A PROPERTY research firm advised local developers to increase their tourism investments, particularly in key provinces in the country, following the anticipated boom in tourism this year.
In 2022, the country posted 2.65 million tourists, way higher than its target of 1.7 million. Tourism revenues reached P209 billion (US$3.8 billion) in 2022, up 2,466 percent year-on-year.
Of the total tourist arrivals, 2.02 million were foreigners while 628,445 were returning Filipinos. The United States accounted for about 19 percent of total arrivals, followed by South Korea (16 percent), Australia (five percent) and Canada (four percent).
In 2023, the Department of Tourism (DOT) expects tourist arrivals to reach 4.8 million.
“Colliers recommends that developers consider building more hotels in key provinces, especially with the construction and modernization of regional airports,” Colliers said in its latest market update.
“Developers may also opt to infuse hotel assets in their Real Estate Investment Trust (REIT) portfolios and use its proceeds to expand their hotel footprint in the country,” it added.
A REIT is a stock corporation established principally for the purpose of owning income-generating real estate assets such as apartment buildings, office buildings, medical facilities, hospitals, hotels, resorts, highways, warehouses, shopping centers and railroads, among others. It is a type of investment instrument that provides a return to investors derived from rental income of the underlying real estate asset.
In the second half of 2022, the average hotel occupancy in Metro Manila, for instance, reached 55 percent from 44 percent in the first six months of the year due to holiday spending and the return of Filipinos working abroad.
Cebu, on the other hand, is catching up as direct local and international flights resume operations.
“2023 is a very promising year for all of us. I am quite optimistic that we will be experiencing full recovery of our tourism industry, with more foreign tourists coming in from Korea, Japan and even China,” said Ray Go Manigsaca, president and chief executive officer of AppleOne Properties, the developer behind the Sheraton Cebu Mactan Resort and The Residences at Sheraton Cebu Mactan Resort.
“Though we are far from the pre-pandemic numbers, it is a promising time for the hospitality industry and we only see it continuing to go up next year as more and more people become confident and comfortable to travel again,” he said.
“In our view, DOT’s initiatives to lure more foreign tourists will likely buoy recovery in the leisure sector,” noted Colliers, given that the agency has firmed up tourism deals with China, Italy, United Kingdom and Saudi Arabia which included the promotion of Philippine dive sites and restoration of direct flights.
It also sees Cebu hotels and resorts cornering pent up demand due primarily to revenge travel.
“We see Cebu retaining its stature as a key business and leisure destination. The revival of meetings, incentives, conventions and exhibitions activities and in-person events should help propel hotel occupancies and average daily rates in Cebu over the next 12 months,” the firm said.
Colliers also noted that now is an opportune time for developers to consider bringing in foreign hotel brands. Hotel operators should also continue to innovate their services and tap technology in enhancing customer experience.