PH boom fuels resurgence in luxury hotel market


Having the second fastest growing economy in Asia and a stable political environment, the Philippines experienced a surge in investments, particularly in the high end luxury sector of its hospitality market, according to a report by C9 Hotelworks.

In a recent report, the hotel industry consulting firm noted that escalating room rates and strong occupancy rates are also setting the stage for “dramatic future growth” of the sector.

“Step back in time three decades and hotel headlines would be surprisingly similar to those today,” C9 Hotelworks managing director Bill Barnett said in an interview. “Manila Bay is asserting itself as a tourism hub in Metro Manila, [while] a new business district flexes its muscles within the competitive hotel landscape.”

He noted, however, some key differences between the hotel boom of the present day and that of the past.

“This time around it is Manila Bay, featuring the evolution of Pagcor Entertainment City and Resorts World, while the new central business district is not Makati, but neighboring Bonifacio City,” he said. “This is the new storyboard of Mega Manila.”

With a gross domestic product growth rate of 7.1 percent in the third quarter, the Philippines is “enjoying a fast-tracked journey back to the future,” Barnett said, noting that the hospitality sector is one of the frontline beneficiaries.

C9 Hotelworks’ report points to an aggressive pipeline of growth and investment in the luxury sector, with a total of 5,797 rooms opening in the upper tier of the market over the next five years. This represents a growth of 37 percent to existing supply.

These new hotels will include the introduction, expansion or return of internationally renowned brands such as Raffles, Fairmont, Grand Hyatt, Shangri-La, Sheraton and Westin.

As an early indication of future trends, C9 Hotelworks’ hospitality research noted that overall average room rates already rose 6 percent in 2011, while occupancy of luxury accommodation stood at 72 percent during the same period.

In 2011, Metro Manila had a total of 15,567 hotel rooms, with 57 percent of these being in the upscale tier.

“Suddenly, there is now significant movement at the top end of the market where luxury supply grew at only 3.2 percent between 2004 to 2011,” the report pointed out.

Barnett said that the Aquino administration and the private sector could be credited with much of the growth by executing a coordinated and effective strategy of selecting a limited number of massive infrastructure projects to focus on. This strategy, in turn, has created major demand for luxury accommodation.

“Present day trading remains strongly leveraged with corporate travelers who, combined with the meeting and incentive segment, command 78 percent of total hotel room nights,” Barnett said.

Looking forward to 2013 and beyond, he added the urban spread of Metro Manila into new areas—such as Ayala Land’s acquisition of the sprawling Foot Terminal Inc. property in Taguig City—would create new hotel micromarkets, which could be good news for the hospitality sector overall.

“In the new Asian age, when the East is now embracing a rising and increasingly affluent middle class, even Donald Trump has come to the table with his luxury namesake brand in the new Mega Manila,” Barnett said.

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  • opinyonlangpo

    The hotels in the Philippines stinks although they are much much more expensive than their counterpart in other countries category wise. Most of the materials in the hotels have aged and still being used, they are probably good when new but now they should be replaced. Most needs to be refurbished and probably the hotels upgraded. The tourism department probably never got a chance to stay in hotels abroad so they don’t know what standards to level with. Hopefully the new luxury hotels will be comparable abroad. A three or four star hotel in the Philippines will not even get a star abroad.Anyway, they are probably designed to cater to vacationing OFWs or balikbayans, they will understand.

    • kulittwit

       Stupid remark. Generalizing is never a good statement. Nobody will believe all hotels in the Philippines stink.

      • opinyonlangpo

        Here is one of them. Try to stay in hotel in Singapore, Vienna, Berlin, Geneva, Dubai then compare with the hotels here pricewise and quality wise.

  • zombie77

    The economy should have taken off  more than a decade ago if not for a lot of selfish,corrupt politicians,  confused and directionless government policies, wrong government priorities,etc.
    The private, government and non – government sector must work harder to achieve more balanced growth…..not only in Metro Manila (where most of the growth appears to be)….but also in the far-flung provinces throughout the country.

  • blainz

    Very good development. This will employ a lot of HRM graduates, who will then be under less pressure to start their careers abroad.

  • Klepto

    Booming ang prostitution kaya maraming short-time motel ang itatayo

  • Roger

    Matagal na sana itong ganitong sustained growth under pa ni PGMA kung hindi land talaga massive mmanggulo ng political scene ang mga opposition that time…

    • ADD

      Massive din kasi magnakaw ng kaban ng bayan si GMA, her family and her cronies kaya massive ang gulo sa political scene. If she only used her intellectual and political brilliance for the good of the country, she would have been better that Cory Aquino.

  • koolkid_inthehouse

    Right now we have a dedicated President and investors are betting on him to make this country raise the bar.  What will happen after his term is over.  The investment will collapse with the economy.  Philippine need a good lawmakers not these donkey holes in congress and senate. 
    Imagine movie actors, comedians, entertainers, drug lords, convicted criminals comprised of our political systems.  Hilarious. 

    Its our fault, WE gullible Filipinos, we will remain trampled poor.

    • ADD

       That’s why don’t vote for Binay para hindi tayo bumalik sa dati.

  • mannager

    Good news also to corrupt politician more blessing to come ..

  • Ben

    But the work has just begun, we can not procrastinate if we really care about the future and the country`s sake and her people….. it is not good news until plans becomes a reality with hard facts. When PPP costructions are started, when the GNP is already breached the 8% growth to clearly help the majority of masses to middle income status, when the jobs domestically outstrip the growth of OFW exodus, when electricity becomes cheaper, when fllodings in major population centers are already prevented in response to climate change….and when RH bill is signed into a law (although the effect of this will be in the future at least the future can be seen clearly now), and the amendment of the constitution to unleash our full potential in attracting and retaining high end investments especially research and development being set up in our country.

  • 12JEM

    Westin is coming!

  • efriend

    Good news Pilipinas!

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