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BSTM321 MERCED - CM 10seatwork1

1) Martha Soriano wants to start a new hotel business called Mayflower Hotel with two foreign friends to address the shortage of accommodations in Baguio City during their annual flower festival. 2) The business plan requires P20 million in total capitalization for a 50-room standard hotel. Martha can only raise P10 million herself. 3) Philippine law requires that at least 60% of capital in partnerships be owned by Philippine nationals. The advisor suggests Martha find another Philippine national to invest P2 million, allowing the two of them to meet the 60% requirement and allow the partnership with the foreign investors.

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Chatrina Merced
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4K views1 page

BSTM321 MERCED - CM 10seatwork1

1) Martha Soriano wants to start a new hotel business called Mayflower Hotel with two foreign friends to address the shortage of accommodations in Baguio City during their annual flower festival. 2) The business plan requires P20 million in total capitalization for a 50-room standard hotel. Martha can only raise P10 million herself. 3) Philippine law requires that at least 60% of capital in partnerships be owned by Philippine nationals. The advisor suggests Martha find another Philippine national to invest P2 million, allowing the two of them to meet the 60% requirement and allow the partnership with the foreign investors.

Uploaded by

Chatrina Merced
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Merced, Chatrina Mae M.

June 15, 2021


BS Tourism Management 321 Mrs. Emily Sanchez

10 Seatwork 1:
Case: Martha Soriano, A Baguio City-based retailer and caterer, noted the severe shortage of
hotel accommodations in the city, especially during the annual Panagbenga Flower Festival. She
invited some foreign friends, Arthur Hewitt, an American retiree, and Rose Ann Grundt, a German
hotelier, to join and invest in her new business venture- the Mayflower Hotel. Based on the
business plan prepared, the total capitalization needed for the 50-room standard hotel is Php20
million. Martha is only capable of raising half of the total investment needed. What advice would
you give Ms. Soriano as she forms a partnership with two (2) foreign partners?

Answer:
According to the rules and regulations to govern the accreditation of Travel and Tour Services,
partnerships organized under Philippine Laws, at least 60% of the capital must be owned and
held by a Philippine national. However, as Martha is only able to provide P10 million out of the
needed Php20 million capital, the partnership would not be possible. Martha would need at least
Php12 million to be able to invest in a hotel with her foreign friends. To be able to continue the
partnership for Mayflower Hotel, Martha could invite another Philippine national to invest P2
Million, in that way, two Philippine nationals would own 60% of the capital.

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