According to a recent report by Colliers, the Philippine hospitality sector is on the upswing, bolstered by significant infrastructure improvements and an influx of international visitors. In 2024, the country welcomed nearly 5.95 million tourists, a figure ensuring it’s still catching up to pre-pandemic expectations. Despite not hitting the ambitious tourist arrival targets, spending reached a record-breaking PHP 760 billion, making the Philippines a leader in Southeast Asia regarding per-visitor expenditures.
With an optimistic outlook for the future, Colliers advises developers to keep an eye on emerging destinations, particularly with the newly approved 99-year land lease law making strides through the legislative process. This development is poised to attract foreign brands and facilitate the creation of integrated leisure hubs, providing a fertile ground for investment.
In a striking trend, foreign hotel brands are aggressively expanding by forming partnerships with local developers in both established and up-and-coming markets. Major players such as Dusit, Wyndham, Accor, Marriott, and The Ascott Group are leading the charge. The ongoing integration of land lease extensions and Real Estate Investment Trusts (REITs) is anticipated to further drive investment, especially in tourism-centric townships and convention facilities.
Metro Manila has seen its hotel occupancy rates rise to 64% in the latter half of 2024, with Average Daily Rates (ADRs) climbing by 2.7% year-on-year. As we moved into the first quarter of 2025, demand for Meetings, Incentives, Conferences, and Exhibitions (MICE) facilities remained robust, particularly in the Makati Central Business District, Fort Bonifacio, and the Bay Area. Four- and five-star hotels particularly benefitted from this increased demand, reflecting the resurgence in business travel. Though room supply struggled due to construction delays, the market anticipates the addition of 2,680 new rooms in 2025, primarily located in Makati and the Bay Area. Interestingly, outside the capital, occupancy rates soared to between 70% and 80% in areas like Clark and Cebu.
Colliers anticipates consistent occupancy levels and a modest ADR increase of 3% in 2025, driven by rising foreign arrivals and thriving MICE activity. Developers are encouraged to collaborate closely with airport infrastructure projects to pinpoint future growth corridors and capitalize on the evolving travel landscape.
How has tourist spending changed in the Philippines recently?
In 2024, tourist spending in the Philippines hit a record PHP 760 billion, making the country a leader in Southeast Asia for per-visitor expenditure.
What major trends are influencing hotel development in the Philippines?
Foreign hotel brands are actively partnering with local developers in both established and emerging markets, with new land lease laws set to stimulate investment in integrated leisure hubs.
What are the expected occupancy rates for Philippine hotels in 2025?
Colliers is forecasting stable occupancy levels and a 3% increase in Average Daily Rates in 2025, fueled by increasing international arrivals and strong MICE demand.
