Philippines hotel sector attractive for investments in 2019

MANILA, Philippines — The Philippine hospitality sector is among markets in the Asia-Pacific region seen as attractive to investors this year, driven by the robust growth of the tourism industry, a property services firm said.

“The overwhelming support for tourism that the Philippine government has demonstrated is expected to bring forth a tremendous positive effect on the growth of the real estate industry’s hospitality sector,” Jones Lang Lasalle (JLL) Philippines said in a statement.

“This, as JLL predicts that the region’s positive tourism numbers will continue to thrive in 2019, anchored on the strong fundamentals of the Asia-Pacific market,” it added.

JLL cited data from its report which showed that the Asia-Pacific region is the only region expecting growth in hotel transaction volumes, anticipating a total of $9.5 billion this year, a 15 percent rise from 2018.  

Last year, developers and private equity firms were the biggest buyers, acquiring more than half of all the properties traded.

“Building in 2018, investment momentum is expected to accelerate as investors look to sell assets and ride the anticipated tourist boom,” JLL said.

JLL said it expects that the most notable buyers in 2019 will be Pan-Asian private equity funds that raised capital last year, but have yet to deploy it.

“These investors are considering putting their money in countries like Japan whose hotel market has become enticing and will remain buoyed by the Rugby World Cup and the Tokyo Olympics; Japan has already seen an 8.7 percent growth in tourism year-on-year,” JLL said, adding that Singapore’s growing hotel market and China’s influx of tourists are other attractive markets in the region.

“The growth of the tourism industry in these countries has also incited international and domestic investors to take notice of other Asian neighbors, including the Philippines,” JLL said.

In 2018, international tourist arrivals in the Philippines grew 7.7 percent to 7.1 million.

For this year, the Department of Tourism (DOT) is targeting foreign arrivals to reach 8.2 million.

“Capitalizing on the positive global tourism projections for 2019, the Philippine government has high hopes in increasing tourist influx as they recently inaugurated the Bohol-Panglao International Airport and the Terminal 2 of Mactan-Cebu International Airport; sought ways to expand the Clark International Airport; and, had the National Economic and Development Authority (NEDA) approve the proposed New Manila International Airport in Bulakan, Bulacan,” JLL said.

Apart from infrastructure, JLL said another major tourism endeavor is the continuous rehabilitation of Boracay and Manila Bay led by various national agencies working together to make sure that environmental compliance in tourism destinations all over the Philippines is maintained and monitored.

“These initiatives are aligned with the plans of the Department of Tourism (DOT) to relaunch the “It’s more fun in the Philippines” campaign and position the Philippines as one of the pioneering countries for sustainable tourism,” the property services firm said.