Operator: Good afternoon, everyone, and welcome to the nine months financial and operating results briefing of Megaworld Corporation for the year 2026. I am JC Nayran. I will be your host and moderator for today's session. Before we dive into the presentation proper, I would like to first introduce to you our distinguished panelists who will provide valuable insights and answer any queries you may have later on. Joining us here today are Mr. Roland Tiongson, Head of Megaworld Premier Offices.
Roland Tiongson: Hello.
Operator: Mr. Francis Roxas, Head of Megaworld Global Offices.
Francis Roxas: Hi. Hello. Good afternoon.
Operator: Mr. Javi Hernandez, the new head of Megaworld Lifestyle Malls. Mr. Sonny Alvaro,
Javi Hernandez: Good morning.
Operator: newly appointed Managing Director of Megaworld Hotels and Resorts.
Sonny Alvaro: Good afternoon. Thank you.
Operator: Ms. Anna Vergara, newly appointed managing director of Megaworld Global Hospitality.
Anna Vergara: Good afternoon, everyone.
Operator: Mr. Andy Dela Cruz, head of Group Investor Relations and Capital Markets.
Andy Dela Cruz: Hi, everyone.
Operator: And Mr. Jeffrey Lucero, Investor Relations Officer of Megaworld Corporation and our presenter for today's session.
Jeffrey Lucero: Good afternoon.
Operator: We encourage everyone to actively participate in today's briefing. Questions will be addressed right after the presentation, and you may either use the raise-hand option or type your questions into the Q&A box. At this juncture, I will now turn the floor over to Sir Jeff, who will walk us through the company's performance for the nine months of 2026.
Jeffrey Lucero: Thank you, Carl, for the introduction. Good afternoon again, everyone. Welcome to Megaworld's nine-month 2026 analyst briefing. Let's start with Megaworld's financial performance. Nine-month 2026 revenues improved 3% year-on-year on the back of strong recurring revenue expansion and stable real estate revenue bookings. Notably, residential gross profit margin is up 300 basis points to 54%, driven by a more premium sales mix. Our core net profit, which strips out non-core FX gains or losses, maintained its double-digit growth trajectory, growing by 10% year-on-year to PHP 17.5 billion on the back of top-line growth and margin expansion. On a per-segment basis, real estate sales improved as we continued our development and construction cadence throughout the period and continued to deploy capital to advance our projects and meet our commitments to customers.
Jeffrey Lucero: Office rentals improved 7% year-on-year to PHP 11.87 billion on the back of our higher-than-market occupancy and maintained strong lease transactions during the period. Megaworld Lifestyle Malls recorded a 9% increase in rental revenues to PHP 5.5 billion, driven by high portfolio occupancy of 95% and a 10% rise in average daily tenant sales, reflecting sustained consumer activity across Megaworld's retail destinations. Megaworld's hospitality business, now under Megaworld Global Hotels and Resorts, remained its fastest-growing recurring income segments, with hotel revenues rising 12% year-on-year to PHP 4.6 billion. Our net debt-to-equity ratio further improved to only 0.24x. This is one of the lowest in the industry, as our balance sheet continues to be fortified by our capital recycling initiatives and on the back of stronger internal cash generation. Our book value now stands at over PHP 328 billion.
Jeffrey Lucero: Total debt is now well below PHP 100 billion, ending September at PHP 94.29 billion. Debt funding remains diversified, reflecting flexible funding access from both bank and capital markets, and our debt exposure is predominantly peso-denominated, limiting the foreign exchange risk. So far, we have spent PHP 39 billion in the nine months. This was primarily for project development, and this is well on track with our full-year target, whereas the land banking side of the CapEx remains selective and opportunistic in nature. Our share buyback program still has over PHP 1.7 billion in unutilized budget. This is available for deployment and support. As you know, this is simultaneous with the significant dividend growth we delivered last quarter. To recall, Megaworld's dividend per share jumped 25% to 11.73 centavos, totaling PHP 3.8 billion.
