Property consultancy Colliers Philippines sees 2024 as a banner year for hotel completion in Metro Manila.
This after the hospitality sector continued to recover due to holiday-induced spending in the last quarter of 2023 and the revival of in-person events.
“In 2024, we expect about 5,120 new hotel rooms, an all-time high,” said Colliers Philippines in a research.
Among the hotels due to be completed this year are: Solaire North and Ibis Styles Manila Araneta City, Citadines Roces, Grand Westside Hotel, Ascott DD Meridian Park, Somerset Valero Makati and Seda One Ayala.
The Bay Area is likely to cover nearly half of the new supply.
In the second half 2023, Colliers recorded the delivery of 1,797 rooms following the completion of Hotel101 – Fort (606 rooms), Red Planet Hotel The Fort (245 rooms), Seda Manila Bay (350 rooms), Lansons Place Manila (389 rooms) and Citadines Benavidez (207 rooms) in Makati.
Colliers said about 2,594 rooms were completed in 2023.
This is lower than its own forecast of 5,300 rooms as some hotels’ completion was pushed back due to construction delays.
Colliers said the growth in average daily rates (ADR) and occupancies are likely to be fueled by business and leisure demand.
Hotel ADR grew by 10.4 percent in 2023, higher than Colliers’ forecast of 6 percent.
Four-star hotels posted the fastest ADR increase in the second half of last year while five-star hotels saw continued growth year-on-year due to sustained demand for leisure and in-person corporate events.
“In 2024, Colliers projects ADRs to increase by 6 percent. We expect the substantial completion of rooms to temper the growth in daily rates in 2024,” Colliers said.
The property consultancy projects average occupancy to reach 68 percent this year as more international tourists are expected despite the substantial completion of new hotel rooms in the capital region.
In the second half of 2023, average hotel occupancies in Metro Manila reached 65 percent, up from 61 percent in the previous semester.
Colliers said the rise in occupancies was due to holiday-induced spending and the surge in foreign arrivals in the last quarter of 2023. The sustained demand for meetings, incentives, conventions and expositions also partly lifted the demand for hotels during the period.
“2024 will be a banner year for new hotel completion in Metro Manila. The tourism sector’s share to national economic output has also been improving with the segment establishing itself as a major job-generating sector of the Philippine economy,” the research said.
To reap the sector’s gains, Colliers recommends that developers and operators maximize the return of in-person events and business travelers, attract more tourists from the Philippines’ non-traditional source markets, and align development pipeline with the government’s “Build, Better, More” initiative.
