Sofitel Confirms Closure and Cease of Operations

(UPDATED, May 10, 3:30 p.m.) Rumors broke out on Thursday (May 9) that Sofitel Philippine Plaza Manila is reportedly shutting down by the end of next month. Hotel staff was reportedly informed about the closure on June 30. 

Sofitel Philippine Plaza Manila still has 17 years on its lease contract with the Government Service Insurance System (GSIS), which owns the land where the hotel stands. In the second and third quarters of 2023, both Philippine Plaza Holdings Inc. (owner of Sofitel) and Accor (manager of Sofitel) confirmed that the luxury hotel is in the pipeline for major rehabilitation. In June 2023, Sofitel also expanded its lease contract under GSIS to add two more lots adjacent to the main building.

Sofitel's Reported Closure

According to sources that Esquire Philippines talked to, the hotel will temporarily close for major renovations. The sources, who are former employees of the hotel that declined to be identified because they're not authorized to speak on the matter, said the hotel is slated to close "for up to 18 months."

But the official statement from Sofitel released to Esquire Philippines on Friday afternoon (May 10) said:

"Built in the 1973 era and opened without interruption since 1976, the hotel has announced that it will close and cease operations starting July 1, 2024. This decision comes as part of our ongoing commitment to providing our guests and colleagues with the best possible experience. The hotel will honor engagements and reservations until the end of June and close its iconic doors thereafter.

Sofitel Philippine Plaza Manila had a long legacy as the hotel of choice for almost five decades for heads of states, celebrities and global corporations alike, and it has been home to celebrations and milestones of our beloved patrons and clients. We are deeply grateful for the unwavering support and patronage of our stakeholders, employees, and guests who have been instrumental in this long journey."

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Lease Under GSIS and the Manila Bay Reclamation

An Inquirer report in June 2023 said that Philippine Plaza Holdings Inc. (PPHI), owner of Sofitel Philippine Plaza Manila, asked the state-run pension fund Government Service Insurance System (GSIS) to extend the hotel's lease period, which is until June 26, 2041. This would allow the hotel to recover its investment of P3 billion to P4 billion to refurbish the hotel, which, according to Sy, needs significant rehabilitation.

"The hotel is almost 50 years old. A lot of retouching needs to be done. We are planning to change even the pipes, cooling system, boiler; change all the windows in the building because the aircon is leaking out and wasting a lot of energy; beautify the hotel to keep the hotel competitive after the reclamation; replace elevators, recondition escalators," PPHI president Esteban Pena Sy said in the PDI report.

In June 2023, both parties announced an amendment to their existing contract of lease. The initial agreement has been expanded to include Lots 19 and 41 in the lease, which effectively treats both lots along with the original building land site as one indivisible unit. All alterations and improvements to the whole unit now require prior written consent from GSIS. At the end of the lease period or in case of earlier cancelation, all permanent improvements will transfer to GSIS.

"Sofitel hotel’s success is intrinsically linked to GSIS, as its income will be drawn from the hotel’s revenue. By safeguarding GSIS’s assets and generating income from these, we can assure our members and pensioners that their benefits will be provided when due," GSIS President and General Manager Wick Veloso said in a press statement published on the GSIS website.

International hospitality chain Accor, which manages Sofitel Philippine Plaza Manila, echoed the hotel's plans for rehabilitation through a report by BusinessMirror in August 2023.

"Sofitel Philippine Plaza Manila has become a cornerstone of the country’s capital since it first opened its doors in 1976. Throughout the years, the hotel has continuously adapted to the ever-changing landscape of Manila. The hotel remains committed to working alongside the local authorities to ensure that minimize any disruptions to the guests whilst the reclamation project takes place."

"We look forward to the future and adapting to the opportunities that the city’s expansion will bring. Sofitel Philippine Plaza Manila is dedicated to improving the guests’ experience by implementing several enhancement projects over the next 12 months. Accor has a longstanding relationship with the owning company of Sofitel Philippine Plaza Manila that we look forward to continuing into the future."

Accor's previous statement comes after photos and videos of the continuous land reclamation behind Sofitel surfaced. The luxury hotel is known for its unparalleled view of Manila Bay, especially during sunset.

BusinessMirror reported on May 10, 2024, that the PPHI has just written GSIS "this week" requesting for an extension on its lease contract. BusinessMirror's "high-ranking government source" added that the pension fund wants to rethink the lease terms "to benefit the government."

About Sofitel Philippine Plaza Manila

Sofitel Philippine Plaza Manila, originally built as the Philippine Plaza, was designed by Leandro Locsin. It officially opened on September 26, 1976, in time for the 1976 Annual Meetings of the International Monetary Fund and the World Bank in Manila. It was initially managed by Westin Hotel Company, which facilitated renovations of the hotel in 1994 and 1995. The management contract was turned over to AccorHotels in 2006, and extensive renovation works followed, as well as the hotel's rebranding as Sofitel Philippine Plaza Manila.

Sofitel is situated beside the Cultural Center of the Philippines Complex. Its proximity to major attractions and commercial hubs, including the Mall of Asia and Makati City, adds to its appeal.

Accommodations at Sofitel Philippine Plaza Manila are designed to provide the utmost comfort and luxury. Each room features a private balcony, where guests can enjoy serene views of the surroundings.

Sofitel is also known for its flagship restaurant, Spiral. It is particularly notable for its 21 dining ateliers, which offer a gastronomic tour of the world with dishes prepared right before the guests. This interactive dining experience is complemented by the hotel’s other dining venues, including Le Veranda and Sunset Bar, which provide perfect settings for sipping a drink while watching the sunset.

Then, there's the hotel's lagoon-shaped outdoor pool as well as an expansive backyard that contributes to its reputation as an oasis in the city.

This article has been edited to include Sofitel's official statement sent to Esquire Philippines on May 10, 3:22 p.m.