REAL-estate activities will be brisk in the tourism sector, as hotel properties see possible changes in ownership and rebranding.
This was the conclusion of Rick Santos, chairman and CEO of Santos Knight Frank, which recently organized the webinar “Hotel Industry: Through and Beyond Covid-19” with the British Chamber of Commerce Philippines. “Covid-19 has created a ‘Double Black Swan’ global event with tremendous impact on the Philippine tourism and hospitality sector. Agility is crucial for hotel companies during these volatile times. We expect to see a lot of real-estate activities in the hotel sector, such as buying, selling, financing, valuation, and even rebranding.”
So far, Marco Polo Davao has announced its closure this June, while a few branches of the Victoria Court motel chain are being shuttered due to the Covid crisis. Also, there is talk that Marriott International is looking to take over Sheridan Beach Resort in Palawan.
Santos recommended that hotel owners “explore bank and nonbank real-estate financing that would help their businesses cope in this environment. This will certainly be a period of creativity and new ideas.” Many hotels are in the midst of upgrading their facilities and investing in improving their health and safety protocols to fight against Covid-19 infections.
Commercial banks are expected to further cut their lending rates, taking their cue from the easing monetary policy of the Bangko Sentral ng Pilipinas, in a bid to spur the economy. Also, the Board of Investments has already made available tax incentives for tourism stakeholders who are improving their facilities to this purpose. (See, “BOI approves tax perks to help tourism enterprises in upgrade,” in the BusinessMirror, June 11, 2020.)
According to data from the real-estate company, prior to the Covid-19, there were 7,078 hotel rooms in the pipeline from 2020 to 2023. Post-lockdown, there are only 6,845 rooms in the pipeline from 2020 to 2024, indicating a delay in construction and possible rethinking of investments. These are upcoming hotels, three-star and up, and within central business districts of Metro Manila. During said webinar panelists from the hotel sector indicated revisions in their capital expenditures and hotel openings. (See, “Hotels revise capex due to Covid-19,”in the BusinessMirror, June 25, 2020.)
Pinoys heading to the beach
Meanwhile, Filipinos will be heading to the beach and will likely be traveling in smaller groups, according to results of a Department of Tourism (DOT)-commissioned survey, which were revealed by Tourism Secretary Bernadette Romulo Puyat in the same webinar.
“Based on the preliminary results of a survey we launched with Guide to the Philippines and the Asian Institute of Management, the number one activity that people are looking forward to is ‘Sun and Beach.’ Following this is road trips, which is in line with how we foresee the gradual reopening of tourism. Traveling by land, to nearby destinations, will be the primary mode of transportation in these early phases.”
She added, “Travel distances will initially be short and most likely intra-municipality or intra-province. Eventually, domestic travelers will go farther distances and start taking flights once made available.”
The survey also noted, in the short and medium term, a tourist’s behavior and expectations will hinge on the following:
■ Health and safety will continue to be the primary consideration in travel decisions. Travelers will ask detailed questions on the situation in a destination or establishment, and availability and proximity of medical facilities and services.
■ There will be increased utilization of digital platforms in securing information on travel options, booking flights and accommodations, and transacting in general. This is part of the shift to cashless and contactless transactions.
■ More consumers will prefer small group but high-value, experiential travel. As physical distancing protocols must continue to be observed, there will be less of the mass groups that we saw prior to the pandemic. The rest of the survey results will be unveiled in a special presentation by the DOT and AIM on Monday.
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