Philippine Leisure Sector Bounces Back, Boosting Demand for MICE Facilities
The Philippine leisure sector is experiencing a positive turnaround as the country returns to normalcy. The resumption of face-to-face events and the rise in business and leisure travels have led to increased demand for meetings, incentives, conferences, and exhibitions (MICE) facilities. Foreign arrivals are also expected to surpass the Department of Tourism’s (DOT) target for 2023.
Furthermore, the domestic market continues to support the sector, lifting occupancies and daily rates. Developers are now seizing the opportunity by lining up major projects across the country, anticipating the demand from both business and leisure travelers.
To capitalize on this growing trend, developers and hotel operators are urged to assess the future demand for MICE facilities. The Department of Tourism is actively promoting the Philippines as a major MICE destination, aiming to attract global events and boost tourist arrivals and spending.
Colliers Philippines suggests that developers strategically plan their expansion, considering whether to launch their own brands or partner with foreign hotel operators. The data from Colliers shows that around 42 percent of new hotels opening in Metro Manila from 2023 to 2024 will be foreign brands. Additionally, there are opportunities to build more accommodation facilities in key destinations such as Pampanga, Cebu, Bohol, Davao, Palawan, and Bacolod.
Moreover, it is recommended for developers to align their strategies with the initiatives of the DOT. This includes expanding provincial presence to boost domestic tourism spending, maximizing the government’s plans for airport rehabilitation and modernization, and digitalizing visa issuance in major source markets like China and India.
The rebound of the leisure sector is evident in the foreign arrivals data. As of the first half of 2023, foreign arrivals reached 2.7 million, surpassing the full-year arrivals in 2022. The top source markets during this period were South Korea, United States, Australia, Japan, and Canada.
Average hotel occupancies in Metro Manila have also risen to 61 percent in the first half of 2023, compared to 55 percent in the second half of 2022. Colliers projects that by the end of 2023, average occupancy in the capital region will reach 65 percent. This growth is attributed to the rise in foreign tourists, the return of in-person events, and sustained demand from the local staycation market.
Additionally, the completion of 5,300 new hotel rooms is expected by the end of 2023, marking an all-time high. The Bay Area and Fort Bonifacio will account for about 61 percent of the new supply. Average daily rates (ADRs) have already grown by 5.2 percent in the first half of 2023, with Colliers projecting a 6 percent ADR growth for the year. However, this increase may be tempered by the delivery of a significant number of new hotel keys in the second half of 2023.
The Philippine leisure sector is a significant factor in sustaining the growth of the country’s property sector. With the increasing excitement and optimism from travelers, developers, and operators, the potential for further growth and exploration of the Philippines is undeniable.