Jeffrey Lucero: Just operational updates, Megaworld has 37 townships all across the country, Sugartown being the newest, which was launched earlier this year. Deep-diving into real estate, our industry-leading real estate gross profit margins continue to expand even further to 54% in the nine-month period on the back of a more premium sales mix, disciplined pricing, and disciplined cost management. As a result, residential gross profit increased at a faster pace than residential revenue bookings, or by 7% to PHP 21.86 billion. 83% of residential revenue bookings come from the upper mid to high-end segments, where demand continues to be strong. Geographically, Metro Manila accounts for 66% of the bookings, anchoring earnings stability, while provincial markets continue to gain share. On reservation sales, nine-month 2026 reservation sales improved 9% to PHP 96.6 billion.
Jeffrey Lucero: Strong take-up was recorded from provincial projects, and provincial sales now account for almost half the total reservation sales figure. The nine-month 2026 reservation sales figure is tracking ahead, or already at 77% of our full-year PHP 125 billion target. Foreign buyers, meanwhile, accounted for 15% of the pre-sales this year. Launches totaled PHP 16 billion in the nine-month period, and as you know, launches were all provincial, reflecting Megaworld's pivot into these high-growth regional locations.
Jeffrey Lucero: These launches were also all, or 100%, in the upper mid to high-end segment. Moving on to office rentals, there you go. Office rentals grew 7% in the nine-month 2026 to PHP 11.87 billion. This reflects our continued strong leasing activity and our well-above-industry occupancy rate of 87%. Just to highlight, the Q3 office rental revenue of PHP 4.1 billion is up 10% year-on-year and 4% sequentially.
Jeffrey Lucero: Megaworld's tenant base continues to be anchored by global capability centers, or GCCs, and knowledge process outsourcing firms. These tenants perform knowledge-intensive, business-critical functions that are deeply embedded into enterprise operations and underpinning longer planning horizons and more stable requirements. As mentioned earlier, occupancy rate remained high at 87%, and weighted average lease expiry is also high at 3.58 years.
Jeffrey Lucero: Total office transactions reached 248,000 square meters, of which 149,000 square meters is from renewals. The renewal rate of expiring leases in 2026 now stands at almost 90%, reflecting the stickiness of our office tenants. New leases totaled almost 100,000 square meters, or 99,500 square meters, led by global capability centers, including BNP Paribas, which is a Paris-based Fortune Global 500 financial institution, which located in Uptown Eastgate its delivery center supporting global, corporate, and institutional banking businesses. Onto the malls.
Jeffrey Lucero: In the Q3 2026, mall rental revenue jumped 9% year-on-year, as well as 8% sequentially to PHP 1.93 billion, supported by the strong built-in demand from township residents, office workers, as well as visitors. Mall occupancy rate remained high at 95%. Average daily sales grew 10% year-on-year to PHP 142 million, driven by both organic same-store sales growth and new store openings.
Jeffrey Lucero: Average daily foot traffic, meanwhile, jumped 38% year-on-year to 376,000. This reflects very high levels of consumer activity despite the inflationary pressures. New store openings totaled approximately 36,000 square meters during the period. Among the notable openings include Pet Kingdom and The Petitive in Eastwood, as well as Starbucks in McKinley West. Fun fact, this Starbucks in McKinley West is the first pet-friendly Starbucks with a dedicated pet zone, providing a welcoming space for customers visiting with their furry companions. Onto hotels.
Jeffrey Lucero: Megaworld's hospitality business, now under Megaworld Global Hotels and Resorts, remained its fastest-growing recurring income segment, with hotel revenues rising 12% year-on-year to PHP 4.6 billion. Meanwhile, the slight ADR moderation reflects the contribution of recently opened hotels, which are still in the ramp-up phase, whereas the stabilized properties continue to perform well. Total hotel room keys stand at 7,348. For the full year of 2026, we are maintaining our PHP 55 billion CapEx target, and we are well on track so far in the nine months. On reservation sales, we are tracking ahead of the full-year target, already at PHP 96.6 billion in reservation sales so far in the nine month, which represents 77% of the full-year PHP 125 billion target.
Jeffrey Lucero: In terms of launches, there were pent-up launches in provincial areas, which were originally planned for the Q3 2026, that have just recently cleared necessary compliance and regulatory licenses and will be launched in this quarter instead. As you know, these are big targets, 2 million square meters of office space and 1 million square meters of retail space by 2030, along with 12,000 hotel room key target by 2032. For our key takeaways, residential sales remain strong, anchored by resilient demand in the upper mid to high-end segments. On office, tenant renewals and new leasing drove rental income growth and strengthened income visibility. On malls, high occupancy and rising tenant sales drove the growth in mall rental income. Whereas in hotels, our portfolio expansion boosted revenues, and the newly opened properties continued to ramp up operations.
