Leechiu Property Consultants (LPC) sees a revival of the tourism sector by next year, perking up the real estate segment of the industry.
The realty consultant said figures in the third quarter of the year revealed a “promising” outlook on Philippine tourism, with international tourist arrivals numbering 4,038,379 as of September 30.
“This places the Department of Tourism (DOT) at an impressive 84 percent of its 4.8 million international tourist arrivals target for 2023,” it said.
This may improve further if the country can attract back more tourists from Japan and China, which the country has yet to reclaim more than 50 percent of its 2019 tourist numbers, LPC added.
“China’s relatively low recovery rate can be attributed to multiple factors, including limited international flight capacity, which currently operates at only 50 percent of its pre-pandemic levels. Additionally, extended approval times for travel visas, soaring unemployment rates among Chinese youth at 21.3 percent, a sluggish economy, and strained political relations with the Philippines have all contributed to this,” it said.
LPC attributed the reduced number of Japanese tourists year to date to a 32-year low Japanese yen which fell below 150 per USD, lingering concerns over COVID-19 cases, and a surge in domestic travel in Japan driven by government subsidies for domestic accommodations.
LPC said more investments are needed in the sector in terms of hotel accommodations.
“Initiating these investments within the next year is critical to fortify international tourism beyond 2027. Currently, a development pipeline is in place, with nearly 15,000 new hotel rooms expected to be delivered within the next five years, primarily concentrated in Metro Manila,” it said.
It noted additional hotel projects set to be announced in the coming months or years, aligning with the DOT’s target of 12 million international arrivals for 2028.
According to LPC, development of hotels in key cities, such as Cebu, Clark, Davao, Bohol and Palawan, highlights the pivotal role of international airports in driving demand for hotel accommodations.
“The establishment of the Bohol-Panglao International Airport in 2018, coupled with the installation of night instrumentation in 2019, have significantly boosted tourist arrivals in Panglao. In 2019, Panglao reached an impressive 1,581,904 visitors, coming close to Boracay’s 2,034,599 arrivals during the same period. Given these promising figures, it’s becoming increasingly likely that Panglao Island could surpass Boracay Island as the Philippines’ premier tourism destination,” it said.
Alfred Lay, LPC director for hotel, tourism and leisure, noted ongoing developments in Panglao, including the proposed 50-hectare Panglao Shores project, the upcoming JW Marriott hotel, the Cebu-Bohol bridge and large-scale energy initiatives designed to meet Bohol’s growing energy demands.
These developments have had a significant impact on land values, with Alona beachfront properties now priced at approximately P80,000 to P120,000 per square meter, approaching the land values in Boracay’s white beach area, Lay said.
“Overall, 2024 is anticipated to be the year in which broad indicators in the global tourism industry (e.g., tourist arrivals, flight capacity and hotel occupancy rates) finally recover to pre-pandemic levels,” he said.
“Industry stakeholders should look out for certain trends that can greatly impact the Philippines in the coming year, including the relaxation of visa restrictions, persistent high airfares driven by escalating aviation fuel costs, ongoing inflation, a high-interest rate environment that may leave consumers with diminished purchasing power, and the return of business travel and MICE (meetings, incentives, conferences and exhibitions) events,” Lay added.