Philippine business conglomerate Alliance Global Group expects significant growth in its Manila operations over the next five years. With interests in real estate, gaming and food and beverage, Alliance plans to scale up operations to match the surge in tourism. That strategy could boost profits by 15 percent according to CEO Kevin Tan, who took over the top job when his billionaire father Andrew stepped aside in 2018.
Resorts World Manila, Alliance’s first gaming property, is expanding this year and the second resort will begin opening in 2021, Tan told Bloomberg News. Westside City, the group’s second casino resort in the capital city, will also boost the share of revenue from gaming by almost half to 20 percent in the same time period, he said.
“Fundamentally, the Philippine economy is quite strong and consumption is also quite high,” Tan said. “We will see a lot of our businesses thriving in this kind of environment.”
Consumer spending in the Asian country, which climbed more than 6 percent in the first quarter, accounts for more than 75 percent of an economy that could be one of Asia’s fastest-growing for 2019, according to estimates.
“Hitting double-digit earnings growth at each subsidiary and sustaining the recovery in its challenged units could put Alliance at par with larger conglomerates,” says Rachelle Cruz, analyst at AP Securities Inc. “Valuation-wise, Alliance trails the big boys as its units are yet to reach full potential.”
Alliance’s gaming subsidiary, Travellers International Hotel Group, a venture with Genting Hong Kong, is counting on new capacity to maintain earnings growth after a profit increase in 2018 that a three-year decline.
The rebound is good news for Travellers, which was the target of a June 2017 arson fire at Resorts World, an attack that left 38 people dead. The blaze cost the company about US$1 million.
“The next five years will be very exciting,” Tan said. “I am very confident about how well Travellers will do and how much contribution it will have to our overall top line. Westside will easily double our capacity.”
