The Philippine hotel industry is cautiously optimistic in 2024 amid short-term concerns like inflation and geopolitical risks, but most of them have a positive medium-term outlook.
The latest hotel industry report by Leechiu Property Consultants, unveiled at the first Philippine Tourism and Hotel Summit Friday, revealed that 89 percent of industry players have a positive medium-term outlook.
This confidence surges higher for the long term, with 95 percent expecting the industry to thrive beyond the next three years.
The upper midscale hotel segment is attracting the most investment interest at 39 percent, particularly in up-and-coming second-tier cities and new township developments.
More than 64 percent of investors are bullish about their hotels’ profitability, anticipating a gross operating profit (GOP) exceeding 30 percent this year.
The upper midscale segment’s popularity reflects the impressive rise in occupancy rates, from 48 percent in 2019 to 67 percent in 2023, in Metro Manila. A growing interest in mid-market hotels is driven by developer activity in provincial cities and new townships.
Bohol leads the pack as the top investment destination with 41-percent interest, followed by Metro Manila with 39 percent, Cebu City and Siargao with 36 percent, El Nido with 34 percent and Mactan with 30 percent.
Investor sentiment is mixed for the short term, with 43 percent optimistic, 29 percent neutral and 5 percent expecting negative impacts due to inflation’s effect on travel costs.
Most hotels resumed full operations in 2023, and investors are optimistic about a full recovery by 2025, fueled by rising domestic tourism and significant increases in Korean visitors.
The industry seeks additional tax breaks, stronger promotional efforts, support for sustainable practices, improved accessibility in tourist destinations and streamlined collection of environmental fees.