Alliance Global Group Inc., the investment company of Philippine billionaire Andrew Tan, is looking to expand its casino resort venture beyond Manila to tap into fast-growing areas outside of the national capital.
“We are actively looking at some of the key tourism hubs all over the Philippines as potential expansion sites,” the firm’s Chief Executive Officer Kevin Andrew Tan said during the company’s annual meeting on Thursday.
The firm is betting that the tourism sector will rebound along with a pick up in global travel, while the country may also benefit from China’s crackdown on Macau that’s left a cloud hanging over Asia’s preeminent gambling hub. The Philippines’ gaming sector is also undergoing a broader overhaul, with the government considering the sale of state-owned casinos.
Read more: Philippine Gaming Regulator Plans Sale of Its Casinos
Travellers International Hotel, Alliance’s gaming venture, returned to profitability in 2022 with net income of 1.1 billion pesos ($19.6 million) as gross-gaming revenue hit a record and non-gaming earnings continued to recover. Alliance Global has earmarked about 4 billion pesos of this year’s 70-billion-peso planned capital expenditure for ongoing expansion of Travellers’ Newport World Resorts casino complex. Alliance Global last month bought out Genting Group, its casino-venture partner.
To sustain the strong growth trajectory, Travellers wants to increase the share of premium mass-market gamblers to half of gross-gaming revenue, Kevin Andrew Tan said. It will also expand VIP junket operations, which in 2022 posted revenue more than double pre-pandemic levels.
Shares of Alliance Global fell 1.5% in Manila trading, set for a sixth straight daily loss in the longest run of declines since September.
Other highlights from the AGM:
- Megaworld, the group’s property arm and biggest contributor to net income, is reducing its foreign exchange exposure to minimize the impact of currency volatility.
- Higher interest rates are having little impact on profitability as only 20% of the group’s borrowings have floating interest rates.
- While work-from-home arrangements cover about 30% of the workforce of the business-process management and outsourcing office tenants of Megaworld, there’s been increasing demand for office space coming from the information technology and BPO sectors.
- Megaworld’s office occupancy rate is at 90%.
- Emperador, the group’s distillery venture, will spend 6 billion pesos of its 7 billion peso capex this year to expand its whiskey facility and infrastructure in Scotland and will pursue other growth opportunities.
- Alliance Global’s restaurant venture, through which it holds the Philippine franchise of McDonald’s, will resume aggressive expansion this year and most of its new stores will be in faster-growing areas outside of Metro Manila.