Investors bullish on medium, long-term hospitality industry growth — report
MANILA, Philippines — Several investors are confident with the growth of the hospitality industry in the Philippines in the next three years and more, according to a report.
On Friday, Leechiu Property Consultants (LPC) in partnership with the Philippine Hotel Owners Association (PHOA) released an inaugural Philippine Hotel Investment Outlook Survey which found that majority of investors in the country expressed an optimistic outlook for the hospitality growth.
At least 89% of the survey respondents said they are confident for the industry’s growth in the medium term or within one to three years. Of which, 64% voted for positive while 24% are very positive of the growing confidence for the hospitality industry.
On the other hand, outlook for long-term hotel industry growth within the next three years appears to be highly optimistic with 95% encouraging votes, 46% voted for positive while 49% were very positive with this prospect.
The findings align with LPC’s forecast that the hotel industry will fully recover by 2025.
Despite the positive outlook for the industry’s recovery, investors have mixed feelings over the short-term prediction of the hospitality industry within the one to twelve months amid the inflation that shoot ups the cost of transportation, commodities and services, impacting both the tourists and hotels.
The report cited that investors are still working to recover from COVID-19 pandemic-related losses with hotels allowed to fully resume operations in 2023.
“The Philippine hotel industry is a mixed bag, similar to the broader real estate market in 2024. We anticipate a complete industry recovery by 2025 as consumers maintain their willingness to spend on travel,” LPC’s report read.
“Despite the significant gap left by the loss of Chinese tourists, domestic tourism in the Philippines has shown itself to be a substantial and reliable growth driver, complemented by significant increases in Korean visitor arrivals,” it added.
The Department of Foreign Affairs last week imposed additional requirements for Chinese nationals applying for tourist visas. The Department of Tourism seeks to address this by attracting other tourist markets such as South Korea, United States of America and Japan, among others.
Cities, provinces eyed by investors
Meanwhile, the report said that Bohol or Panglao Island has also garnered significant interest among hotel developers, with 41% of the respondents exploring hotel development on the island.
“This period also presents an opportunity for operators to address shifts in guests' demands and preferences,” it said.
LPC cited that Bohol’s popularity is expected after UNESCO designated it as the country’s first global geopark in May 2023. The island’s popularity was also fueled by its proximity to the Panglao airport, diverse tourism offerings, as well as high tourism volume facilitated by more than 70 international flights weekly.
Bohol was followed by Metro Manila with 39% expressing investment interest. It leads the country with 10,518 keys in the pipeline.
The three other highest rated cities or provinces in terms of investment interest were Cebu City (36%), Siargao (36%) and El Nido (34%), which also happened to be among the top tourist destinations of the Philippines.
LPC stressed that the recovery period of the hotel industry “presents an opportunity for operators to address shifts in guests’ demands and preferences.”
Philippine Tourism and Hotel Investment Summit 2024 highlights
The Philippine Hotel Investment Outlook Survey, conduced from March to April this year, polled more than 10,000 hotel keys in the industry. A total of 44% of the respondents are owners or owner representatives while 56% are hotel operators.
This was released last June 21, during the inaugural Philippine Tourism and Hotel Investment Summit 2024 hosted by PHOA.
Tourism Secretary Christina Frasco delivered her keynote speech at the summit, highlighting the “phenomenal performance” of the Philippine tourism. She cited that the Philippines has garnered the “highest tourism growth” in 24 years.
The Philippine Statistics Authority reported that the tourism industry contributed 8.6% to the gross domestic product in 2023 and has employed over 6.21 million Filipinos in the same year.
Frasco expressed gratitude to PHOA for organizing the "timely" summit, which aligns with President Ferdinand Marcos Jr.'s vision to enhance Philippine tourism through investments in hotels, accommodations and infrastructure.
She is calling on investors to expand in the Philippines, citing that the country needs to catch up with its Southeast Asian neighbors in terms of the number of hotel rooms offerings.
“And that is why this summit very timely kasi iniimbitahan natin ‘yung mga investors and current owners to further expand in the Philippines and to provide more opportunities for tourism development sa ating mga destination sa Pilipinas,” the tourism chief told the press at the sidelines of the summit.
During the summit, the DOT’s infrastructure arm, Tourism Infrastructure and Enterprise Zone Authority (TIEZA), hosted a lunch where its Chief Operating Officer Mark Lapid introduced TIEZA’s strategic role in hospitality and tourism development. He also presented their infrastructure projects to potential investors.
The conference was attended by estimated 250 delegates composed of hotel owners, developers, investors, government officials and industry stakeholders
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