Following the pandemic, the resurgence of midscale hotels has been notable, buoyed by domestic tourism and the accessibility offered by low-cost airlines, according to Leechiu Property Consultants.
However, upscale hotels situated in key central business district areas are yet to witness a full rebound, LPC said in a report.
The report said these hotels are awaiting the return of business travelers and the associated demand for meeting spaces.
However, upper upscale hotels have shown resilience, with their average daily rate (ADR) and occupancy rate (OCC) already surpassing pre-pandemic levels, indicating resistance to cost-of-living adjustments.
LPC said while the ADR in the luxury segment has already exceeded pre-pandemic levels, OCC remains 2 percent below that of 2019.
In 2023, the hotel industry achieved an OCC of 65.2 percent, an ADR of P5,189, and a revenue per available room (REVPAR) of P3,407.
Despite these figures, they still 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.
LPC said although ADR growth typically trails behind OCC rate growth, hotels have shifted their focus towards improving margins and boosting ADR to counteract the inflation-induced rise in operating expenses.
LPC said 24,267 keys are in the pipeline across 87 hotel projects throughout the Philippines.
Despite boasting the highest number of keys in the country,Metro Manila is still set to welcome the highest number of keys in the pipeline— 9,668. Following closely are Cebu, Bohol, Boracay, Davao, and Palawan, respectively.
These destinations stand out as they boast airports facilitating direct international flights, thus driving the demand for additional developments to cater to the anticipated increase in tourist arrivals.
