Colliers International Forecasts Philippines Hotel Development Outside Manila

Saturation in the hotel market is now affecting Manila, according to a report of Colliers International. The Philippines Inquirer report that in its top 10 predictions for 2016, Colliers International Philippines Research said that hotel developments will focus on resort destinations. “As the hotel market in Metro Manila becomes more crowded, the development of 4- and 5-star hotels in resort destinations will be more visible in 2016,” said Colliers in a statement provided to Inquirer Property by Julius Guevara, Colliers International Philippines’ director for research and advisory services.

Approximately 3,300 new hotel rooms were completed in Metro Manila in 2014, bringing the total hotel room stock beyond the 20,000-room mark. Some of the hotels in the Pagcor City casino district such as Hyatt City of Dreams and Nobu Hotel that had soft openings in December 2014 were officially opened on Chinese New Year’s Day in 2015. Marriott Newport City opened an additional 277 rooms in the Marriott expansion at the end of the year. According to the report, they were four more hotels to be opened until the end of 2015, growing the total number of hotels in Manila by another 2,000 rooms. New properties opened are the Novotel Araneta Center in Cubao, Quezon City and the Mercure Ortigas Center for Accorhotels. Two five-star hotels were also due to open by the end of the year at Fort Bonifacio: the Shangri-la at the Fort and the Grand Hyatt Manila. More properties are due to come in Manila until the end of 2017. Philippines capital will then offer a total room capacity of 30,500. Around 70% of the new stock is to be delivered in the casino districts highlights Colliers International, which still sees development’s opportunities for business and budget hotel development in the CBDs.

Many factors would shift investors’ interest from Manila to other destinations in the Philippines. Manila hotel occupancy is showing signs of decline. Occupancy stood at 62.2% during the summer. The metropolis suffers also from the inability to expand NAIA International Airport. Colliers International pointed out to the Inquirer that new airport infrastructure would be essential to increase local and foreign tourism.

“While service at Manila’s Ninoy Aquino International Airport continues to deteriorate until an alternative airport location is identified, the development of international airports in major destinations such as Cebu, Boracay and Bohol will allow foreign tourists to bypass Manila,” said the report.

Colliers said it foresees that “established branded hotel chains will come in to take over old, locally managed resorts that are in excellent locations but are past their prime.” Boutique Hotels in upcoming urban centres and lifestyle hotels in tourism areas will be the trend in hotel development over the years to come. Destinations such as Cebu, Davao, Puerto Princesa, Clark, Subic Bay and Boracay are to see more hotel properties being opened in the medium-term.With airports being expanded or built at those destinations, these secondary cities have a chance to attract more travellers who wish to bypass Manila.

Budget chains will also cater for an increasing number of domestic travellers. Recently, Thai based hotel chain Erawan announced to open its first property Hop Inn in the Philippines with one in Metro Manila due to open by December 2016.