Hospitality Real Estate Propped up by Revenge Travel

Revenge travel is real.

As the country eases mobility restrictions, domestic travelers are fueling the demand for hotel occupancies and leisure-related spending, according to Colliers’ recent report. Similarly, the property consultancy firm sees growth opportunities with foreign arrivals gaining momentum.

Growth in Hotel Occupancy Figures

Based on the report, hotel occupancies in the capital region reached 47 percent in the first half of 2022, an increase of three percentage points from the second quarter of 2021. 

Various factors contributed to this growth, including the resumption of business travel, especially among investors conducting due diligence, as well as the huge volume of foreign arrivals. 

Colliers cited the Department of Tourism (DOT)’s data, which revealed that foreign arrivals reached 814,144 as of H1 2022, a massive growth of 1,2999 percent from the 58,177 international tourists recorded last year. The government agency estimates that foreign arrivals will hit two million this year, a dramatic increase from the 163,879 documented in 2021.

Similarly, local travelers spending on leisure fueled the growth in hotel demand in the first half of the year. Colliers projects that leisure travel will be at the forefront of hospitality industry recovery. 

Both the increased interest in staycations and foreign travel will fuel hotel occupancy for the rest of the year, according to the property firm.

Meanwhile, industry stakeholders predict that the domestic tourism sector will reach pre-pandemic levels by 2024, Business World reported. However, they recognize that high inflation, coronavirus and other health challenges, as well as political conflicts overseas, may disrupt demand.

Average Daily Rate Inches Up

Colliers reported that the average daily rates (ADRs) grew by 5.4 percent in the first half of the year from a 4-percent growth in the second half of 2021. Colliers estimates that the rates will grow by 8 percent this year, as local and foreign demand bounces back.

By classification, the average daily rate of three-star hotels went from P3,480 in the second half of 2021 to P3,563 in the first half of 2022. Four-star hotels increased from P4,738 to P4,760 in the same period mentioned, while the five-star hotels’ ADR reached P9,689 from P8,361.

According to Colliers, introducing flexible pricing can help entice business and leisure travelers.

They also recommend offering flexibility in terms of free cancellation and upgrade policies. This can especially attract business travelers who are on a longer stay conducting due diligence and foreign leisure travelers who go to Manila before visiting tourist spots in Visayas and Mindanao.

Home as a Relaxation Destination

Against the backdrop of pandemic-influenced tourism trends, including revenge travel and staycations, the very concept of home changed. 

Top property platform Lamudi has seen the shift as early as 2020, at the height of the pandemic. According to this report, properties for sale in leisure destinations Antipolo, Lapu-Lapu, and Tagaytay recorded a significant increase in leads from the second half of 2019 to the second half of 2020. The preference for tourist-favorite locations continued to be a prevailing trend.

In the second quarter of 2021, leisure destinations, such as Siargao, Bohol, Boracay, and Zambales became top-searched destinations on the Lamudi platform. This trend was attributed to property seekers prioritizing health and looking for a sense of balance, as they became more open to remote work culture.

Aside from location choices, the amenity preferences of property seekers point to the changing demands for a home. In the first quarter of 2021, as people were easing into the new normal of quarantine protocols, self-care amenities, those that promote wellness and leisure, emerged as the most popular amenities on the Lamudi platform

Property seekers’ location and amenity priorities point to the shift in residential preference, transitioning from places of quiet residence to vacation destinations. This real estate trend is one of the key topics that will be discussed in depth in the highly anticipated The Outlook 2022: Philippine Real Estate Conference, happening on August 31, 2022. 

Under the track The Home as a Relaxation Destination, prominent personalities will tackle what amenities attract buyers and renters amid the pandemic, how Filipinos redefine value for money, and which locations are emerging as workcation hotspots. 

Those interested in joining the conference can book tickets here.

Sources: Colliers, Business World

Photo via DepositPhotos

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