, and they will most likely go for the budget hotels and not five-star accommodations.

“In 2011, 70 percent of the guests are intracountry travelers and we see that continuing up to next year,” he says, “travelers from East Asia and North Asia are coming in strongly and they are not really looking for five-star but rather value accommodations.”

In contrast, he does not see the long haul jet set market coming soon to the Philippines because of the economic difficulties in the developed countries that have drastically reduced travel budgets of their citizens.

Del Rosario says one piece of evidence that Microtel is headed in the right direction is the fervent interest shown by other real estate developers in the budget travel segment.

Megaworld Corp., SM Development Corp. Ayala Land Inc. the Gokongwei group are just some of the ‘big boys’ of real estate development now developing or are set to develop budget hotels all over the country.

To prepare for the onslaught of formidable competition, Del Rosario says that Microtel would bank on its years of experience in the sector, its track record for providing value-for-money services, location in key business centers, the backing of the Phinma group to which Paramount now belongs and growing marketing and distribution reach.

He says that Microtel’s online presence is already reaping dividends for the company, saying that many travelers are now more comfortable about booking their rooms through the Internet. Online promotions will be combined with the usual sales calls as well as presence in important local and foreign trade shows to drive traffic to Microtel.

Del Rosario concludes that Microtel has to remain nimble enough to quickly adapt to a fast-changing marketplace as he envisions competition to grow even more as more travelers around the world realize the tourism gem that is the Philippines.

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