No morning traffic, no coat-and-tie meetings, and definitely no office stress. Esteban Tajanlangit Jr owns a cruise ship called 7,107 Islands and proves that taking a break from the city can mean business.
While most CEOs do business from their leather office chairs, Tajanlangit does his sitting back on a lounge chair under blue skies. Aside from running a cruise ship, he also goes island-hopping around his 17 islands in Palawan.
Tajanlangit reveals how he mixes business with pleasure in this exclusive interview with China Business – Philippines.
What made you venture into this business? Why a cruise ship?
Anything that’s new is a challenge for me. [The ship serves a] double purpose. We bought 17 islands in Coron (Palawan). To develop those islands would take about three years from planning to construction. I planned to buy this boat to have an instant floating hotel. It’s advance marketing. While we’re developing the islands, people already [get to] see them.
How long have you been in this business?
I’m new in the business, but I’ve been planning this since 1997. There was no available boat then. In 2007, somebody made an offer in Thailand. I went there and we negotiated for a year then the owner brought the ship here.
How old was the ship when you acquired it?
It was built in Spain in 1968. But what’s nice about it is it’s European made and it has different steel quality. So we dry-docked it, looked at its hull; it was in 96% in good condition.
How long did it take you to renovate the ship?
Around 30 days. I just bought a new generator because when I bought [the ship], it was already renovated in Thailand. I changed the carpet in other rooms, changed the wood.
How much did you invest?
[Investment] reached over 200 million pesos (US$4.15 million). [We have a] 50 million peso (US$1.04 million) standby [fund for] the salary of the staff and parking cost. Parking in Manila is around 2.5 million pesos (US$51,933.40) [a year]. In Subic, they gave me an incentive: free parking, tax-free, and the water costs only one third [of what I pay] in Manila.
Who is your target market?
Filipinos. The foreigners are only add-ons. Filipinos, just to experience a cruise ship, have to fly to Singapore or the States. It is cheaper for them to take a cruise here. We made it really affordable. Our lowest price is 2,750 pesos (US$57.13), including transportation. That’s cheap. I mean, a roundtrip ticket to Boracay [would cost you] around 8,000 pesos (US$166.19).
How many crew members do you have?
We have almost 100. We get our staff in Manila, but we also have some who are based in Coron and other destinations. They also serve as tour guides.
What are your marketing strategies?
We have to reach corporations that will charter the boat for corporate meetings. This can also be a travel incentive for their employees. Right now, we don’t have any competition so we’re taking it slow.
How do you convince people that going on a cruise is better than, say, flying?
Well, number one, when you ride a cruise ship you’re already on vacation. [When you] fly, there are still a lot of hassles. Here, you’re relaxed. You also get to pass a lot of places. Unlike on a plane, you can only go to one destination. In a cruise ship you can have many destinations. Sometimes, in a day, we visit two islands.
With this cruise people can see the islands. And it’s better than the Mediterranean group of islands. But because we don’t have infrastructure people can’t go to these places. So with this cruise ship Filipinos will get to see [our islands]—and they’ll realize the Philippines is better than Hawaii.
How long before you turn a profit?
Around five years. But the purpose of the cruise ship is to promote our islands. It’s a real estate deal, actually. The money I lose here, I will gain on the island.
Do you have any plans of expanding your ship business?
I think we need one more ship. Dagdagan natin problema natin. Di ba pag may hangover ka you need another shot? (Let’s multiply our problems. Don’t you need another shot when you have a hangover?) Anyway, I’m trying to arrange [the purchase of] another ship within the year. At least two boats.
You really seem passionate about traveling.
Yes, I love nature. I don’t want to be in the office, I want to be under a coconut tree. I have convinced people to get into the resort business. It’s a good retirement business. And you get to enjoy yourself.
Why did you venture into real estate?
When I came to Boracay for the first time in 1969, the first question I asked my friend was “Magkano property dito?” (How much is a piece of property here?) I was 12 years old. But I already saw the land. I started in Boracay 25 years ago; a resort called Boracay Terraces. We bought Boracay Property Holdings and paid for the master plan in that area. It’s called a special economic zone. We’re tax-free. So now we’re trying to create another Boracay in Coron.
Do you think real estate is still a good investment?
Yes. What happened now is they invested in paper investment[s]. Many got burnt. In real estate it’s impossible to burn the land. And you’re still helping your country because you’re investing money in the Philippines. Tourism is still a sunshine industry. But in tourism, you need lots of players. Like in Boracay, there are a lot of resorts there. Everybody’s promoting their resort; at the same time, they promote the whole island.
If an investor is interested in real estate, how much capital would he need?
For resort development he can start with 50 million pesos (US$1.04 million). Then expand from there. They can invest as low as 1 million pesos (US$20,773.40) for the land. Buy 1,000 square meters, wait five years, [it would become] 5 million pesos (US$103,867). So you’ll have a 500% return in five years. That’s the real estate deal.
What’s your business philosophy?
Just be honest about what you’re promoting. No overselling of something that’s not true. Sometimes it’s better to undersell so you would have a bigger impact.
Print ed: 05/09