Metro Manila hotels boost room takeup to 47% in H1

MANILA, Philippines — Occupancy in Metro Manila’s hotel market continued to improve in the first half of the year, driven by the rebound in foreign arrivals, staycations, as well as gradual return of business travel.

In its latest hotel property market report, Colliers said Metro Manila average hotel occupancy reached 47 percent from January to June, higher than the 44 percent occupancy in the same period last year.

“We attribute the improvement to the gradual return of business travel especially among investors conducting due diligence; local guests’ growing propensity to spend on leisure, likely supported by a rise in demand from the staycation market in April to June; and a slight rebound in foreign arrivals due to relaxation of entry restriction,” Colliers said.

Colliers cited data from the Department of Tourism (DOT) which showed that foreign arrivals surged to 814,144 as of the first half from 58,177 in the same period last year.

The uptick in foreign arrivals was due to the government’s continued easing of travel restrictions for foreigners starting Feb. 10 including the dropping of the Covid-19 test requirement prior to entering the country.

Colliers said a sustained recovery in international travel would become more apparent in the second half which will provide a solid base for 2023 and beyond.

It expects leisure travel to lead recovery, followed by business and meetings, incentives, conventions and exhibitions (MICE) groups.

Meanwhile, Colliers projects Metro Manila hotel occupancy to hover above 50 percent by the end of 2022, supported by holiday-induced spending and the return of Filipinos working abroad.

“The Philippines is starting to lure tourists back to its shores. We are seeing a rise in foreign arrivals while improving consumer confidence is propelling the domestic market. Higher-than-expected economic growth in Q1 2022 and further easing of travel restrictions should support the sector’s recovery beyond 2022,” Colliers Philippines associate director for research Joey Roi Bondoc said.

“However, hotel operators should be mindful of the offsetting impacts of rising inflation and peso depreciation,” he said.

Colliers reported that average daily rates (ADRs) of hotels also increased by 5.4 percent in the first half to $66.

This is higher than the four percent growth registered in the first half of 2021.

From 2020 to 2021, Colliers said ADRs saw a cumulative drop of about 20 percent compared to pre-Covid levels.

“In 2022, we project ADRs to grow by eight percent supported by growth in foreign arrivals and expansion of the domestic market,” Colliers said.