Alliance Global Group Inc. (AGI), the investment arm of tycoon Dr. Andrew Tan, expects its fast food, malls, and hotels businesses to post the strongest growth this year as consumer spending remains high.
During the firm’s annual stockholders’ meeting on Thursday, July 18, AGI President and Chief Executive Officer Kevin Andrew L. Tan said, “we believe that each of our segments have their own long-term growth stories. But we are most excited about the growth opportunities presented by our tourism and leisure segment.”
He said these segments are represented by Travellers International Hotel Group Inc. and Megaworld Corporation.
“This is because we still see an enormous potential in the country's hospitality sector, which is recovering from its pre-pandemic performance… The sector is currently recovering, and we see a lot of potential to reach or even surpass pre-pandemic levels,” Tan noted.
The AGI Group continues to expand its offerings in the hospitality sector. It plans to increase its total number of hotel room keys to around 12,000 in the next few years, from its 2023 capacity of around 7,500 keys.
It is also actively developing more locations for MICE (meetings, incentives, conferences, and exhibitions) activities throughout the country. It will be opening the P1.5 billion Mactan Expo Center located in Megaworld’s Mactan Newtown township in Cebu.
“We are doing all this because we truly believe that the country's tourism and leisure sector is an emerging bright spot for the Philippines. We want to maintain our market leadership in tourism in this sector and be a key participant in a significant growth potential,” said Tan.
He noted that “we expect all segments of our real estate business under Megaworld to see good growth this year, with the strongest topline improvement likely to come from our lifestyle malls and hotel operations, which are expected to sustain or improve occupancy rate as consumer discretionary spending remains very, very high.”
“Our residential segment should also continue to do well—benefiting from higher project completion and historically strong sales pickup. It is also important to note that Megaworld is among the biggest players in the luxury segment, a market largely unaffected by the economic slowdown," he said.
“It is for this reason that we expect our reservation sales this year to continue to grow, possibly hitting P145 billion as we provide the market with more exciting and curated product offerings through our townships all over the country," Tan added.
“We are also confident that our premium office segment will maintain its above industry occupancy rate and performance—bearing the resilience of the country's BPO sector and the resurgence of traditional office demand,” he also noted.
Meanwhile, Tan said McDonald's Philippines operator Golden Arches Development Corporation, which is a partnership with George Yang, is ramping up its expansion program. It plans to open 60 stores this year to sustain its record earnings.
“The majority of the planned stores will be located in areas outside Metro Manila, which has a lot of growth potential. In addition to expanding store network, McDonald's Philippines is also working to further enhance the taste quality and presentation of its products… to make sure that we remain relevant to the changing market and consumer demands,” he said.