HOTELS in Metro Manila are slowly recovering their footing, with average occupancies and room rates on an uptrend.
In a webinar with members of the Hotel and Restaurant Association of the Philippines, STR’s Business Development Manager for Southeast Asia Fenady Uriarte said that while “Hospitality is still in a fragile state now [due to Covid-19 travel restrictions],… we are now seeing some green shoots in occupancy, especially in the Metro right now, [starting] September and October.”
Data gathered by STR showed that as of November 23, “Occupancy is reaching almost 50-percent levels and the rates might look a little bit steady, but there is a slightly upward trend.” From August 2020, when the average daily rate (ADR) was about P2,500, room rates are now close to P3,000 per night. STR is a global market research company focused on travel and tourism.
Among hotels in Metro Manila, those in Manila are benefiting the most from their hosting of returning Filipinos and returning overseas contract workers, with average occupancy having reached 70 to 80 percent as of October 2020. Hotels in Quezon City followed with a 55-percent average occupancy, then Makati at 45 percent to 48 percent.
“Now, what’s a little bit challenging for Ortigas and Mandaluyong [hoteliers]? It’s still not far from the other sub-markets, but [they] are slightly lower towards 37 to 38 percent for occupancy levels,” she said.
In terms of profitability, hotels in Ortigas and Mandaluyong were able to cut their losses in the week of October 30, with revenue per available room (RevPAR) having dropped by 60 percent, compared to the week of October 24, with RevPAR having dropped by 70 percent. In contrast, while hotels in Manila were seeing higher occupancies, their RevPAR was down by over 50 percent in the week of October 30, compared to 40 percent down the week before.
Looking at the data, Uriarte noted, “It may not be the best percent occupancy levels or rates, but at least there are some green shoots of hope…. We are now looking at the final [run]; we need to open the hotels. We have seen some staycations already being boosted by the DOT [Department of Tourism]. There are also borders opening that we also need to consider, but there is a vaccine obviously, that we are already about 90 percent. So there’s a glimmer of hope now.”
She underscored the need for guests to feel safe whether in a hotel or restaurant. Thus she advised hotels to “make it simple for everyone. Hotels are now collaborating with the testing facilities and putting that as part of the [hotel] package. Hopefully this can give a little bit of boost in terms of pushing demand for your particular hotel.”
She also advised hotels planning for their budgets next year, to consider that an additional 27,000 rooms from new hotels will be added in 2021.
In reaction to STR’s presentation, HRAP President Eugene Yap told the BusinessMirror, “We shall continue to comply with health protocols and the guidelines as set forth by the IATF-EID [Inter-Agency Task Force for Emerging Infectious Diseases]. Since the overall infection has been decreasing, increased consciousness is still practiced by our employees and guests. We will have to be transparent in our employment commitments for a better understanding of the establishment’s financial situation.”
He added, “Even if there is no vaccine available yet, the industry should continue to practice all health protocols. We also need to inform the guests of our safety and cleanliness requirements so that the guests may also be ready when business moves to the new normal.”
Due to inadequate data, STR couldn’t present performance indicators for hotels outside of Metro Manila, although Uriarte said, the situation in Cebu was “not pretty because we are seeing below 20 percent occupancy levels for at least those operating hotels.” Many hotels in Boracay and Bohol were closed, however.
The DOT and tourism stakeholders are hoping the industry will get a shot in the arm with balikbayans (homecoming Filipinos), along with their spouses and children, now allowed to visit the country, visa-free. Some balikbayans interviewed by this paper, however, nixed the idea of coming home for the holidays on health and safety concerns. (See, “Overseas Filipinos not keen on Christmas homecoming,” in the BusinessMirror, December 1, 2020.)