Jeffrey Lucero: For our outlook, our strategically phased project launches and township expansion are expected to sustain residential demand amid evolving market conditions. Strong office tenant retention and new leasing opportunities are expected to support office occupancy and rental income stability. Meanwhile, mall tenant mix enhancements and strong consumer activity are expected to strengthen tenant performance and mall rental growth. On hotels, our targeted marketing and operating efficiencies are expected to gradually improve occupancy and profitability as newer hotels start to mature. Next slide, please. That is it for the briefing. Let me now turn the floor over to Carl, who will open the Q&A segment. Thank you.
Operator: Thank you, Sir Jeff, for such an insightful presentation. We will now proceed with our Q&A session. Again, you may ask your questions by either raising your virtual hand or typing them into the Q&A box. I am seeing a raised hand at the moment. We have here Jilline. Please go ahead.
[Analyst 1]: Hello. Good afternoon. Thanks, Carl, for acknowledging the raised hand. My first set of questions are actually housekeeping. Can you share how much the FX gains or losses in Q3 and nine months 2026, the unsold inventory value, and RFO mix, as well as unbooked revenues?
Jeffrey Lucero: Okay. Hi. Good afternoon, Jill. For your first question, in the nine months, that is PHP 1.26 billion. The second question was on the unsold residential inventory. That is PHP 114 billion, so less than 11 months worth of sales. A third of that is RFO. In terms of the unbooked reservation sales, that is at PHP 96 billion.
[Analyst 1]: Okay. Thank you for sharing those data. I think my second question is on the residential pre-sales.
Jeffrey Lucero: Yeah.
[Analyst 1]: You continue to outperform peers.
Jeffrey Lucero: Yeah.
[Analyst 1]: To what drivers do you attribute this relative outperformance, and do you think that this can continue going forward? What are the things that you think Megaworld is doing differently?
Jeffrey Lucero: Yeah. So, thank you for that question. Primarily, we are outperforming our peers because of our provincial pivot. So provincial sales now account for half of our pre-sales. Unlike in Metro Manila, there is no oversupply in these provincial areas where there is strong demand for high-quality residential properties within a township ecosystem. That product differentiation of our township-based offerings is also equally important in our outperformance, because when you invest in real estate, you are really looking at the total return perspective, which has two components. The first component is your rental yield, and the second component is the property price appreciation. In a high-interest rate environment, the first component or the rental yield is not that attractive because your risk-free rate and the yield of other investments are already higher than the rental yield, admittedly.
Jeffrey Lucero: Instead, that second component in your total return, which is the prospect for property price appreciation, is put on the spotlight. It is what is driving the real estate investment decision. As a township developer, I think we at Megaworld are most credible in delivering property price appreciation because we control the developments within the township. You can be sure that beside your condo, we will build a retail development, institutional use cases, offices, and what have you. This is something that standalone developers do not have because they have absolutely no control on what will be built beside their property. To summarize, it is those two things, our provincial pivot and our product differentiation because of our township-based offerings.
[Analyst 1]: Thank you for that, Jeff. Lastly for me, on office rental reversions, I understand in the past two quarters, there is some negative drag from Eastwood.
Jeffrey Lucero: Correct.
[Analyst 1]: How is that tracking along?
Jeffrey Lucero: Yeah
[Analyst 1]: To what drivers do you attribute the PHP 4.1 billion strong sequential growth in office revenues? Thank you.
Jeffrey Lucero: Yeah. On rental reversion, for the nine-month period, it is down mid-single digit, so negative rental reversion. But the Q3 rental reversion is already flat, and that is because there was already not much of these expiries that came from Eastwood. Bulk of the expiries that happened in Eastwood already happened in the H1 2026.
[Analyst 1]: That is clear. Thank you.
Operator: Thanks, Jolene. Next question will come from Carl. Carl, please go ahead.
[Analyst 2]: Good afternoon. Let me just ask if you can hear me.
Operator: Loud and clear, Carl.
