The Philippines is on track to meet the target of 40,000 units of accommodation rooms with an investment value of P250 billion in the next six years under the Philippine Accommodation Pipeline Report 2024.
David Leechiu, chief executive officer of Leechiu Property Consultants, said in a recent interview that the number of hotel keys may in fact increase because interest rates are coming down.
“With interest rates coming down, it will be easier for people to build more viable projects,” Leechiu said.
LPC, in partnership with the Philippine Hotel Owners Association (PHOA), crafted the Philippine Accommodation Pipeline Report 2024, which was released in September last year.
When asked how many more hotel units will be added to the 40,000 pipeline, Leechiu said, “It’s hard to tell right now. It’s too early because this is the first time that interest rates are moving credibly and meaningfully.”
“In the next two years, that 40,000 (hotel keys) will grow,” Leechiu added.
He said hotel development will intensify in places like Siargao, Siquijor, Bohol, Palawan, Cebu, Dumaguete, Davao, Cagayan de Oro, among others.
Leechiu said these can be considered new frontiers in hotel development because “these are the places where everyone wants to go. “
He did not give figures on the number of hotel units built so far since the roadmap was launched.
“ But a lot of these are first-time brands, like the JW Marriott, which is coming up in Bohol,” Leechiu said.
“It’s fantastic. It’s a very bold statement about the future,” he said, adding that this is driven by pure tourism demand.
“We are cautiously optimistic,” Leechiu said.
In a report released this month, LPC said tourism continued its upward trajectory in the first half of 2025, driven largely by robust domestic travel activity.
Despite a more measured rebound in international arrivals, the sector remains a vital contributor to national economic performance, reinforcing its role as a long-term engine for growth and investment, LPC said.
LPC noted post-pandemic domestic travel has reached record-high expenditure levels, supported by a growing population, rising consumer spending, and a more travel-savvy middle class.
It projects domestic tourism receipts to continue their steady climb.
In contrast, inbound arrivals have not yet returned to pre-pandemic levels. However, international receipts are growing due to longer stays and increased spending by high-value tourists.
LPC said this marks a shift toward a more quality-focused recovery.
International arrivals from long-haul markets are rising, buoyed by improved global interest and the launch of additional flight routes.
“These trends support a more diversified visitor base and reinforce the need for continued improvements in air connectivity,” LPC said.
However, recent security-related incidents have impacted perceptions, particularly among South Korean travelers—a key market. Similar trends have been observed across the region, underscoring the importance of sustained confidence-building measures and market diversification strategies, the report said.
Recovery in higher-end hotels
LPC also observed that the recovery in the hotel sector has been strongest in higher-end segments, fueled by demand from affluent travelers and corporate clients. Mid-tier and budget hotels continue to face pressures from inflation and growing competition from short-term rental platforms such as Airbnb.
“These alternatives, often operating outside traditional regulatory frameworks, offer flexible pricing that appeals to budget-conscious travelers,” the report said.
LPC said while Philippine hotel rates remain competitive within Asean, the perception of higher overall travel costs persists due to elevated transportation expenses—especially domestic airfare. As an archipelagic nation, air travel is often essential between destinations, but limited route networks and flight frequencies contribute to higher fares. Addressing these Challenges are key to improving accessibility and reinforcing the Philippines’ value-for-money positioning.
“With the anticipated growth of domestic tourism, our industry is set for a significant boost. To fully tap its potential as a major driver for the Philippine economy, it’ s crucial that we realign our strategies and goals to overcome existing challenges and fully capitalize on this opportunity,” said Alfred Lay, director of Hotels, Tourism, and Leisure at LPC.
