Study: Hospitality sector grows as foreign and local tourists embark on travel again

TOURISM is back on its feet again as the country begins to welcome new foreign tourists again, and domestic travelers are getting out and exploring different places again after being stuck at home due to lockdowns for the past two years, resulting in hotel occupancy and recreation spending nationwide.

According to the latest report from Colliers Hospitality Insights, hotel occupancy in Metro Manila averaged 47% in the first half of 2022, compared to 44% in the second quarter of 2021.

Average daily rates (ADR), on the other hand, increased by 5.4% compared to 4% during the two periods under review.

“The Philippines is starting to attract tourists to its shores. We are seeing an increase in foreign arrivals as improved consumer confidence propels the domestic market,” Colliers Philippines Associate Director for Research Joey Roi Bondoc said during their webinar on Thursday.

Citing data from the Department of Tourism (DOT), he disclosed that foreign arrivals had reached 814,144 from January to June this year, representing a whopping 1,299% increase from the 58,177 international tourists recorded there. one year old.

The growth in foreign arrivals could be attributed to easing travel restrictions for foreigners from February 10, including the removal of the Covid-19 testing requirement before entering the country.

This surge in tourism in the country was also due to the gradual return of business travel, especially among investors carrying out due diligence.

The growing propensity of local guests to spend on leisure likely supported strong demand in the April-June holiday market.

The boom in metro tourism, according to the Colliers study, has been well managed by robust accommodation supply, with the delivery of 834 new rooms added to the total inventory in the first six months of this year. , following the expansion of the Kabayan Hotel (307 rooms) in Pasay City, Lime Resort Manila (305 rooms) and the opening of Hop Inn in Ortigas CBD (231 rooms).

As the DOT expects foreign arrivals to reach 2 million by the end of 2022 from 163,879 last year, the hotel sector’s recovery will be sustained in the second half of the year, providing a solid foundation for 2023 and beyond. -of the.

For this reason, the professional services and investment management firm expects occupancy to top the 50% mark by the end of the year thanks to holiday-induced spending and the return of Filipino workers to work. foreign.

Colliers also expects ADRs to grow 8% for the full year, supported by growing foreign arrivals and expanding domestic market.

This could be supported by around 1,830 rooms coming online by the end of 2022, as Red Planet Hotel The Fort (245 rooms) and Lansons Place Hotel (250 rooms) are among the hotels that will soon be completed. .

With revenge travel continuing, average room completions are estimated at 2,650 per year through 2024, with the Bay Area and Quezon City accounting for over 60% of new supply, including the upcoming opening of foreign-branded hotels, namely, Ibis, Pullman, Lansons Place, Westin and Mandarin Oriental.

“Higher-than-expected economic growth in Q1 [first quarter of] 2022 and further easing of travel restrictions should support the recovery of the sector beyond 2022. However, hoteliers should be aware of the offsetting effects of rising inflation and peso depreciation,” Bondoc said.

He also advised them and other stakeholders to prepare for the gradual resumption of MICE events or meetings, incentives, conferences and exhibitions; create flexible packages for business and leisure travellers; and leveraging public and private sector efforts to attract foreign tourists, while improving the country’s tourism infrastructure such as airports and highways.

Peter M. Doran