The hotel sector is “one of the most vibrant segments” of the Philippine property market, with rising foreign arrivals and the so-called revenge travel by domestic tourists driving the opening of new accommodations and higher daily rates, professional services and investment management firm Colliers said Thursday.
At the group’s semi-annual property market report, Colliers Philippines research head Joey Bondoc said the return to normalcy has been good to leisure and business travel, with the country on track to exceed the Department of Tourism’s target of 4.8 million foreign visitors for 2023.
“In first half of 2023, Colliers recorded the delivery of 803 rooms,” said Bondoc, noting the completion of four hotels around Metro Manila. “By the end of 2023, we expect the completion of 5,300 new rooms, an all-time high,” he added.
Between 2023 and 2025, he said the forecast room supply is around 3,000 every year, with a substantial number of those rooms coming from foreign brands including Ibis and Pullman.
Occupancy rate has risen in the first half to an average 61 percent–with the highest at 65 percent seen in five star hotels. In the year-earlier period, the average occupancy rate was 55 percent.
Average daily rates is forecast to rise by 6 percent this year.
For the office segment, Colliers noted a “marginal decline” in vacancy rate in Metro Manila due to improved transactions activity and a slowdown in non-renewals in the first half of the year.
It added that rental recovery remains “uneven” across Metro Manila submarkets, with rental recovery noted in the central business districts of Makati, Fort Bonifacio and Ortigas.
Colliers said net take-up in the second quarter more than tripled to 93,900 square meters compared to last year, forcing it to revise its 2023 projection to 220,000 square meters.
It said 80,400 square meters of new supply were brought to market in the second quarter, with the forecast for new office supply for 2023 revised to 668,400 square meters from 569,100 square meters.
From 2023 to 2025, Colliers associate director Kevin Jara said the firm expects the completion of 492,400 square meters annually, just half the one million square meters completed each year from 2017 to 2019 due to demand for office space from Philippine offshore gaming operations.
He said while POGO entities drove office space transactions in the first half, demand will still be driven by business process outsourcing industry moving forward.
Jara said new office supply will lift vacancy to 17.7 percent next year from the projected vacancy rate of 17 percent at the end of 2023.
