Heritage Hotel owner reports higher sales

GRAND PLAZA Hotel Corp., owner of the deluxe The Heritage Hotel Manila, reported a modest 5% hike in profits for 2007, after higher sales from a price increase and cost controls. Net income went up to P165.57 million in 2007 from P157.59 million the previous year, it said in a filing. Grand Plaza said revenues grew by 3.96% to P697.37 million in 2007 from 2006’s P670.79 million with the bulk generated by room revenues, as guests paid a higher room rate for new rooms. "With a stable political climate in the Philippines combined with the strong [global] economy, the Philippine tourism market showed strong growth in year 2007," it said. Room revenues reached P354.02 million, up by 7.57% from P329.1 million although occupancy dropped due to the closure of some rooms for renovations. However, the drop in occupancy was alleviated by the significant improvement in room rates, Grand Plaza said. The average room rate increased to P3,271 in 2007 from P2,852 the previous year. "The improvement in average room rate is a result of the newly renovated rooms," it said. Food and beverage revenue was flat at P228.05 million in 2007 from P224.96 million as food covers dropped by 10% due to less breakfast cover caused by lower room occupancy. Grand Plaza said: "The casino and café did not perform better than last year. [The banquet] was able to increase its revenue by P6 million compared with last year." Revenues from other operating units — the business center and the laundry and telephone departments — went down by 18% to P7.18 million due to lower telephone revenues, as more guests used mobile phones instead of hotel phones. But this was partially offset by the higher Internet charges. While cost of sales went up by 5.67% to P65.38 million, gross profit still improved by 4.4% to P631.99 million. — Ruby Anne M. Rubio, BusinessWorld