Fridays Boracay resort counts cost of 6-month closure
MANILA, Philippines – The owner and operator of 4-star Fridays Boracay Beach Resort expects to forego millions of pesos in revenues and lay off most of its staff due to the impending 6-month closure of top tourist draw Boracay.
Because of the "impulsive" decision to shut down the island for 6 months starting April 26, Boulevard Holdings Incorporated, parent firm of Fridays Holdings Incorporated, told the local bourse that around 60 of its 80 employees will be laid off and about P6.5 million in revenues per month will be foregone during the closure period.
"[Boulevard Holdings] and its people will be living on razor-thin earnings because of the close of our crown jewel," Mauro Badiola, Boulevard Holdings vice president for finance, said in a statement.
Badiola added that out of 80 employees earning P15,000 to P20,000 a month, only 15 to 20 employees will be transferred to the company's new hotel, Fridays Puerto Galera Beach Resort, which opened in December 2017.
"We lament and cry for what the other 60 employees with 12 years in average loyal service told us yesterday: They will go home to Roxas, Kalibo, and Iloilo, and raise vegetables and live off the plants at home until Boracay is reopened," he said.
Badiola also estimated monthly foregone revenues of P6.5 million from April to October this year, amounting to a total of P45.5 million. (READ: With Boracay closure, airlines and hotels scramble for 'interim plans')
Badiola said Fridays Boracay also stands to lose around P35 million from fixed costs and expenses to be incurred from utilities, maintenance, repairs, depreciation, personnel costs for engineering, housekeeping, accounting, as well as other general expenses.
Even before the 6-month closure starts on April 26, Fridays Boracay has lost almost P22 million in advanced deposit cancellations, mainly from guests in China and Germany. (READ: LIST: Planned developments in Boracay)
"This 6-month closure came suddenly and whimsically, without rigorous thinking," Badiola said.
He appealed to the government to allow non-violators like Fridays Boracay to operate sooner than October 26.
At the current market price of P120,000 per square meter, the value of 1.5-hectare Fridays Boracay is at P1.8 billion, without the value of the building.
To cushion the impact of the island's closure, Badiola said his firm is planning to ramp up sales at Fridays Puerto Galera.
"We are targeting an increase from barely P4 million in April to P10 million in May, P9 million in June, and P9.5 million each month until the high season in November," Badiola said.
But once Boracay reopens for business, Badiola said they are optimistic that it will result in stronger revenues, driven by higher average room rates and occupancy rates, as several resorts found non-compliant by the environment department are expected to be permanently shut down.
On Thursday, shares of Boulevard Holdings dipped by 1.64% to P0.062 each. – Rappler.com