With international travel restrictions still in place and domestic tourism yet to take off, catering to the leisure market remains a challenge for hotels in Metro Manila.
This is why most hotels are turning to the repatriated Overseas Filipino Workers (OFWs) for occupancies.
Despite this move, hotel occupancies Metro Manila remained subdued in the second half of 2020 as it further dropped to 20 percent from 25 percent in the first half of the year, according to a report by Colliers International Philippines.
“We have observed that the arrival of several thousand OFWs in H2 2020 was unable to lift hotel occupancies,” Colliers said.
Colliers said several hotels have been converted into quarantine facilities for front-line medical workers and repatriated OFW, in response to the growing number of COVID-19 cases in the country.
“In our opinion, hotels are likely to remain as quarantine facilities, as tourist and leisure groups are still cautious of travelling due to the pandemic,” Colliers said.
“Hence, we see average occupancy reaching below 30 percent by the end of 2021,” it added.
In an earlier webinar, Jones Lang Lasalle Philippines head of research and consultancy Janlo de los Reyes interim demand from the repatriated overseas Filipion market continues to buoy the hospitality sector across segments.
“The demand that’s really driving the hospitality market is really coming from this interim source of demand,” de los Reyes said.
This sentiment was echoed by STR area director for Asia Pacific Jesper Palmqvist in a recent webinar, as he stressed that hotel occupancy in Metro Manila hotels remains to be driven by repatriation of Filipinos as well as the use of hotels as quarantine facilities.
Palmqvist said occupancy levels are likely to remain the same this year as no new source markets of occupancy are likely to be gained as travel restrictions continue in the country.