Published on : Monday, January 2, 2023
Cebu hotels and resorts are projected to corner pent-up demand for the MICE (meetings, incentives, conferences, and exhibitions) market due primarily to revenge travel.
Joey Bondoc, Associate Director for Research at Colliers Philippines, said in his outlook for Cebu’s property industry that they see Cebu retaining its stature as a key business and leisure destination.
The revival of MICE activities and in-person events should help propel hotel occupancies and average daily rates in Cebu over the next 12 months.
Data from the Department of Tourism (DOT) showed that foreign arrivals as of Nov. 14, 2022 reached two million, already exceeding the full year target of 1.7 million arrivals.
The United States, South Korea and Australia were the top source markets during the period.
The DOT also reported that visitor arrivals from February to September 2022 generated P100.7 billion (US$1.7 billion) in visitor spending, higher than the P4.94 billion (US$8.4 million) a year ago.
Meanwhile, data from the Philippine Statistics Authority (PSA) showed that the tourism sector’s share to the country’s economy reached 5.2 percent in 2021 from 5.1 percent in 2020.
Domestic tourism expenditures also reached P783 billion (US$13.2 billion), up 39 percent year on year after reporting 37.3 million trips in 2021 (from 27 million in 2020).
DOT is optimistic that the removal of mask mandates will likely lure more travellers to visit the country.
In our view, this is likely to stoke demand for hotels across the country and help raise occupancies, Bondoc said.
However, the Philippine Hotel Owners Association (PHOA) is “cautiously optimistic” in 2023 as rising inflation, airfares as well as global geopolitical tensions are likely to affect customers’ travel decisions.
As travel demand recovers, Colliers Philippines believes that now is an opportune time for developers to consider bringing in foreign hotel brands. Hotel operators should also continue to innovate with their services and tap technology in enhancing customer experience.
Cebu is definitely among the major Philippine destinations that will capture gains from revenge travel, Bondoc explained.
Revenge spending to extend into 2023
In the retail sector, Colliers sees the approval of the amendments to the Retail Trade Liberalization Act (RTLA) paving the way for the entry of more foreign retailers in the country.
Colliers recommends that mall operators reactivate their event spaces or activity centers by organizing events such as trade fairs, exhibits, and concerts to attract more mall goers.
Colliers encourages developers with retail footprint in Metro Cebu to reassess the ideal sizes of upcoming retail developments as they welcome more consumers back to their properties.
Colliers believes that online shopping will remain popular as Filipinos continue to put a premium on convenience.
The property consultancy firm said this will likely complement brick-and-mortar shopping which they see receiving a boost from the dropping of mask mandates.
Colliers encourages mall operators and retailers to further strengthen their omni-channel strategies to support brick-and-click shopping.
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