[Analyst 2]: Thank you. I will ask first about residential margins. As you pointed out, residential gross profit margin went up nearly 3 percentage points, and you alluded to sales mix.
Jeffrey Lucero: Yeah.
[Analyst 2]: Could you tell us what are the projects that have higher margins? Is it determined more by location? Is it if it is RFO or the age of the project, or anything else?
Jeffrey Lucero: Well, it is largely two things, the higher-end segment and provincial projects. The provincial projects, we have higher margins, number one, because on the pricing side, on the revenue side, the prices are priced at Metro Manila prices, but the cost side, in the provincial projects, the cost of land is much lower, and the construction cost, that manpower side, is also much lower. So provincial tend to have higher margins. As the share of provincial sales grow, our margin will also tend to grow.
[Analyst 2]: Actually, let me ask about that. As of the 9 months, the residential revenue is only about one-third provincial, but your reservation sales are about nearly half provincial.
Jeffrey Lucero: Yeah.
[Analyst 2]: Does that mean we should expect over time the residential gross profit margin to go up?
Jeffrey Lucero: Yeah, on a like-for-like basis. If it is just as the sales mix tend to increase in provincial, the margins will go up. But I don't think it is fair to guide that just because of that, when these bookings come in, our margins will go up, because as you know, there is also the wage increases that is happening and what have you. But on a like-for-like basis, yes, that is the case.
[Analyst 2]: Understood. On the office segment this time, the office revenue went up sequentially nearly 5% quarter-on-quarter.
[Analyst 2]: But I believe the office occupancy rate is the same.
Jeffrey Lucero: Correct.
[Analyst 2]: I am not aware of you completing new office buildings. So, what caused this increase?
Jeffrey Lucero: Correct, Carl. The Q3 office rental revenues are up 10% year-on-year. The organic improvement from that is only about 8%. The organic improvement, number one, is driven by rental reversions that are now flat. Number two, as to the new leases, particularly those that were transacted within Uptown Bonifacio, were transacted at higher rates. The inorganic part of that is around 2%. That growth was from Horizon Center after the MREIT Wave 5 infusion. It brought it into the MREIT portfolio from Travellers. As you know, MREIT is consolidated into Megaworld, so that is a fresh revenue contribution from that.
[Analyst 2]: Understand. Okay. On the mall business this time, I think it was something similar. There was a sequential improvement or quarter-to-quarter improvement, even though occupancy looks the same, and I believe there is no increase in floor area.
Jeffrey Lucero: Yeah.
[Analyst 2]: Is it just stronger tenant sales, or is there something
Jeffrey Lucero: Yeah. Stronger tenant sales is part of it, and also part of the inorganic growth. Also around 2% is from the master lease of Holiday Inn Express that was transferred with Wave 5 of MREIT.
[Analyst 2]: Understand. Okay.
[Analyst 2]: That explains a lot.
Jeffrey Lucero: So, just to explain why it is not on the hotel side, because the master lease is on the building, not on the rooms. That is why the additional revenues came into the commercial rental revenues.
[Analyst 2]: Understand. Then, there have been some management changes on your mall and hotel businesses. I would like to ask new management, the new heads of the businesses, what their plans are, if there will be any changes going forward for those segments.
Jeffrey Lucero: Probably we can have this in order. Sir Javi, if you can go first for the mall divisions. Carl is asking plans or changes into the direction of the malls.
Javi Hernandez: Hi, Carl. Good afternoon, and good afternoon to everyone. In terms of changes, we are not going to see a lot of drastic changes. I have been here about 5 months, and actually, the success of Megaworld is because of everything that the existing team has done to achieve 95% occupancy where we stand today. I am just looking at maybe two things right now. Efficiencies that we can draw from the combined portfolio that we have of 25 centers throughout the country, as well as expand the network of tenants that we will be able to bring in to our centers, especially as we grow towards the provinces. So, efficiency and an expansion of network is what my priorities are right now.
Jeffrey Lucero: Thank you, Sir Javi. Probably we can have Sir Sonny next.
