Hotel, resort projects not likely to be affected by ITH removal

MANILA, Philippines - The rapid pace of hotel and resort developments is  likely to continue despite a Board of Investments (BOI) regulation removing the income tax holidays (ITH) for new and expanding tourist accommodation facilities in Metro Manila, Cebu City, Mactan island and Boracay island, a property consultancy firm said.

Colliers International associate director Julius Guevara said in an interview that the new BOI regulation is not expected to affect the development of hotels and resorts in the four areas.

He said as the government is promoting the country as a tourist destination, opportunities abound for hotel and resort developments.

Apart from the government’s tourism push, the move to attract firms to invest or do business in the country is likewise expected to encourage hotel developments.

“It still makes sense for hotel developers to continue building because of the increasing interest in the Philippines not only for tourism but also for business prospects because of our growing economy,” he said.

 â€œAs (tourist) arrivals grow, it will offset any effect of the ITH (removal),” he added.

 In March, the BOI stated that new and expanding tourism accommodation projects such as hotels, resorts and bed-and-breakfast facilities in the four areas that will apply for registration with the agency will no longer qualify for  the ITH perk.

The regulation was issued as the four areas are considered to be developed and at full capacity.

Last month, the Philippine Hotel Federation Inc., which groups hotels, resorts, tourist inns, pension houses, and serviced apartments in the country, called on President Aquino and the BOI to revoke the regulation as it noted that the ITH is necessary to make the country competitive in the region.

The group also noted that the Department of Tourism has endorsed the retention of the ITH in the four areas given the anticipated room demand as the government is aiming to attract more foreign tourists.

Due to these concerns, a high-ranking source from the BOI said the agency is opening discussions with the tourism sector.

The source said the BOI would hear the arguments of the concerned firms on the resolution.

The government is aiming to attract 10 million foreign tourists by 2016.

Last year, 4.273 million foreign tourists visited the country.

As of the first quarter this year, foreign tourist arrivals reached 1.2 million.