CEBU will see over 5,000 new hotel rooms in the next five years, with the tourism boom continually driving demand for accommodation.
Based on estimates from property consultancy firm Santos Knight Frank, local developers account for about 53 percent of the total rooms expected to join Cebu’s ever growing hospitality industry.
Cebu City and Lapu-Lapu City have remained the preferred locations for hotel developments.
As of the first half of 2019, Metro Cebu registered over 12,400 hotel rooms with more than half of the supply situated in Cebu City. Lapu-Lapu City accounted for 30 percent of the supply. The three-star hotels were most common, making up 38 percent of the total supply. The four-star hotels followed at 27 percent.
“The existing supply situation and foreseen demand in Metro Cebu presented opportunities for hotel developers to introduce new supply,” said Santos Knight in a latest research note on Cebu’s hotel sector.
Megaworld Corp., Ayala Land Inc. and Udenna Corp. will contribute about half of the total upcoming hotel supply in the next three years, the property research firm said.
In Lapu-Lapu City, Megaworld’s Savoy Hotel Mactan will open approximately 547 rooms by the end of 2019. The company’s Mactan Newtown has four more luxury hotels in the pipeline, which includes Belmont Mactan.
In terms of average daily rates, Lapu-Lapu City has remained the highest, owing to its resort-type hotel complexes, ranging from P3,340 to P12,130 a night. Cebu City’s hotel rates have averaged from P1,490 to P6,660 a night while Mandaue City’s rates could range between P1,490 to P6,270 a night.
“The heightened competition in Metro Cebu forced hotel developers to revamp and reposition products by renovating buildings, adding more amenities and offering attractive promos,” Santos Knight noted.
Robinsons Land-owned Dusit Thani Mactan Cebu was recently added to Lapu-Lapu’s roster of international hotels.
The Thailand-based hotel chain is also set to bring its Asai brand to Cebu. Three are in the pipeline specifically in Lapu-Lapu, Oslob and Cebu IT Park, set to add an aggregate 700 rooms. The Oslob branch is the first to open in 2020.
Hotel, Resort and Restaurant Association of Cebu (Hrrac) president Carlo Suarez has remained bullish on visitor growth in 2019.
In the first half of 2019, Cebu’s major hotels enjoyed an average occupancy rate of 60 percent.
According to Suarez, the industry has been anticipating the entry of new global and local hotel players in Cebu.
He said the increasing traffic at Cebu’s international airport bodes well for business prospects in the hospitality sector, with a four to six percent growth projection for 2019.