Hotel occupancy tops pre-pandemic levels in January

MANILA, Philippines — Hotels in the country remain optimistic of the industry’s performance this year as the average occupancy has already surpassed pre-pandemic levels, according to an official of the Hotel Sales and Marketing Association (HSMA).

“For the month of January, hotels are already hitting 80 percent occupancy. Pre-pandemic, it was 60 to 70 percent. It’s so much better now,” newly inducted HSMA president Loleth So said.

So attributed the higher occupancy to the strong domestic tourism market.

“Domestic tourism is very strong. Although inbound is starting to come in, it’s not as strong as pre-pandemic levels yet. But we’re hopeful,” So told reporters in an interview.

According to So, the domestic tourism market covers both leisure groups, such as those on staycations or family vacations, as well as the meetings, incentives, conventions and exhibitions (MICE) industry.

She said the average daily rates (ADRs) are also improving.

“I think it’s also good now because ADR is higher as compared to pre-pandemic because right now online business is also strong,” she added.

So explained that hotels are able to have a dynamic rate structure as bookings are now being done online.

“Depending on the influx of bookings, we can switch our prices right away, either higher or lower. So if the demand is not very strong, for example, traditionally hotels are not very strong Mondays and Tuesdays, then we bring down the rates,” So said.

“If the demand is high, we can bring it higher. That’s why I think with this dynamic rate structure, ADR is really going to go up because we’re able to adjust very fast,” she added.

Property services firm Colliers Philippines reported earlier a 14.1 percent increase in ADRs of hotels in Metro Manila in 2022, higher than its initial full-year projection of an eight percent growth.

The ADRs posted a cumulative drop of 20 percent from 2020 to 2021 due to the impact of the COVID-19 pandemic.

“Five-star hotels recorded the fastest growth in ADRs, indicating strong demand for top-tier hotels in key business hubs and the gradual return of business travelers and in-person corporate events,” Colliers said.

Data from Colliers showed that ADRs for five-star hotels stood at P11,148, a 33.3 percent increase from the P8,361 in the previous year.

Four-star hotels’ ADR registered at P5,229, a 10.4 percent increase from P4,738 in the year before, while three-star hotel ADRs posted a 2.3 percent increase to P3,559 from P3,480.

For this year, Colliers projects ADRs to grow by about six percent.

“This should be supported by pent-up demand from both domestic and foreign travel markets,” the property services firm said.