BusinessWorld Online: Hospitality industry prospects

BusinessWorld Online: Hospitality industry prospects

Posted on June 26, 2013 08:35:19 PM
The View From Taft  – Reynaldo C. Lugtu Jr.

WE SEE it everywhere. Hotels — from boutique types to five-star ones — are rising all around us. The hospitality industry is poised to grow further this year and in the coming years as a result of the campaign of the Department of Tourism (DoT) to attract more foreign and domestic tourists. The country’s robust economic growth and stable political environment also contribute to strong occupancy rates.

With a stellar 7.8% growth in the first quarter, the hospitality sector is flourishing. A recent report of consulting firm C9 Hotelworks forecasts impressive growth and investment in the luxury sector with close to 6,000 rooms opening in the upper tier of the market over the next five years. This increase represents a 37% growth in the existing supply, which includes internationally known brands as Grand Hyatt, Shangri-La, Sheraton and Westin. Raffles and Fairmont opened recently, heralding the entry of other famous brands.

Consistent with these forecasts, Colliers International Philippines Research projects that more than 12,000 hotel rooms will be opening in the next four years. Moreover, the industry is expected to enjoy more than 70% occupancy rates due to the “aggressive overseas promotions” of the DoT. In fact, the department reports that arrivals for the first four months of 2013 amounted to 1,649,458 visitors, an increase of 10.12% over the year-ago volume of 1,497,851 covering the same months.

How can the country sustain this robust growth in the hospitality industry? It all boils down to the basics — spur domestic and foreign tourism. This can be achieved by sustaining the economic growth trajectory, maintaining political stability, and having a “well-coordinated tourism plan that will involve all stakeholders,” as advised by property management firm Jones Lang LaSalle.

The country’s economic growth may be impressive and the DoT’s “It’s More Fun in the Philippines” campaign may be effective, but we lack certain infrastructure support to make it easier for tourists to come.

For one, our airports have inadequate facilities. Foreign airlines are unable to schedule additional flights to Manila due to congestion at the Ninoy Aquino International Airport’ (NAIA). In fact, in its report, the Center for Asia Pacific Aviation (CAPA) ranked NAIA as the 34th busiest airport in the world last year despite its having being tagged as the world’s worst airport by an interactive Web site last October.

The report was based on reviews of travelers who also complained of “safety concerns, lack of comfortable seating, rude staff, hostile security, poor facilities, and no [or few] services to pass the time.”

Infrastructure and support services should be part of the overall tourism plan of the government to attract more tourists and sustain the growth in the hospitality industry.

We laud how the government through the Department of Public Works and Highways and together with the private sector is improving roads and highways to spur domestic tourism. In fact, the government is spending ₱29 billion ($700 million) — ₱12 billion this year and ₱17 billion in 2014 — on a tourism infrastructure program that will connect tourist spots to major roadways.

It’s going to be more fun in the Philippines after all.

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