Challenges and prospects for the Philippine hotel industry under the pandemic

The lingering effects of the COVID-19 pandemic have posed unprecedented challenges to the hotel industry in the Philippines. Restrictions in inbound and domestic travel have weakened demand, which has resulted in a sharp drop in occupancy rates and revenue, and the displacement of tourism and hospitality workers. Around the globe, many tourism destinations are likewise struggling and there are no clear indications yet as to when the industry will go back to pre-pandemic levels.

The latest report from the Department of Tourism (DOT) shows that for the period January to July 2021, only 71,021 foreign visitors entered the country, representing a drop of 94.97 percent compared to the 1,410,653 in the same period last year. The decline is a result of restrictions in inbound international travel and the low daily quota set on incoming air passengers from abroad.

Meanwhile, the latest figures on domestic tourism coming from the DOT and the Philippine Statistics Authority show that for the whole year of 2020, there were only 24,250,000 domestic trips taken, representing a decrease of 77.90 percent compared to the 109,752403 in 2019. Clearly, hotels have also suffered because of the slowdown in domestic travel. The current Alert Level 4 status in Metro Manila also means hotels are not able to take domestic leisure guests. Revenue streams of hotels have therefore been severely affected.

The Updated Tourism Response and Recovery Plan of the DOT points to domestic travel as the key to tourism’s recovery in the foreseeable future while there are still restrictions in the entry of international leisure travelers. The Philippine Hotel Owners Association (PHOA) agrees with this track and is solidly behind the efforts of the department for the safe and gradual restart of tourism through greater inter-zonal mobility, particularly for fully vaccinated travelers.

Despite the current challenges, PHOA member-hotels continue to operate and service the needs of various groups, particularly overseas Filipino workers (OFWs), to heed the call of government to help mitigate the negative impact of the pandemic. Since early last year, PHOA and the Overseas Workers Welfare Administration (OWWA) have been working hand in hand to ensure the safe and comfortable stay of OFWs, returning overseas Filipinos and other clients. PHOA is firmly committed to helping the government achieve herd immunity by inoculating its hotel workers. It is estimated that about 90 to 95 percent of workers in PHOA hotels are already vaccinated. Guests can therefore be assured of a safe, worry-free and comfortable stay.

Even while the hotel sector copes with the pandemic, the PHOA continues to partner with other organizations in offering a wide range of training programs. Since the start of this year, PHOA has partnered with the Employers Confederation of the Philippines and International Labor Organization in conducting Soft Skills Training Program, 40-hr Basic Occupational Safety and Health seminars by Occupational Safety and Health Center and Guidelines on Ventilation for Workplaces and Public Transport to Prevent and Control the Spread of Covid-19 by the Department of Labor and Employment.

The seminars are part of PHOA’s re-skilling and up-skilling initiatives to improve overall productivity in the workplace, promote career growth and ensure a healthy and safe work environment. More seminars will be scheduled by PHOA, including on mental health of hotel workers which is quite important, given the impact of the pandemic.

Moving forward, the PHOA wishes to see a relaxation of the guidelines on domestic inter-zonal travel and eventually inbound travel. In particular, the association would like to see the following:

• For fully vaccinated travelers to move between NCR and GCQ/MGCQ areas without the need for an RT-PCR negative test result.

• For fully vaccinated persons to be allowed to check in at staycation hotels in NCR under Alert Level 4.

• For the daily quota of arriving international passengers in the country’s gateways to be increased.

PHOA will support government efforts for the safe and steady recovery of international and domestic travel, which some quarters expect to normalize in two to three years. This will depend on a number of factors, including the rollout of the government’s vaccination program, the normalization of domestic and international flights, easing of restrictions in inbound and domestic travel and the cooperation and compliance of the general public to the minimum health and safety standards.

*      *      *

Arthur M. Lopez is president of the Philippine Hotel Owners Association (PHOA).