The hospitality sector is seeing a continued increase in accommodation infrastructure which is projected to rise to 2,587 rooms between 2025 and 2029.
In the latest property report released by JLL Philippines, the hospitality sector is expected to post sustained growth owing to increasing tourist arrivals and additional supply coming in.
At least 74 percent of incoming supply will come from the economy and mid-scale segments, driven largely by foreign operators such as Marriott, Ascot, and Radisson, while 26 percent is coming from local operators such as Ayala Land.
“The influx of foreign-operated hotels will strengthen the market, especially in the luxury and upper-upscale segments,” said JLL head of research and marketing Janlo de los Reyes, highlighting the expanding retail and hotel developments across Metro Manila as a key growth driver for the hospitality industry in 2025.
The report noted that Makati remains the prime location for new hotel openings, with key developments like Seda in One Ayala, and Radisson Service Apartments contributing 751 new rooms.
Despite a shortfall in the government’s target for tourist arrivals in 2024, which reached 5.9 million versus the 7.7 million goal, the hospitality sector showed positive growth.
Tourist arrivals increased by 9.2 percent compared to the previous year. However, the decline in Chinese tourist arrivals, from 1.7 million in 2019 to just 300,000 in 2024, posed challenges.
De los Reyes remained optimistic about a recovery once the suspension of e-visas is resolved.
The hotel sector, meanwhile, saw a healthy occupancy rate of 83.2 percent, bolstered by strong demand from leisure travelers, including those attending corporate events, weddings, and staycations.
Though a slight dip in occupancy is expected in early 2025, it is anticipated to pick up again in the fourth quarter, in line with typical seasonal trends. Occupancy rates were particularly high in luxury, upscale, and upper-upscale properties catering to leisure travelers.
In terms of pricing, average room rates have continued to rise, with the current average at P8,100 per night. This is expected to increase further to P8,300 to P8,400 by the end of 2025, driven by new supply in the upper and upscale segments.
“We expect that the recovery in tourist arrivals will continue into 2025, boosting the hospitality sector and contributing to the overall recovery of the real estate market,” de los Reyes said.
