salvages John Hay developers' fortunes
Posted: 7:40 PM (Manila Time) | Jan. 26, 2002
By Vincent Cabreza
Inquirer News Service, PDI Northern Luzon Bureau
BAGUIO CITY It takes at least seven hours these days to drive to this mountain resort city, whether you travel by bus through Marcos Highway or Naguilian Road, or take the scenic tour up winding Kennon Road.
Once here, only the relatively chilly air reminds you of Baguio's once pristine attraction. Traffic jams, unregulated bargain houses and sidewalk vendors greet visitors.
But the city's perilous turn towards urban decay has not discouraged domestic tourism. The Department of Tourism was surprised by the brisk rate of hotel bookings here between January 2001 and the first week of January this year.
Baguio's high visitor arrival has even guaranteed developers of Camp John Hay its first profitable investment project in over five years of scandals.
These are full bookings at the maiden run of the 189-room Camp John Hay Manor in December and a 90-percent stock commitment to a unique investment formula packaged exclusively for the developer's only hotel venture here.
Noli Reyes, Manor resident manager, said the tourism industry's good fortune can be traced to the one unalterable character of Baguio the city's self-contained environment makes it one of the country's safest havens.
He said Baguio's "rarely articulated security" complements the nature of the city's usual visitors.
In the last 50 years, the city had been the venue for corporate meetings or the weekly haunt of vacationing corporate executives, Reyes explained.
This is based on his experience with the former Hyatt Terraces Baguio, the five-star hotel that had been a by-word for local tourism, alongside the former Pines Hotel.
The Hyatt was destroyed during the 1990 Luzon earthquake while the Pines Hotel was gutted by fire in 1985.
The city now has over 30 hotels, inns and lodging houses scattered throughout downtown Baguio.
But alongside the government-owned Teachers' Camp, these have not been able to accommodate all of still-growing number of vacationing businessmen and families who travel to Baguio on weekend outings, Reyes said.
"If we talk about foreign clientele, we have a big drawback there. If we talk about domestic tourism, (bad roads) are not the drawbacks. Everybody wants to go to Baguio," he pointed out.
These factors have become good enough reasons for Camp John Hay developer, Camp John Hay Development Corp. (CJHDevco), to temporarily scale down its projections, and rethink its concept of the old American rest and recreation center.
John Hay's lease contract was won in 1997 by a consortium led by the Fil-Estate Group of companies. Its subsidiary development firm, CJHDevco, had been drawing together facilities earmarked for a top-class international tourism complex.
But controversy had hounded the CJHDevco projects. Moderate and militant groups critical of John Hay's "privatization" have sustained lobby efforts to block the project.
Last year, CJHDevco's multi-billion peso log homes project was implicated in reports that identified deposed President Joseph Estrada and his cronies as the project's direct beneficiaries.
Fil-Estate president, Robert John Sobrepeņa, acknowledged in an earlier interview that bad press had not helped market many of their John Hay projects.
But since the Manor's extraordinary reception in December last year, CJHDevco had gone into the thick of negotiations seeking to capitalize a built-in conference hall for the property that would accommodate 2,000 people.
There are plans to re-introduce pollution-free shuttle services, which Sobrepeņa proposed to power up via liquefied petroleum gas or by electricity, to make John Hay accessible again to the "car-less" tourists.
Reyes said these internal changes have been encouraged by Baguio's recent tourism boom.
"We really don't have the facilities There are factors about John Hay's Manor project, which we have to evaluate. The original concept was to run (the Manor) as a condominium. There were no provisions for seminar rooms or conference rooms. I have a small boardroom good for about 12 people The (DOT) is coming over to inspect the Manor for accreditation. I don't have a swimming pool (to show them), I don't have a gym, I don't have a spa. They might characterize (the Manor) as a negative-two star hotel," Reyes said.
Despite these liabilities, the Manor had opened to good business last year.
It noted a 58-percent reservation rate on its available 68 units on Dec. 1, and saw it fluctuate up by 20 to 30 percent during the Fil-Am golf tournament in December.
More than half of the Manor is still under construction, and will take until the end of the year to complete.
But the completed rooms are cream-brown units that suggest a country flavor compatible with Baguio's historic links to the American colonial government.
Reyes said the room rates match the going rates in Baguio, making the Manor accessible to domestic and even city-based visitors.
Sobrepeņa told the INQUIRER that government's new interest in tourism was "the right direction."
"The Filipino people by nature are probably the most adaptable to this (tourism) industry than any other people in Asia. We speak English, we invite strangers to our homes, that's the kind of culture I think that works in the area of tourism," he said.
Tourism has also inspired Fil-Estate to undertake the "concept of stock share proposals."
Sobrepeņa had initialed a "time-sharing" version for a stock-sharing scheme that allows an investor to put in no less than 1 million pesos to help capitalize the Manor and its still-to-be built twin, the 250-unit John Hay Suites.
The "time-sharing" scheme offers 189 Manor rooms to investors for a renewable 15-year proprietary lease, at condominium rates that vary between 1 million and 10 million pesos, according to the room sizes and the unit's profitability.
But instead of a straightforward condominium transaction, the investors agree to a buy-back lease agreement that allows the Manor hotel administrator to rent out the leased rooms. The Manor investor is guaranteed 70 percent of the room's 15-year duration take.
It was tested initially by the Fontana Leisure properties in the Clark Special Economic Zone, said Reyes.
The proof of the Manor investment's success had been in the bookings. Reyes said the only bookings he had turned down since December had been conventions.
"But that won't be the case for long," he said.