Cebu hotels brace for market squeeze

CEBU, Philippines - Big hotels in Cebu are bracing themselves from a possible market squeeze in the industry as condo-tel projects start to sprout anywhere in the City.

Hotel, Resort, and Restaurant Association of Cebu (HRRAC) president Hans Hauri said that hotel players are concerned of the entry of condotel business in Cebu, considering that the City, or the province in general is still facing an over-supply of rooms.

However, he said this concern can easily be addressed if tourism stakeholders in both government and private sector will strengthen their efforts to further promote Cebu as all-season destination, in both leisure and business trips.

Hauri said although he supports the concept that “room supply should be ahead of the market”, but Cebu should start developing new markets now, specifically in taking advantage the huge local and international MICE (Meetings, Incentives, Conference, and Exhibitions) market.

Likewise, Cebu Parklane International Hotel general manager Cenelyn Manguilimotan said that city hotels in particular should brace themselves from the entry of condotel facilities in Cebu, as it can possible snatch market share of the existing hotels here.

The growth of accommodation facilities should level off with the growth of visitors to Cebu, she said.

According to Hauri, as Cebu room accommodation has increased to 60 percent in the last couple of years, there should be a more aggressive efforts to be done by stakeholders to avoid severe over-supply of hotel room availability, including already the introduction of condotel accommodation service.

Hauri, who is the general manager of Cebu Marco Polo Plaza Hotel reiterated that there is a dire need for Cebu to attract more travelers, whether in leisure, conventions, and big events, so that hotel industry can sustain the business, while at least 700 rooms has been added to the existing accommodation inventory within the Metro Cebu area alone.

Industry occupancy rate within the city hotels registered at an average of 52 percent, he said.

The opening of the new hotels such as Harolds Hotel, Radisson Blu, Diamond Suites, Elizabeth Hotel, among others have provided additional number of accommodation facilities, from over 6,000 room inventories before these hotels opened. “Suddenly, customers are getting confused.”

The Filinvest’s ongoing project called Grand Cenia alone will provide about 50 condotel rooms for Cebu.  

Unlike in the past, that Cebu’s demand for room accommodation is always at a high level, because it is the commercial hub for Southern Philippines, but the entry of SM retail chain to provincial areas like Davao, Bacolod, Cagayan de Oro, has lessened the number of out-of-town visitors to come to Cebu for shopping.

Moreover, the emerging convention locations such as Cam Sur, Subic, Clark, Baguio, among others has given the local and international MICE market alternative to consider new convention destinations, other than Cebu, Manila and Davao. (FREEMAN)