Sonny Alvaro: Thank you, Jeffrey. Hi. Good afternoon, Mr. Sy. 2 months into the role. I am not new to the organization. I am actually 5 years with Megaworld Hotels & Resorts, now Megaworld Global Hospitality and Resorts. Now, it is a continuation really in terms of being part of the executive team, now leading the group with my colleague, Anna Vergara. The priority really is to strengthen further the local brands, particularly the local brands, and consolidate further our position. We want to really build on 2027. We are seeing already a good demand for Q1, so I think this is an opportunity for us to work as a leadership team, position our brands well, and really ready to start 2027 strongly.
Jeffrey Lucero: Thank you. Probably if I can have also Ms. Anna.
Anna Vergara: Thank you, Jeffrey, and thank you for the question, Carl. I am probably the newest with Megaworld, just joined 5 October. But really exciting times coming for us, particularly for the Megaworld Global Hotels and Resorts, and I am covering the global hospitality part of MGHR. For us, really, what is coming is really the expansion of MGHR and really increasing the number of keys in the metro, plus outside Manila.
Anna Vergara: Basically, the priorities are, number 1, drive occupancy. As you heard earlier, there is really an opportunity for us to be able to drive occupancy. Right now, it is at 50%, and there is a lot of room there to grow occupancy, and that is through focusing on MICE and corporate business. As mentioned by Sonny, there are local brands that are existing now that are actually driving really performance, so we will be looking into that.
Anna Vergara: How we are going to do that is really through revenue management, yield optimization, and just making sure that we do not leave money on the table. Another thing that we would like to really push forward to would be on ensuring that as we open new hotels, that we are able to ramp up faster. There is obviously a lot of opportunity in Metro Manila and even outside Metro Manila to push and really be aggressive on marketing and really drive occupancy and be able to bring that business in faster.
Anna Vergara: We would like to also focus on ancillary businesses, not just rooms and food and beverage, but really on other services such as spa, could be transportation, could be anything that the hotels can actually focus on. While doing all this, we obviously will look into ensuring that we still focus on operational efficiency.
Anna Vergara: With the scale, we want to make sure that standards are in place, that all our hotels are actually looking at delivering what is committed in terms of service standards, and of course, ensuring that we maintain quality moving forward. With all these are obviously all the opportunities, all the focus that we will be putting into that will allow us to be more sustainable moving forward.
[Analyst 2]: Okay.
Anna Vergara: Thank you.
[Analyst 2]: Thank you. Yes, go ahead, Jeffrey.
Jeffrey Lucero: No, thank you, Ma'am Anna. Is that okay, Carl?
[Analyst 2]: Yes. Actually, I was going to say thanks for all of that. Those are all my questions.
Jeffrey Lucero: Okay. Thank you, Carl.
Operator: Thank you, Carl, for those questions. Are there any participants who would like to ask their questions live? You may still use the raise hand option. Okay, so we have a question here for office. With the addition of multinational tenants such as BNP Paribas, how does Megaworld see demand from global occupiers evolving? What key factors make Megaworld's office developments attractive to Fortune 500 companies?
Jeffrey Lucero: Probably for this, we can call Sir Roland.
Operator: Sorry, Sir Francis na lang for this.
Francis Roxas: Well, for the GCCs especially, and for all the other BPOs for that matter, the complete township experience is still one of the most important considerations, especially for, as I mentioned earlier, for the global capability centers. The other types of business process outsourcing companies are more sensitive to things like price. But for global capability centers, it is a combination of quality, price, and the complete township experience. Megaworld is uniquely positioned as one of the few developers with, number 1, a real township platform. I think a lot of the other developers, most of the other developers do not have as comprehensive a township platform as Megaworld does. The second is the distribution of the townships of Megaworld. I think it has probably the broadest distribution throughout the country.
Francis Roxas: This will allow tenants who are looking for a single landlord, for ease in relationship building, to partner with. Megaworld, I think, is uniquely positioned in this aspect.
Operator: Thank you, Sir Roland. Sir Francis. Thank you, Sir Francis. Still on office, we have a question here. For the new office leases, which occupiers are driving demand? Are these new entrants, business expansion, or relocations?
Roland Tiongson: I think-
Operator: Okay.
Roland Tiongson: Well, as already mentioned earlier during the presentation, a lot of entrants were from global capability centers, or GCCs, and also from knowledge-based occupiers. It is really a mix of relocations, expansions, and new entrants. But the biggest, I think, that we experienced came from expansions. Did I answer everything, Carl?
