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MANILA, Philippines — Foreign hotel brands are likely to make up the majority of new supply in the Metro Manila hospitality sector as new infrastructure continues to entice investors despite the drop in tourist arrivals.
Real estate broker Colliers Philippines last week reported that foreign-branded hotels would likely account for 56 percent of new room supply from 2025 to 2027. This is an improvement from its previous projection of 42 percent.
“We are seeing a relentless expansion of foreign hospitality brands in the Philippines,” Colliers research head Joey Bondoc said in their report.
“The travel and tourism sector has tremendous potential given the projected rise in arrivals and modernization of airports across the country,” Bondoc added.
Among the upcoming hotels are Ascott DD Meridian Park, Dusit Greenhills Manila, Mandarin Oriental, Canopy by Hilton, and Moxy Hotels Circuit.
This, despite the drop in foreign tourist arrivals in the first five months of the year.
Data from the Department of Tourism (DOT) show that foreign tourist arrivals reached 2.54 million in January to May, down 1.2 percent from the same period last year.
Because of this pace, Colliers said the Philippines was unlikely to breach the 7.7 million government target this year.
The drop is attributed to a 19-percent slip in the number of South Korean tourist arrivals to around 553,000. Tourists from South Korea remained the top source of arrivals, followed by the United States, Japan and China.
Still, the DOT noted domestic tourism expenditure grew by 16.4 percent to P3.1 trillion last year.
Local tourism
The decline in foreign tourist arrivals also did not put a dent in hotel occupancy across Metro Manila as domestic tourism did the heavy lifting.
Colliers said average hotel occupancy during the first semester in the capital region was stable at 64 percent.
“We attribute this to the popularity of in-person events, which help offset the decline in international tourists,” Colliers said, referring to high demand for meetings, incentives, conferences, and exhibition facilities.
With international arrivals still not at prepandemic levels, full-year occupancy is seen to end at between 60 and 65 percent.
Apart from subdued foreign tourist arrivals, Colliers also noted a slowdown in room completion. For the entire year, Colliers projects the completion of 1,100 rooms, down from its previous estimate of 2,700 rooms because of construction delays.
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Upcoming hotel completions include Somerset Valero Makati (176 rooms), Alino Hotel New Manila (128 rooms), AC Hotel Ortigas (150 rooms), Vibe Hotel Alabang (144 rooms), Seda Hotel Arca South (265 rooms), and Copeton Baysuites (140 rooms).
