Not Over Yet: Here’s What the Owners of Sofitel are Doing to 'Save' the Hotel

Weeks after the closure of the Sofitel Philippine Plaza Hotel was announced, property owners are now saying they are looking at options to possibly reopen it in the future or, at least, manage the concerns of the employees who will soon be losing their jobs. 

According to Philippine Plaza Holdings Inc. (PPHI) President Esteban Peña Sy, the options include the pre-termination of their lease contract with the government or finding new investors.

 “There are many options,” Peña Sy said. “The foreign investors may decide to discuss with GSIS (Government Service Insurance System) for the pre-termination of the lease contract, the hotel owners may put in huge new investments if the lease term on the land is extended, or the present owners may find other interested investors to take over the lease contract.” 

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Peña Sy added that, while a group that operates hotel businesses overseas has expressed interest to invest in Manila, there are no serious discussions yet.

PPHI still has 17 years remaining on its lease contract with state pension fund GSIS, which owns the lot on which Sofitel Manila stands. The firm had earlier requested for an extension on its lease for another 25 years, after the current contract expires in 2041. 

“We need to find time to sit down [with GSIS] for discussions on future plans,” said Peña Sy. 

Union busting?

Meanwhile, Peña Sy also belied an accusation made by labor unions that owners are closing the hotel in order to dissolve said unions. Officers of the National Union of Workers in Hotel, Restaurant, and Allied Industries-Philippine Plaza Chapter (Nuwhrain-PPC) and the Philippine Plaza Supervisors Chapter (PPSC) made the claim during a news conference on June 3, saying it was a “blatant attempt of [PPHI] to bust the hotel’s unions under the pretense of closure and renovations.”

But Peña Sy said the claim was “absurd.”

“If the hotel wanted to bust the unions, it would have done so during the pandemic,” he said. “During the Covid days, we did not lay off any staff but continued to give them all their benefits, despite the fact that the hotel was losing money.”

Union leaders, however, insist that there were already renovations being made at the hotel specifically to address safety concerns, which they say would make the hotel’s closure unnecessary.

“The management cited safety concerns for the closure, as if this is a valid reason to terminate workers,” the union said. 

“In light of the closure, reopening will allow PPHI to make up for the billions spent on renovations,” the union added. “The reopening is further solidified by PPHI’s application to extend their lease [with GSIS] for another 25 years, past 2041. It is extremely doubtful that management has no plans, because they would not simply throw away their investments no time, money, and resources. Why terminate workers if the hotel will reopen?” 

But the hotel’s owners had earlier said that they had to evaluate whether it would be wise to invest in renovating the hotel, estimated to cost some $150 million (about P8.82 billion), unless its lease was extended for another 25 years, or until 2066.  

Reports say that GSIS has received PPHI’s request. “The Board and Management have yet to discuss PPHI’s proposal [on the extension of their lease contract],” a GSIS source has said. “This has to be studied very well and has to go through the GSIS businesses and functions.” 

Peña Sy also cited how strongly the hotel has performed recently, with average occupancy rate having reached 86 percent in the first quarter of the year. The hotel’s main dining outlet, the buffet restaurant Spiral, also continues to be a hit with diners. 

“The hotel owners have no reason to close the hotel at this golden period of time if not because of the safety concerns,” he said. 

Completed in 1976 in time for Manila’s hosting of the International Monetary Fund-World Bank meetings, the hotel by the bay has hosted numerous dignitaries and prominent personalities over the years, including former US President Barack Obama, former Japanese Emperor Akihito and his Empress Michiko, former US Secretary of State Madeleine Albright, and celebrities like Madonna, Erykah Badu, and many others.

PPHI is fully owned by Allied Kajima of Hong Kong, a 50-50 joint venture between the Allied Group of Hong Kong and the Kajima Group of Japan.