Operator: Yes, sir. Thank you, Sir Roland.
Roland Tiongson: Okay. Thank you.
Operator: Okay. So, we have a question here from Isabel for the residential segment. Which particular projects and locations is driving the reservation sales for the year?
Jeffrey Lucero: Hi, Isabel. On the provincial side, there is strength in the Batangas area, Pampanga, Boracay, Palawan, and Ilocos. On the Metro Manila side, and particularly the RFO part of reservation sales, the McKinley West projects and McKinley Hill as well.
Operator: Thank you, Sir Jeff. Still from Isabel, what is the average backout rate for the residential segment?
Francis Roxas: Okay, so the cancellation rate, which is for aged accounts, is less than 5%. But if you are talking about the backout rate as in from the reservation fee, that is somewhere around 15% to 20%, which is normal and has not grown. There is no movement from it in the past few quarters.
Operator: Thank you, Sir Jeff. We have a question here for malls. What are the key drivers behind the double-digit growth in malls' average daily sales despite persistent inflationary pressures?
Javi Hernandez: Okay. Thanks for the question. Average daily sales grew by 10%, and we are actually pretty happy with the mix of that. Now, it is coming from both new store openings and same-store sales. So, on the increment, 75% of that increment came in from new stores, and then there is a healthy 25% coming from same-store sales growth. We did introduce two properties this year as compared to last year. Those are about 35,000 square meters in Shops at McKinley West and the Imperial Wing of Lucky Chinatown. So, new stores, 75%, same-store sales, 25% on the incremental average daily sales growth.
Operator: Thank you, Sir Javi. Still for malls, we have a question here. What adjustments has Megaworld made to its strategy to capitalize on the holiday season, given the ongoing super El Niño and inflationary pressures?
Javi Hernandez: Okay. On super El Niño, we are actually expecting a stronger surge of foot traffic because, as we know, a lot of people come to the malls when it is very hot outside to loiter, or in Tagalog, maraming magpapalamig. Conventional wisdom tells us that high heat index drives people to air-conditioned malls, so we take advantage of that because we are sure that beverage sales will go up, dessert sales will go up, ice cream, halo-halo, your mix of milk teas, and things like that will all increase. So us, together with our tenants, like Blood RX System, will prepare accordingly for that to make sure the malls are comfortable, they are cold, the bathrooms are clean, and cool drinks and cool desserts and cool beverages will be ready for them to take advantage of.
Operator: Thank you, Sir Javi. Okay. So, I am seeing a question here for hotels. What demand opportunities do you see over the year-end holiday period and into early 2027, and how are you positioning the hotels to capture them?
Sonny Alvaro: Okay. I can take that question, or we can share it between myself and Anna. Well, I think the simplest way is to categorize firstly where the demand is coming from. The first one really is distribution. So distribution is, this is through our online channels, the various online channels that you see, Booking.com, Agoda, and so on. The other one is what we would call sales.
Sonny Alvaro: Sales are where it is dealt with and handled by our sales team on property. So that ranges from festive bookings, individual bookings, to groups and banquets. In terms of positioning for this demand, we have actually already issued all our promotions out onto the market to the public from the beginning of the month, and this has gone out on all our properties. We are seeing a demand particularly for the festive period for our city and destination properties.
Sonny Alvaro: In terms of distribution, we have already activated various promotions with our major partners, and the booking windows for that are normally 60 to 90 days. So we are seeing a demand, I mentioned earlier, for Q1, which is very encouraging. So the various packages and promotion, that is a combination of domestic market and international market. So we really want to capitalize on closing the year strongly, and at the same time entering 2027 with a strong base that will allow us to yield and maximize our revenue further. Anna, if you want to add anything to that.
Anna Vergara: No, I think pretty much covered, Sonny. Thank you. Maybe just to add on that, last quarter of this year really is an opportunity for us to really push big time and end the year strong, particularly on domestic or leisure market. As we know, the ber months for us is obviously a lot of celebrations, so all hotels will be gearing towards ensuring that we are able to provide a good place for both food and beverage and even accommodations for both domestic and also our balikbayan. Second is government businesses as well. ASEAN is obviously a big one that we are going to have in the next few days. But there are pre and post-government opportunities that we can capitalize on before the year ends, just to make sure that we are able to maximize that as well.
