New $100,000-a-Night Resort in the Philippines Faces Hurdles

Banwa Private Island in Palawan in the Philippines has abruptly closed after months of publicizing itself in many international publications as “the most expensive resort in the world” — $100,000 for a night’s stay.

According to a notification on its website, “Banwa Private Island will become wholly available for charter upon finalization of pending regulatory documentation, which is expected imminently.”

The posh resort island is being investigated by Philippine authorities for opening without the required government permits, such as an accreditation from the Department of Tourism (DOT).

A night’s stay at the private island costs $100,000, with a minimum of three nights, and can accommodate 48 persons. This includes meals, but not wines, plus activities and unlimited spa treatments. The rate excludes transfers, which can either be by private charter plane or helicopter from Manila or from Puerto Princesa, the capital of Palawan, according to the resort island’s website.

In a text message to Skift, DOT’s assistant secretary Maria Rica Bueno, who supervises tourism standards and regulations, said: “Banwa is still fixing their documentary requirements. An interagency inspection is being scheduled on July 8–9.”

Tightened Regulation

This means, aside from representatives from the DOT, officials from the Department of Interior and Local Government and Department of Environment and Natural Resources will also be on the inspection team. The three agencies form the core task force that had recommended the closure of Boracay Island, another popular beach destination in the Philippines, for six months in 2018 from April 26.

A ranking government source separately intimated that there were also issues with Banwa’s environment clearance certificate, another requirement under Philippine law, before a business of this nature is allowed to operate. The Environment Management Bureau did not respond to Skift’s queries as of press time.

Banwa Private Island and the Aquos Foundation, which owns it, have yet to respond to repeated emails to management and its representatives.

Manila has tightened regulations on the opening of hotels and resorts after indiscriminate building on Boracay Island was partially blamed as the cause of overtourism on the island, leading to environmental pollution. The task force has also been monitoring other island destinations in the country for possible pollution and easement issues. Among these are Panglao Island in Bohol, Siargao Island in Surigao del Norte, El Nido, and Coron in Palawan.

Negative Safety Perceptions

But even if it’s able to settle the regulatory hurdles, the island resort still faces the challenge of marketing to the luxury travel market given not only its eye-popping price tag but also poor safety and security perceptions that still haunt the Philippines.

Research by Amadeus, “Shaping the Future of Luxury Travel,” projects a 6.2 percent growth in luxury trips by 2025, faster than the projected 4.8 percent growth in overall travel.

North America and Western Europe, the paper noted, account for 64 percent of global luxury trips, despite making up only 18 percent of the world’s population. “This clear majority of the marketshare will continue over the next 10 years; the maturity of these luxury markets and the relative affluence of their populations explain this dominance,” the paper added.

These are the markets Banwa will largely be targeting: tourists from Europe, specifically Germany, Austria, Switzerland, and the United Kingdom, as well as the U.S. and in Asia, specifically China, Hong Kong, and Taiwan, according to its website.

But more than the ability of a traveler to pay for an exclusive and one-of-a-kind vacation experience in any part of the world, the Amadeus paper noted that “VIP privacy and security” is first on the hierarchy of needs of luxury travelers. In this regard Banwa could find some difficulty competing with other luxury travel destinations because the Philippines has been on the list of foreign governments with travel warnings.

Tourism Congress of the Philippines President Jose Clemente III, who frequently attends travel trade fairs in North America, Europe, and the Middle East, admits that peace-and-order questions about the country still come up on occasion from buyers.

“But I always tell them, ‘Look, there were four bombs in London, at Heathrow Airport, at the Waterloo station, and you’re asking me if it’s safe to go to the Philippines?’ I take exception to that,” said Clemente, who is also the owner of Rajah Tours Philippines.

Tough Market

Still, operating in the luxury resort segment in the Philippines remains tough. Industry sources acknowledged that even Palawan’s Amanpulo, considered the gold standard in luxury resorts not just in the Philippines but around the world, is finding it hard to sustain its prices or exclusivity and has opened itself up to a larger section of the country’s affluent class with local rates and packages. Its website shows a promotional rate of $1,900 per night, inclusive of chartered air service.

Amanpulo management refutes this, however, saying it is able to sustain prices and exclusivity.

“The $1,900 rate is not a promotional rate, rather it is a seasonal rate,” it said in a statement to Skift. “Year on year, Amanpulo has successfully sustained and even increased rates in line with the market.  We have maintained our loyal guest base and introduced Amanpulo to new global guests. The local resident rate was put into place many years ago and is available based on occupancy.  It is part of our standard rate tier.”

Another luxury resort, Two Seasons Coron Island Resort and Spa, also in Palawan, frequently offers discounted rooms on Deal Grocer, a coupon-based consumer experience service. A three-day, two-night stay at Two Seasons with transfers and half-board meals will set back a Deal Grocer customer by just $943, from now until March 2020.

Ultimately one wonders if Banwa can get its asking rate when other posh resorts in the Philippines are struggling.

This article has been updated to include a statement from Amanpulo that it has been able to sustain pricing and exclusivity.