Broad indicators in the global tourism industry, including arrivals, flight capacity, and hotel occupancy rates, are anticipated to finally recover to pre-pandemic levels by next year, according to real estate services firm Leechiu Property Consultants Inc.
Industry stakeholders should thus look out for certain trends that can significantly impact the Philippines in the coming year, including the relaxation of visa restrictions, persistent high airfares driven by escalating aviation fuel costs, ongoing inflation, a high-interest rate environment that may leave consumers with diminished purchasing power, as well as the return of business travel and meetings, incentives, conferences, and exhibitions (MICE) events.
Promising outlook
The third quarter of 2023 alone already revealed a promising outlook on the Philippine tourism sector, with the number of international tourist arrivals reaching 4.038 million as of end September. This places the Department of Tourism (DOT) at an impressive 84 percent of its 4.8 million international tourist arrivals target for 2023.
Despite substantial recovery from key source countries like South Korea, the United States of America, and Australia, the Philippines has yet to reclaim more than 50 percent of its 2019 tourist numbers from Japan and China.
China’s relatively low recovery rate can be attributed to multiple factors, including limited international flight capacity, which currently operates at only 50 percent of its pre-pandemic levels. Meanwhile, the reduced number of Japanese tourists year to date may be linked to a 32-year low for the Japanese Yen, falling below 150 per US dollar, among other concerns.
Private sector investments
To sustain the growth in the Philippine tourism industry, there’s a pressing need for greater private sector investment in additional hotel accommodations. Initiating these investments within the next year is critical to fortify international tourism beyond 2027.
Currently, a development pipeline is in place, with nearly 15,000 new hotel rooms expected to be delivered within the next five years, primarily concentrated in Metro Manila. Moreover, additional hotel projects are anticipated to be announced in the coming months or years, aligning with the DOT’s target of 12 million international arrivals for 2028.
The development of hotels in key cities such as Cebu, Clark, Davao, Bohol, and Palawan highlights the pivotal role of international airports in driving demand for hotel accommodations.
For instance, the establishment of the Bohol–Panglao International Airport in 2018 and the installation of night instrumentation in 2019 have significantly boosted tourist arrivals in Panglao. In 2019, Panglao reached an impressive 1.58 million visitors, coming close to Boracay’s 2.034 million arrivals during the same period.
Premier tourism destination
Given these promising figures, it’s becoming increasingly likely that Panglao Island could surpass Boracay Island as the Philippines’ premier tourism destination.
Alfred Lay, director for Hotel, Tourism, and Leisure at Leechiu Property Consultants, highlighted a key advantage of Panglao over Boracay: its larger size and capacity limits. He also pointed out the ongoing developments in Panglao, including the proposed 50-ha Panglao Shores project, the upcoming JW Marriott hotel, the Cebu-Bohol bridge, and large-scale energy initiatives designed to meet Bohol’s growing energy demands.
These developments have had a significant impact on land values, with Alona Beachfront properties now priced at approximately P80,000 to P120,000 per sqm, approaching the land values in Boracay’s white beach area.