THE Philippines has the largest pipeline of luxury and upper upscale rooms in Asia-Pacific after China, but industry watchers say what is needed is more branded accommodation that caters to its swelling domestic market.
According to data presented yesterday by STR Global area director – Asia, Jonas Ogren, about 50 per cent of the Philippines’ pipeline is in luxury and upper upscale, 30 per cent in upscale, 15 per cent in midscale and the rest in economy. This contrasts with its South-east Asian neighbours, whose pipelines of upscale and midscale rooms are as high as almost 70 per cent. The economy segment has the smallest pipeline across all countries.
Highlighting that the Philippines needed more supply in the middle, Narzalina Z Lim, president of Asia-Pacific Projects, a tourism and hospitality consulting company, said the country had about 35 million domestic travellers looking for affordable accommodation, with the figure growing by eight per cent every year and expected to hit 56 million by 2016.
The former tourism secretary of the Philippines said that since the government was in the midst of upgrading secondary airports to encourage direct flights from the region, hoteliers scouting for investment opportunities should consider locations “within an hour’s drive of these secondary gateways”.
These include hotspots such as Palawan, Cebu, Bohol and Davao, she said.
As for the popularity of China and India for future properties, hotel chiefs said these continued to be key markets, despite their challenges.
As of 2012, Asia-Pacific had 458,000 rooms in the pipeline, with the bulk headed for China (58 per cent), India (16 per cent) and Indonesia (seven per cent).
Speaking to TTG Asia e-Daily, Simon Cooper, president & managing director, Marriott International Asia-Pacific, pointed out that India’s lack of infrastructure was an issue.
“When you build a hotel, you need to build your own treatment plants, you can’t rely on 24-hour electricity and energy costs are also high.”
InterContinental Hotels Group chief executive, Asia, Middle East and Africa, Jan Smits, added that “developing talent” was his biggest concern, explaining that the company was investing a huge proportion of its resources in this area.
When asked if he was worried about last year’s negative RevPAR growth in China (-1.7 per cent) and India (-5.1 per cent), Smits said: “It takes a little time for demand and supply to catch up.”
In India, for instance, he explained that it was coming from a very low base. “It might have had one branded hotel in a city, then suddenly two or three…with such a big population, a huge middle class and 750 million domestic travellers, it’s all there.”
Thailand saw the highest RevPAR growth in 2012 (15.4 per cent), followed by Japan (13.2 per cent) and the Maldives (10.9 per cent). Singapore, Indonesia, Malaysia, the Philippines, Australia, South Korea, Hong Kong and Taiwan all posted single-digit growth. Vietnam, however, saw negative growth of 2.7 per cent.
Additional reporting by Lee Pei Qi
