EVERY three months or so, busy bank manager Helena (not her real name) tries to spend a weekend vacation with her mom in various hotels in Metro Manila.
“It’s been just us since Dad died three years ago,” she said in Filipino. “And while I do live with her in our family home, sometimes I get home pretty late because of work, meeting potential clients and such. So I usually see Mom, either at breakfast or on weekends, which is why we do staycations.”
The last few staycations she booked with her mom, she said, have been hotels along the Manila Bay area. “We’re the same, Mom and I, we love the sea. So even if I can’t take her to the beach, at least we have the bay to gaze at. The views are amazing, especially at sunset!” Helena enthused. She added, her mother especially liked the fact the bay hotels are accessible to many shopping and dining options.
This staycation phenomenon is helping boost the profits of hotels in Metro Manila, according to a survey of global research firm STR recently presented before members of the Hotel Sales and Marketing Association Inc. (HSMA). A “staycation” is defined as a short vacation at home, or nearby hotels, and other accommodation establishments.
“With staycations on the rise, the average daily rate [ADR] of hotels in Metro Manila saw the biggest increase on weekends,” according to STR Business Development Manager for Southeast Asia Fenady Uriarte. ADR on weekends reached an average of P5,000 per night in the 12 months to May 2019, whereas in 2017 and 2018, it could barely hit P4,900 per night. “Metro Manila hotels show stronger weekend performance,” she underscored.
STR data also showed the Philippines has been posting “one of the fastest growth in the [Asia] region,” in the supply of hotel rooms, rising by 5 percent in the 12 months to May 2019, exceeded only by Vietnam at 5.4 percent. Uriarte noted this supply growth is keeping at pace with the 6.9-percent increase in demand for hotel rooms. (In contrast, demand for hotel rooms fell by 7.2 percent in Vietnam, despite its strong supply growth).
STR data collected showed, as of July 2019, “more than 10,000 rooms are expected in Metro Manila,” of which 46 percent are in the contract pipeline in Pasay and Muntinlupa, 25 percent are in Manila, and 15 percent in Quezon City.
Revenue per available room (RevPAR), calculated by multiplying a hotel’s ADR by its occupancy, has been healthy across all guest segments, rising by 5.6 percent for transients (short-stay guests), and 9.6 percent for groups in the 12 months to May 2019. In fiscal year 2018, RevPAR was flat.
“Occupancy remains the main driver of [hotel profits this year]…which is now in the 70s [percent], the highest for the last three years,” said Uriarte. Even regional hotels saw positive growth in RevPAR, rising almost 4 percent, the data indicated.
The STR report showing the increasing profitability of the hotel industry was well applauded by members of the HSMA, who are mostly directors of sales and marketing in hotels across the Philippines.
HSMA President Christine Ibarreta told the BusinessMirror: “We welcome the results of STR survey, which confirms many of our members’ insights. The bay area hotels are especially busy, which makes our industry optimistic that most of us will reach our targets this year. This can only bode well for the entire tourism sector as it continues to help power the country’s economic growth.”
While occupancy levels in Muntinlupa and Pasay City hotels have risen by 0.4 percent, its room rates have grown 5.4 percent, clearly showing the cities, which include Bay Area hotels, among the strongest profit performers. While hotels in Quezon City actually posted the largest increase in occupancy at 8.8 percent, its ADR grew the smallest at 0.6 percent, with Uriarte noting this as a “rate conundrum.”
Also, despite the 5.1-percent increase in occupancy among Makati hotels, its ADR has actually fallen by 1.7 percent in the 12 month to May 2019. Hotels in Manila, likewise, posted a 3-percent decrease in ADR, even as occupancy levels have slightly increased by 0.6 percent.
In other areas of the country, like Boracay, the highest hotel occupancy so far recorded by STR was 73.3 percent in February, most likely due to Valentine’s Day and Chinese New Year celebrations. But average year-to-date occupancy as of June was 56.8 percent.
Among Cebu hotels, Uriarte said “occupancy declined by 6.5 percent but ADR surprisingly grew by 6.1 percent.” This resulted in a dip in RevPAR by 0.8 percent in 2018.
She underscored, however, that the data both for Cebu and Boracay were generated from limited samples.
1 comment
What’s up, just wanted to say, I liked this blog post.
It was practical. Keep on posting!