A potential shortage in hotel supply could impact the Department of Tourism’s target of 12 million international arrivals by 2028, a report of Leechiu Property Consultants (LPC) said.
While LPC anticipates a complete rebound in overall hotel performance by 2025, a potential shortage in hotel supply, attributed to construction delays due to the pandemic and the high cost of funding, will pose a challenge.
LPC said its forecast of a shortage is based on an average annual increase of 9 to 10 percent in international arrivals by 2028, contrasting with a less than 1 percent annual increase of the hotel supply from 2025 to 2028.
“The less than 1 percent growth in hotel keys between 2025 and 2028 might limit our ability as a country to reach 12 million international arrivals,” the report said.
LPC said the projected shortage of supply will undoubtedly increase room rates and occupancy rates.
“As a result of this, it will become a more expensive pastime for us to travel locally and for foreigners to come here,” LPC said.
LPC recorded a total of 24,267 keys in the pipeline across 87 hotel projects throughout the Philippines.
LPC said the hotel industry’s performance in 2023 is still below pre-pandemic.
Last year, occupancy rate (OCC) was registered at 65.2 percent, an average daily rate (ADR) of P5,189, and a revenue per available room (REVPAR) of P3,407.
These fall short of the benchmarks set in 2019, with a deviation of -8 percent in OCC, -4 percent in ADR, and -13 percent in REVPAR compared to the corresponding figures in 2019.
