Hotel occupancy in Metro Manila may drop by 10%

MANILA, Philippines - Hotel occupancy in the business districts of Metro Manila could drop by 10 percent this year as companies cut back on their expenditures, an industry player said yesterday.

A survey conducted by Amadeus Philippines showed that companies in the Asia Pacific region will be cutting down on trips this year while at the same time scrutinizing every expense detail of travels by corporate officials.

The result of the survey showed that hotels in Metro Manila should reduce their rates or offer more promotional packages to cope with the dropping demand and hard financial situation.

“There are now austerity measures being placed by companies with regards to travel.  Companies are now more price conscious and are spending more prudently,” Amadeus Philippines general manager Albert Villadolid said.

Villadolid said the new approach by companies in their travel plans might potentially lower by at least 10 percent the hotel occupancy in Metro Manila this year.

He said their survey showed that 47 percent of corporate executives plan to travel less over the next 12 months while another 28 percent said they will be downgrading their desired hotel accommodations from the usual five and four star hotels.

Villadolid said there will also be a backlash on lesser known hotels in the country or those with short track records as more companies are leaning towards hotel chains that have a uniform service level across all countries where they are located. 

“There is already a downturn last year among the hotels. As the Philippines begins to feel the impact of the international financial crisis and the cutbacks in corporate travel, we might see a lot of Metro Manila hotels with lower occupancy levels,” Villadolid said.

For the first 11 months of 2008, hotel occupancy rates in Metro Manila were down 3.31 percent as compared to 2007. There are currently 81 hotels in Metro Manila with a combined occupancy rate of 14,344 rooms.

“There is a flight towards the trusted brands and consistency of service.  Right now, companies are looking for good Internet access and efficient check in and check out when booking hotels,” Villadolid said.