HOTELS in the Philippines can be optimistic about recovery in the long term as local tourism and staycations drive up demand, but most Asia Pacific investment interest this year is focused on other countries, JLL Philippines said.

The real estate services firm said that the hospitality industry was one of sectors most affected by the pandemic last year, yet Philippine hotel operators are optimistic that the industry would transition into recovery.

“Most hotel operators are trying to determine the best estimated return of airline traffic. Hotels definitely see tourism picking up as soon as flight restrictions are lifted — it is only a matter of timing, which is heavily dependent on the roll-out of the COVID-19 vaccine. Local tourism and staycations are also being encouraged to push demand,” JLL Philippines Head of Capital Markets Ryan Isip said in a press release on Wednesday.

“We are already seeing opportunities in the market for opportunistic acquisitions. Several groups are already looking for this type of transactions, typically management contracts in core locations,” he added.

Tourism revenues last year dropped 83% to P81.4 billion after pandemic-related restrictions prompted a significant decline in foreign visitors, the Tourism department said.

The Philippines again put up travel restrictions to arrest the spread of COVID-19, banning most foreign travelers from entering the country until April 21. The stricter lockdown in Metro Manila and nearby regions also restricts local travel.

JLL in January polled 100 of its clients, finding that 70% of investors are bullish on the Asia Pacific hotel market this year. The company estimates $7 billion in transactions this year, or 20% higher than 2020.

Interest is, however concentrated in Japan, with 52% of investors viewing the country as desirable for hotel investment. Investors are also interested in Australia (31%) and China (22%).

A quarter of investors are still cautious about deploying capital, JLL said, as they seek clarity on pandemic recovery before committing more funds.

“The past year has been all about protecting cash flow and this will continue for the coming 12 to 18 months. Seasoned owners realize that now is the time to invest in existing hotels, with little displaced business,” JLL Hotels and Hospitality Group Managing Director Xander Nijnens said.

“However, it is a balancing act in keeping operating costs flexible, while investing ahead of the recovery to edge in front of competitors and meet guest needs.

Mr. Isip said that JLL Philippines is optimistic about hotel investment in the Philippines in the long term.

“Acquisitions during this period should be opportunistic and investing while the hospitality sector is under pressure will yield good results in the long run.” — Jenina P. Ibañez