Hotels urged to lower rates to attract domestic tourists

MANILA, Philippines — Foreign-branded hotels are urged to offer lower rates to local travelers in a bid to attract more domestic tourists as foreign arrivals are expected to slow down with the temporary China travel ban.

“I think initially they should test it at 10-20 percent [lower than normal rates], and try to compare versus the homegrown brands,” Colliers International Philippines research manager Joey Roi Bondoc told reporters.

Bondoc said hotels are expected to see lower occupancy levels given the imposed China travel ban, as foreign arrivals are expected to go down.

He added that occupancy levels are forecast to drop to 63 percent this year from the 72 percent occupancy rate in 2019.

On Sunday, President Duterte issued a temporary travel ban from China and its Special Administrative Regions, Hong Kong and Macau, in order to contain the spread of the novel coronavirus (nCoV).

“For foreign-branded hotels, what we previously proposed is to impose a domestic rate for local travelers because now if your foreign travelers are slowing- because it’s not just China that was affected – we’re seeing a lot of foreign tourists cancelling trips,” Bondoc said.

China remains the country’s second largest source market of foreign arrivals, with a total of 1.6 million Chinese arrivals from January to November 2019.

Bondoc said offering lower rates to local travelers will help hotels attract the domestic market.

“I think they have to test it initially, because I think they have not done that for the longest time. Because the last time that was done was after the Asian financial crisis when the market was down,” he added.

Hotel and Sales Marketing Association (HSMA) president Christine Ibarreta said hotels are currently seeing a 20 percent to 40 percent cancellation rate in bookings.

“But we do have to accept this fact,” Ibaretta said in a text message to the Star.

“Thus, we push for domestic travel with cooperation with other industry players like airlines,” she added.

Tourism Secretary Bernadette Romulo-Puyat acknowledged earlier that foreign arrivals are expected to drop with the implementation of the temporary travel ban, but emphasized that safety is of utmost priority.

“The DOT will step up its marketing and promotions efforts in other source markets to compensate for the expected decline in Chinese travelers,” Puyat told The Star.

“We are committed to supporting our partners from the private sector while our health authorities are addressing the situation,” she added.