Tourism industry attracting major hospitality players

Part One

THE country’s tourism industry has attracted several players such as Southeast Asia’s largest value hotel and India’s largest hospitality company to serve the burgeoning market.     

In their recent study, integrated real-estate service provider Santos Knight Frank said tourism continues to generate interest among investors. Department of Tourism data indicated that foreign tourist arrivals grew by 7.6 percent in the first quarter of 2019 to 2.2 million—the majority coming from South Korea (24 percent), China (21 percent) and the United States (13 percent). The DOT also noted that Filipinos also showed as a strong market for the industry with 60 million domestic trips made by locals every year.

RD Plus at The Ridge Tagaytay City

SKF also noted major destinations such as Manila and Cebu have experienced an increase in the number of new hotels which will cater to expected growth demand. The company also said Manila has the biggest number of upcoming hotel rooms with 6,970 in the pipeline until 2023, concentrating mainly in the Bay Area, Makati, Ortigas and the Bonifacio Global City.

Meanwhile, Cebu has at least 3,806 rooms in the pipeline until 2023, the majority of which will be in Lapu-Lapu City. Two integrated resort developments—Isla dela Victoria and Emerald Resort and Casino—are expected to increase tourism arrivals in Cebu.   

Moreover, the emergence of new technologies has made traveling more convenient to a critical mass of travelers.

Oyo One Liberty Hotel

RedDoorz Chief Operating Officer Rishabh Singhi said the company has been keeping a close eye on the Philippine market even before the official launch of the brand in the Philippines. 

“There were 42 million domestic tourists in the country in 2018, which means over three-fifth of Filipinos [15 years old and above] have visited a local destination. Moreover, with a median age of 23, the market is young and digitally savvy. These all point to a very vibrant outlook in the budget accommodations sector which RedDoorz plays in,” he said.

Meanwhile, Oyo Philippines also expressed optimism on the country’s tourism market. In a separate e-mail interview, Oyo Philippines Country Head Ankit Arya noted that the best is yet to come for the country’s tourism sector. He said the 7.1 million tourists that visited the country last year and early 2019 are clear indication that country’s rich heritage, several tourists attractions, lively activities and warm hospitality of the Filipinos are factors that attract both local and foreign tourists,  

RD San Fernando

“Alongside the Department of Tourism’s relaunch of the ‘It’s more fun in the Philippines’ campaign as part of the government’s proactive move to further strengthen the industry, the country’s tourism sector is surely set to reach greater heights. We, at Oyo Hotels and Homes, started our journey in the country in early 2019 and have seen a tremendous response to our offerings,” Arya said.

Having bullish attitude on the country’s tourism, Oyo Philippines aims to invest over $50 million as part of their expansion road map to transform the country’s hospitality landscape while tapping the huge potential in the travel and tourism industry.

“We are also committed toward creating over 1,000 job opportunities in the Philippines by 2020 while expanding our footprint to 10+ cities nationwide and adding 20,000 exclusive keys to Oyo’s chain of hotels. All our efforts are aimed at enriching the experience of travelers across the Philippines by offering a hospitality experience they can trust, using intelligent technologies to bring innovation to the heart of the guest experience,” Arya pointed out.

Moreover, the entry of RedDoorz and Oyo in the local hotel scenario has boosted the capabilities of local budget hotels.

Since partnering with RedDoorz, local partners increased occupancy after working with them. On the average, they reach 80 percent occupancy within three months of working with RedDoorz.

He said RedDoorz provides 24/7 customer service and state-of-the-art technology to their partners without any additional fee. “This enables them to have a better perspective of their day-to-day operations.”

Singhi noted their partner engagement programs also ensure that staff is kept motivated through team building activities and other programs such as free meal Fridays and other perks. RedDoorz also provides upskilling programs through consistent trainings. In March this year, RedDoorz conducted a training seminar for almost 100 properties across the country.

“With our global brand and local presence in four countries, partner hotels do not have to worry about the marketing side anymore. They are able to reach and have access to customers all over the world,” he added.

“I now have more time for my family,” one of the owners even said to us. “This is a great cause that they now have more time for other things that matter.”

The 35 and below age group is a rich market for RedDoorz comprising almost 80 percent of the client base. He said these young aspirational millennial customers are just looking for basics done right when it comes to accommodations. Ninety percent of them are locals. When it comes to budget accommodations, they really just want to have standardized expectations.

 For Singhi, local hotels just need to get the basics right and with the technology and global brand to enable to deliver a better experience for their guests.

 As far as Oyo Philippines is concerned, the country is one of the richest and most vibrant globally in terms of tourism. Aside from its natural beauty, the relatively low cost of hotel accommodations, its friendly and well-trained work force who can fluently converse in English to accommodate foreign tourists, and ample state support are just a few factors that continuously boost the local tourism.

Along with these drivers, Oyo observed the Philippines is expecting to exceed 10 million foreign arrivals by 2027 and total visitors is forecasted to grow by 3.4 percent this year to 5.4 percent per year through 2028 according to the World Travel and Tourism Council. With this development, about 3,400 rooms are expected by property consulting firm Colliers to be added to Metro Manila’s current supply of about 24,000 rooms. Overall, the country’s robust tourism sector is spurring the hospitality industry.

For the first quarter of 2019, Arya said Oyo Philippines has grown its chain to more than 52 hotels and are looking at adding 20,000 exclusive keys by the year 2020. With the country’s tourism and hospitality industry growing at an optimistic pace, Arya said Oyo is working closely with every asset owner in its chain, providing them with the operational capabilities and technology that enables them to deliver an experience that’s on a par with big hotel chains.

On an average, Arya said every hotel that becomes a part of Oyo’s chain has experienced an increase in the occupancy from 25 to 65 percent in a brief span of three months. “We’ve been able to deliver the same performance in the Philippines too and will continue to drive quality-assured experiences for travelers at an affordable cost while increasing the yields for asset owners,” Arya said.

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