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International luxury hotel operators gravitate to PH

/ 12:34 AM March 01, 2014

TO FURTHER accommodate the growing number of visitors, more hotels are slated to be constructed within Newport City by 2016.

Marco Polo Hotels, Ascott The Residence, Maxims Genting, City of Dreams, Solaire Resort and Casino, Hyatt, Marriot Manila, Shangrila Hotels and Resorts, Conrad Hotels and Resorts, The Westin Philippine Plaza Manila, Hilton, Sheraton Hotels and Resorts.

These are just some of the international luxury hotel operators that would either come into the country or experience boom times from 2014 to 2017, as forecast by CBRE Philippines during a Jan. 23 press briefing in Makati. It also reported that luxury hotel accommodations would play a major role in the hospitality sector, and that MICE (meetings, investments, conventions and exhibits) locations would pick up their businesses, and gaming establishments would draw in more foreign guests.

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Property analyst Enrique M. Soriano III said, “Retail and hotels will likely post solid growth as employment and spending in the domestic front continue.”

The Colliers International market overview (for 4Q 2013) predicted that in the next three years, up to 4,300 rooms would be “delivered” annually, the highest number since 1988.

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“Meanwhile, local real estate firms are entering the hotel and leisure sector, as SM Prime Holdings, Ayala Land and Robinsons Land introduce their new projects slated for completion in the next three years,” noted Colliers International Philippines Research. It added that last year, 1,372 new hotel rooms opened in Metro Manila, bringing the total room inventory to 17,517.

More branches expected

Jones Lang La Salle, in its JLL 2014 property market monitor, singled out Robinsons Land Corp. (RLC), which recently opened its seventh Go Hotel branch in Iloilo City. This one has 167 rooms

JLL forecasts more of such branches to be built over the next few years as RLC has offered the brand for franchise. In particular, Singapore-based Vanguard Hotels Pte. Ltd., in partnership with Roxaco Land Corp., is set to construct at least five new branches in the next two years.

JLL also cited residential property developer Vista Land & Lifescapes Inc., which plans to venture into hotel and resort development. According to the firm, the planned venture is mainly supported by the strong performance of the tourism industry. The firm has formed a new unit that would focus on the development of hotels and resorts, likely starting in 2015.

40% at Entertainment City

Colliers International Philippines’ comprehensive report indicated that of the 4,120 rooms to be completed in 2014, more than 40 percent would be concentrated within the Pagcor Entertainment City, such as Belle Grand City of Dreams (920 rooms) and the surrounding Mall of Asia Complex, such as Radisson Hotel (500 rooms) and Tune Hotel (204 rooms).

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It also revealed a new player in the hotel and leisure market—Shanghai Jin Jiang International Hotels—one of the leading hotel groups in China, with two projects slated for turnover in 2014, the Jin Jiang Inn Ortigas (95 rooms) located beside Richmonde Hotel and the Jin Jiang Inn Greenbelt (70 rooms) located opposite New World Hotel Makati.

“As the government strives to reach its foreign tourist arrivals target of 10 million in 2016, local real estate firms are joining the hotel and leisure sector to augment the accommodation needs of foreign travelers,” reported Colliers.

It added that the Carlson Rezidor Group had partnered with the SM Hotels and Conventions Corp. (SMHCC) to launch the 150-room Park Inn by Radisson in Clark, Pampanga. This project is set for completion in 2016.

Colliers also observed that Ayala Land, through its hotel and resort corporation, had launched two new Seda hotels in its emerging mixed-use developments in Vertis North and Circuit Makati, both of which would be operational in the next three years.

RLC, for its part, aims to complete 1,200 rooms in its portfolio by 2014 by launching three Go Hotels—one in Ortigas Center, another in Butuan and one in Iloilo.

Decreased layovers

CBRE reported an 11-percent growth rate of tourist arrivals as of October 2013 (year-on-year) and possibly exceeding 4.5 million for the whole year.

Despite the increase, it estimates that the average hotel occupancy rate dipped from 67 percent in 2012 to 64 percent in 2013.

CBRE said: “This may be attributed to the increasing number of international flights to airports outside of Manila, thereby reducing the need to layover in Manila and easing the access to other major tourist destinations in the country like Boracay Island. The Mactan Cebu International Airport Authority, manager of the second largest airport in the country, reported a 15-percent increase year-on-year in the number of international flights at the airport from January to October this year from 3,972 to 4,581 flights.”

Hotel rates

Colliers also reported that growing interest in the Philippines as a tourist destination and a business investment option has been driving hotel room rates to consistently increase in Metro Manila.

It pointed to the trend that average five-star room rates had grown by 3.7 percent to $333 per night in the second half of 2013, versus the 1.1-percent increase in the first half of that year. Four-star room rates increased slightly by 1.1 percent in the second half to $273 per night.

On the other hand, three-star room rates continued to improve significantly at 9.5 percent half-on-half, 250 basis points higher than the 7-percent growth posted in the last period. This can be attributed to the increasing number of local and foreign tourists seeking quality accommodation at affordable prices. Meanwhile, corporate rates grew considerably across all classifications at an annual average of 15 percent.

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