Hospitality sector poised for growth as global hotel chains expand in PH

Foreign hotel brands are expected to dominate new supply in Metro Manila’s hospitality sector in the coming years, according to real estate consultancy Colliers Philippines.

Colliers reported last week that international hotel chains would likely account for 56 percent of new room supply from 2025 to 2027, an increase from its earlier projection of 42 percent.

“We are seeing a relentless expansion of foreign hospitality brands in the Philippines,” Colliers research head Joey Bondoc said in the firm’s latest report. He noted that the modernization of airports and anticipated rise in tourist arrivals continue to attract global operators despite current headwinds.

Among the upcoming projects are Ascott DD Meridian Park, Dusit Greenhills Manila, Mandarin Oriental, Canopy by Hilton, and Moxy Hotels Circuit. Additional developments scheduled for completion include Somerset Valero Makati with 176 rooms, Alino Hotel New Manila with 128 rooms, AC Hotel Ortigas with 150 rooms, Vibe Hotel Alabang with 144 rooms, Seda Hotel Arca South with 265 rooms, and Copeton Baysuites with 140 rooms.

Data from the Department of Tourism (DOT) showed that foreign tourist arrivals in the first five months of the year reached 2.54 million, down 1.2 percent from the same period in 2023. The decline was largely attributed to a 19-percent drop in South Korean visitors to about 553,000, although South Korea remained the top source market, followed by the United States, Japan, and China. Because of this trend, Colliers said the Philippines is unlikely to reach the government’s target of 7.7 million arrivals this year.

Despite the weakness in international tourism, domestic travel provided crucial support. The DOT reported that domestic tourism expenditure rose by 16.4 percent to P3.1 trillion last year. Colliers also noted that average hotel occupancy in Metro Manila was stable at 64 percent in the first half, buoyed by strong demand from meetings, incentives, conferences, and exhibition events. Full-year occupancy is projected at between 60 and 65 percent.

Meanwhile, hotel room completions have slowed, with only 1,100 rooms expected this year compared with an earlier forecast of 2,700, as several projects faced construction delays.

Colliers emphasized that while international arrivals have yet to return to pre-pandemic levels, continued investment from foreign hotel brands reflects confidence in the long-term growth of the Philippine hospitality sector.