Anna Vergara: For food and beverage, again, it is a celebration up until the end of the year, so we would like to be a venue for all these celebrations. For next year, we should be able to capture a lot of sales conferences, strategy plans, and all that, kick off of both consumer and corporate clients, because as we know, as we kick off a new year, all establishments, companies, and all our partners would have to have all those meetings between them, amongst them, in order for them to be able to also kick off their businesses. So, the hotels would obviously capitalize on that and ensure that we start strong in Q1 and capitalize on all these things.
Operator: Thank you, Ms. Anna and Sir Sonny. Are there any participants who would like to ask their questions? We have a question here from Luis on hotels. Could you comment on the tepid tourism data and how this impacts the aggressive build-out in the hospitality segment? If international visitation does not materially improve, does the sector risk having overcapacity as new supply comes online in the next few years?
Anna Vergara: I can start with that, Sonny.
Sonny Alvaro: Sure.
Anna Vergara: If okay? Yeah. Okay. For tourism arrivals, we obviously have a long way to go. I am pretty sure you have received some statistics. I just do not have the exact statistics that is updated. But the good thing about hotels now and the industry for that matter is we are heavy on domestic business, which is obviously, I think, more sustainable for a lot of hotels. This has brought a little more stability that is more sustainable for hotels moving forward. We obviously will be focusing and ensuring that we deliver based on what the domestic market would demand from the hotels and ensure that we capitalize on that. We mentioned about ancillary business earlier, and instead of domestic market trying to travel abroad and experience, we actually offer staycation packages that will address all these needs as well.
Anna Vergara: Capitalize again on that and make sure that we deliver based on basically what we can add as additional experiences for our clients. Anything else to add, Sonny?
Sonny Alvaro: Just really pretty much on the same point. Definitely domestic is a strong market, but we haven't overlooked the international market because in the past, we've worked traditionally with certain countries, China, for example, Japan, Korea. But the last 12 months, we've been developing new markets that we can work with, countries like India, for example. We're looking to develop that.
Sonny Alvaro: And within the Philippines, business from the south, from the BARMM region, we found from our recent travels there's a lot of interest that in the past perhaps they have not really been explored. We don't want to put all our eggs in one basket, as it were. We will continue to explore these markets, but at the same time, as we mentioned earlier, we want to strengthen our position as the largest homegrown brand, but also to take the maximum share within the market.
Sonny Alvaro: As Anna mentioned, there's still a capacity for the Philippines as a destination. If we compare ourselves to other Southeast Asian countries, definitely, if you look at it positively, there's a lot more scope for us to grow. But of course, all the stakeholders need to play their part, right? Not just the hotels. This includes our partnership with Department of Tourism and all the other stakeholders to make sure that we maximize those arrivals. We continue to work on new opportunities as we move forward.
Operator: Thank you, Sir Sonny and Ms. Anna. Are there any participants who would like to ask their questions? You may still use the raise hand option or type your questions in the Q&A box. It seems that we have addressed all the questions for today's session. Of course, before we end, we wouldn't want to end today's session without sharing something special. To give us more details about an evening we've all been looking forward to, I'll turn the floor over once again to Sir Jeff.
Jeffrey Lucero: Thank you, Carl. Hi, everyone again. Before we close, there it shows on the screen. Allow me to invite everyone to our Partners' Night. This is happening on 2 December, 6:00PM onwards at the Sonata Lounge in Newport World Resorts. We'll be sending the invite. There. We prepared the mood for you. That's the kind of mood that we'll be expecting at Sonata Lounge. I hope everyone can join. We'll be sending the invite right after the briefing. Please feel free to coordinate with anyone of us from Inventure or Ladyone. Looking forward to seeing everyone here. Thank you, and God bless everyone.
Operator: Thank you, Sir Jeff. As we wrap up, we'd like to express our sincerest gratitude to everyone who take their time of this day to join us in this briefing. If you have any questions, please feel free to send it to us by email. Goodbye, everyone, and we hope to see you again on our next one.
Jeffrey Lucero: Thank you. Thank you, everyone.
Anna Vergara: Thank you.
Sonny Alvaro: Thank you.
