Metro Manila hotel occupancy seen rising further this year

MANILA, Philippines — The average hotel occupancy rate in Metro Manila is expected to further increase  to over 60 percent this year, driven by a higher number of domestic and foreign travelers.

In a market report, Colliers Philippines said   hotel occupancy rate  in the National Capital Region may breach 60 percent this year.

It said the expansion  would be driven by the influx of more foreign visitors and continued growth from the local staycation market.

Colliers said the resurgence of in-person events should also lift the demand for meetings, incentives, conventions and exhibitions (MICE) facilities.

“In Philippine tourism, optimism is definitely trouncing pessimism. Leisure stakeholders used to sail through uncharted waters, but now we are seeing pre-pandemic dynamism reverberating throughout the sector. Aside from the domestic tourism push, we see the influx of more international tourists boosting tourism receipts, hotel rates, and occupancies,” Colliers Philippines director for research Joey Roi Bondoc said.

“In our view, recovery should be supported by the modernization of more airports and upgrading of road networks. Aside from the Tourism department’s initiatives, the Senate’s proposal to amend the Holiday Economics Law should also give domestic tourism a much needed boost,” he said.

Latest data from Colliers showed that the hotel occupancy rate in Metro Manila grew to 55 percent in the second half of 2022, higher than the 47 percent occupancy rate a year earlier.

The figure is also higher than the 44 percent occupancy rate in the second half of 2021.

“Colliers attributed the rise in occupancies to the holiday season and return of more Filipinos working abroad,” the report said.

Moreover, Colliers also reported an increase in average daily rates (ADRs) in Metro Manila hotels as it grew by 14.1 percent.  This was higher than its initial full-year projection of an eight percent growth.

From 2020 to 2021, ADRs posted a cumulative drop of 20 percent.

“Five-star hotels recorded the fastest growth in ADRs, indicating strong demand for top-tier hotels in key business hubs and the gradual return of business travelers and in-person corporate events,” Colliers said.

Data from Colliers showed that ADRs for five-star hotels stood at P11,148, a 33.3-percent increase from the P8,361 in the previous year.

Four-star hotels ADR registered at P5,229, a 10.4 percent increase from P4,738 in the year before, while three-star hotel ADRs posted a 2.3 percent increase to P3,559 from P3,480.

For this year, Colliers projects ADRs to grow by about six percent. “This should be supported by pent-up demand from both domestic and foreign travel markets,” it said.