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Colliers International sees demand for hotels in Bacolod, Davao, Bohol

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HOTEL DEVELOPERS should target projects in key destinations outside Metro Manila as more Filipinos travel around the country, Colliers International said.

“Hotel developers should zero in on the rising number of domestic tourists and the growing popularity of staycations by building two- to four-star hotels particularly in Iloilo, Cagayan de Oro, Bohol, Bacolod, and Davao whose regional airports are up for expansion and modernization,” Colliers International said in a report dated Aug. 22.

Colliers released the report titled “Infra-led GDP to buoy property,” a week after the government announced the Philippine gross domestic product (GDP) accelerated by 6.5% in the second quarter.

The property consultancy noted that domestic travelers have continued to drive hotel demand. Philippine Statistics Authority (PSA) data showed the other services segment, which covers restaurants and hotels, grew by 5% in the second quarter of 2017.

“PSA data also reveal that Filipino households’ hotel and restaurant spending has been growing by 7.3% annually over the past seven years, faster than the increase of other household spending subsectors such as food and beverage (7.3%), education (4.8%), and clothing and footwear (1.4%),” Colliers said, adding this shows more Filipinos are spending more of their income on leisure-related activities.

Also, Colliers said Department of Tourism data showed local travelers made more than 90 million trips from April to September 2016.

By destination, only 15% of the trips were made in Metro Manila. Other top destinations included Negros Occidental (7%), Pangasinan (4.6%), Cavite (4.3%), Quezon Province (4.1%) and Bohol (4.1%), and Cebu with 3.7%.

“Given the continuously rising domestic travel market buoyed by millennial spending and rising popularity of staycations, we recommend that developers put up more affordable hotels in the preferred destinations outside of Manila,” Colliers said.

Colliers identified Bacolod, Bohol, Cagayan de Oro and Davao as attracting hotel and leisure investments, as their regional airports are being expanded and modernized.

“These projects, once completed, should result in the mounting of more direct flights to these provincial hubs,” the report said.

The government’s plan to construct infrastructure projects outside of Metro Manila and into the provinces could also result in increased domestic tourism in the future.

This year, the tourism department targets to attract a total of 7 million tourists, higher by 17% than the 6 million tourist arrivals recorded in 2016.

In the January to May period, foreign arrivals were up by 14% to 2.88 million. The growth was driven by the department’s marketing efforts alongside the arrival of delegates for the Association of Southeast Asian Nations summit last April.

Colliers said the increase in tourist arrivals will sustain the growth of the hotel sector, which is set to add around 1,700 hotel rooms during the second half of 2017. This will include the opening of the 460-room Grand Hyatt Manila in Fort Bonifacio in Taguig City, the 200-room TRYP by Wyndham Manila in the Mall of Asia complex, and units in I’M Hotel in Makati City and Seda Vertis North in Quezon City.

The report showed occupancy rates are expected to stay within the range of 65% to 70% in the next six months, lower than the 71% recorded in the first half of the year. — A.B. Francia