The nightmare may be over for the real estate sector even as it continues to be cautiously optimistic with the whole country trekking what seems to be a strong economic recovery path coming out of the pandemic disruptions.
Office and commercial space demand is seeing a rebound, new families are starting to reconsider investing in a home, and even the hotel business is rising from its earlier stupor.
In case you missed it, the Makati Shangri-La is set to reopen next week after having filed for bankruptcy, laid off employees, and temporarily closed its doors in early 2021. As one of the newer (started operating in 1993) and more prestigious hotels in the country, less than a year without guests had brought it to its knees.
The new Mandarin Oriental Manila is due to open soon too, but while its closure is not related to the pandemic, its delayed opening is. The old Mandarin was torn down after closing in 2014, and in its stead is a luxury apartment project by Ayala Land Premier.
Ayala Land Hotels & Resorts, which owns the new Mandarin, had planned to open at a new site just a stone’s throw away from its old one in 2020. The pandemic, however, pushed plans to late 2023, even early next year, as the global hotel industry, alongside the tourism and travel sector, are still trying to get back to normal keel.
Seda Hotels, an Ayala hotel chain in the country, is likewise seeing action with plans to add some 550 rooms to its portfolio this year. And by next year, Seda One Ayala is expected to open at the former site of Hotel InterContinental Manila which was demolished in 2016. Other Seda hotel expansions will be in Nuvali in Sta. Rosa, Laguna and Manila Bay.
Gaming
Other players in the local hotel industry, like SM Hotels and Conventions Center and Megaworld Hotels, have likewise recently come up with their respective announcements.
Currently rising within the Entertainment City’s Westside City development area in Parañaque is the two-tower Grand Westside Hotel with 1,530 rooms. The first tower of this Megaworld project is expected to open within the year, and the second next year.
Megaworld says the Grand Westside will be its largest hotel complex project to date in the country, and will be home to a $1-billion casino-hotel by LET Group Holdings (formerly known as Suncity Group Holdings), majority owner of Suntrust Resort Holdings.
Grand Westside will join Solaire Resort & Casino of Enrique Razon’s Bloomberry Resorts Corp., City of Dreams Manila owned by Melco Resorts and Entertainment (Philippines) Corp., and Okada Manila owned by Tiger Resorts Leisure and Entertainment, Inc. at boosting the value of Entertainment City as a gaming and entertainment complex in the region.
Melco Resorts, a partnership between Melco-Crown and the SM Group’s Belle Corporation, has three luxury hotel brands at the City of Dreams, namely Nobu, Nüwa, and Hyatt Regency. Its operations suffered severe losses from 2020 up until 2022, and have just started to earn some money during the second quarter of the year.
Solaire, which also experienced a financial hemorrhage during the pandemic lockdowns, is set to open Solaire Resort North in Quezon City by the first half of 2024. Razon is betting on the local market to provide the revenue stream for this project, much as the Entertainment City casinos had relied on local gamers for its improved 2023 net earnings.
Doubling room numbers
The SM Group is also on the move, having just recently announced plans to build 14 new hotels with partner Radisson Hotel Group within the next five years. The first one is expected by 2027 in Cebu City, and others – as per the master plan – will be near the SMX Convention Center in Olongapo City, in Fairview, in Dasmariñas in Cavite, and in Sta. Rosa in Laguna.
The Radisson hotels locally rely more on tourism and a return of MICE (meetings, incentives, conventions, and exhibitions), and the SM Group is bullish about the country’s inclusive economic growth within the decade to justify building its Park hotels outside of Metro Manila.
All in all, according to real estate specialist Colliers Philippines, the ongoing and planned projects will add more than 2,500 hotel rooms a year just in the metro, almost double the average of 930 rooms completed from 2019 to 2021. It notes also that about 40 percent of the new rooms will be of a foreign brand.
Moving outside business districts
The rationale behind the resurgence in new hotel construction and openings is still largely based on forecast strong economic growth, making the Philippines a destination and haven for business rather than leisure or tourism.
Hence the proliferation of new projects within Metro Manila, especially in Makati, which is known as the central business district of the country, and Bonifacio Global City (BGC), a rising business district that offers a mix of luxury and upscale hotels.
However, major hotel developers are also now considering other areas in Metro Manila like Mandaluyong, Pasig, and Quezon City as new sites especially with an anticipated improvement in traffic mobility resulting from newly built more roads or still under construction. Land values outside of Makati or BGC are also more competitively priced.
Tourism and gaming are markets that will definitely play a bigger role in the medium term as the government’s current infrastructure building projects involving airports and more expressways are completed. Not only can we expect more projects at the Entertainment City or in Cebu, but also in popular tourism destinations like Palawan and Bohol.
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