The Philippine Hotel Owners Association Inc. and Leechiu Property Consultants recently released the 2024 Philippine Accommodation Pipeline Report, which provides an in-depth analysis of new accommodation establishments and commitments across the country.
Among the key findings of the report was that the hotel development sector remains resilient post-pandemic, with 158 accommodation establishments and 40,084 rooms in development, reflecting strong confidence in Philippine tourism.
These development projects represent P250 billion in private sector investment, which will create over 55,000 direct hotel jobs.
Mactan, Cebu and Panglao in Bohol, the report showed, were ranked as the first and second tourist destination choices, prompting the most significant accommodation development in the country. However, the report pointed out that while the Visayas is the tourism center, Luzon still leads in accommodation developments – with 85 projects and 20,116 room keys – as it focuses on business and urban properties.
Thus, Visayas placed second with 57 accommodation developments and 16,830 room keys, accounting for just 42 percent of the pipeline compared to Luzon’s 50 percent. The Visayas projects, however, focus on leisure and resort tourism in Cebu, Bohol and Boracay, catering to the high demand from tourists, which drives significant growth.
Mindanao, with 16 new accommodation developments and 3,138 room keys, accounts for just eight percent of the total projects. However, it still shows that growth is expected as economic conditions continue on an upward trajectory. Further expansion is expected as developers seek growth markets, especially for mid-scale and upscale properties.
According to the report, by the fourth quarter of this year, 3,231 new keys are set to be available from projects being developed by Citadines Paragon Davao, Radisson Red Mandaue and Ascott Double Dragon Meridian Park.
For next year, another 8,168 keys will become available, with the majority located in the National Capital Region and in Cebu from Crown Regency Grand Paradise Resort in Bohol and the Westside City Resorts project.
By 2026, another 9,110 keys will be added to the market from the accommodation developments in Central Luzon, such as the Mercury Subic Hotel, Ibis Styles Subic and the Wyndham Garden Hotel.
However, the report projects a decline in new hotel openings in 2027 as most pipeline projects will have been completed by 2026, including those by SM Hotels and Convention Centers (SMHCC), particularly the Park Inn by Radisson hotels in Luzon and the Marriott hotels in Panglao and Mactan.
Thus, with the opening of 8,969 keys by that time, the Philippines hopes to reach its 12 million tourist arrivals goal by 2028.
But for 2029 and beyond, the PHOA and LPC report projects that 6,772 keys will be available, as there are still many projects in the planning stage.
Most of the development projects, or 50 percent, are by local brands, while international brands account for 42 percent and the remaining eight percent is by independent brands. This balance, LPC pointed out, underscores the Philippines’ growing attractiveness to global operators. International brands, LPC explained, benefit from their global reach and standards, drawing interest from investors and travelers, while local brands excel with large-scale developments in master-planned communities.
LPC anticipates growth in properties managed by international brands and an influx of global operators, driven by the country’s vibrant tourism sector. At the same time, local developers are expected to expand through an asset-light model, using third-party management services to grow their portfolios with lower capital expenditure.
It was also observed that developers are expanding their portfolios to cater to the diverse preferences of travelers. Thus, while demand for hotels remains strong, resorts are seeing a surge in popularity. Likewise, it was also noted that the growing number of serviced apartments and branded residences, many with optional rental programs, highlights the industry’s response to evolving market preferences.
LPC pointed out that condotels are becoming increasingly popular as developers look to boost early development cash flows and offer individual investors a unique investment opportunity. Such a model allows developers to diversify ownership and funding while meeting the growing demand for flexible, hotel-style accommodations.
For investors, condotels provide the potential for passive income and exposure to the tourism industry while enjoying professional hotel management, along with the added benefit of complimentary room nights for personal use.
Alfred Lay, LPC director for Hotels, Tourism and Leisure, was pleased to observe the diverse range of locations for upcoming accommodation developments across the country.
The geographic spread, he said, reinforces the vital role the hospitality sector plays in driving economic growth and creating employment opportunities in various regions nationwide. The continued expansion into these varied areas, he said, highlights the industry’s positive impact on local economies and its potential to contribute to a more inclusive regional development.
Alfred has a special fondness for the Philippines, even though he is a Chinese-Australian. He has been living in the country for the past 10 years and is actually married to a Filipina newscaster. His confidence in the Philippine property and tourism sector is backed by his own investment in a small boutique resort in Mindoro, which he has aptly named Casalay.
But one word of caution that LPC gave is that developers and investors must remain aware of challenges, including political and regulatory uncertainties.
Alfred had previously cited the need for the government to build more island airports, especially for the booming Palawan market, which includes El Nido, Coron, Port Barton and San Vicente. Boracay, he reiterates, remains the top beach destination.
Just recently, San Miguel Corp. chairman and CEO Ramon Ang announced the expansion of the Caticlan International Airport to accommodate up to seven million passengers.
The Department of Transportation likewise announced a number of new airports in the pipeline for Dumaguete and Panglao. There are also unsolicited airport development proposals for Iloilo, Kalibo and Puerto Princesa.
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