The Philippine hotel industry has taken its first steps in restarting the business. More hotels in community quarantine zones have been allowed to open after months of limited operations.
While the same Filipino hospitality may be present as they greet guests back into their facilities, this may not be enough to meet the market’s needs under the new normal.
Health and safety protocols are what guests will look for now during their stay, apart from the warm welcome from hotels.
“There should be a greater emphasis on health and sanitation protocols and an aggressive adoption of technologies,” Colliers International Philippines research manager Joey Roi Bondoc said.
He said the Philippine hotel market remains attractive given its relatively cheaper rates compared to its regional peers.
Bondoc urged hotels to highlight their compliance with health and safety protocols.
“Colliers believes that hotel operators should closely monitor anti-pandemic efforts being implemented by the national government. For one, hotels should comply with the health and safety protocols being imposed by the Department of Tourism (DOT) and highlight their compliance to recapture demand once market sentiment improves,” he added.
As part of ensuring the implementation of health and safety protocols in the operations of accommodation establishments, the government requires these establishments to secure a certificate of authority to operate (CAO) from the DOT before operating in areas under community quarantine.
Data from the DOT shows that as of November, a total of 7,200 accommodation establishments have already been issued a CAO or a provisional CAO, which will allow them to operate under different quarantine classifications and cater to different types of travelers, depending on their location and purpose.
Apart from the CAO, four and five-star hotels in Metro Manila that intend to operate for staycation purposes are also required to secure a certificate of authority to operate for staycation (CAOS).
At present, there are 13 hotels in Metro Manila that have been granted CAOS.
Among these are Aruga by Rockwell, The Peninsula Manila, Sheraton Hotel Manila, Grand Hyatt, Makati Shangri-La, Okada, Shangri-La at the Fort, Nobu Hotel City of Dreams(COD), Joy Nostalg Hotel and Suites, EDSA Shangri-La, Solaire, Hyatt regency COD, and Nuwa COD.
Aside from securing the necessary authority to operate, the DOT has also issued guidelines on the new normal operations of hotels as well as staycation hotels, which focus on areas such as guest handling, rooms occupancy, housekeeping, food and beverage services, kitchen sanitation, and disinfection as well as business practice and management, among others.
TARGETING THE DOMESTIC MARKET
In an earlier report, Cushman and Wakefield Philippines urged hotels to create secure and COVID- proof accommodation facilities to tap the domestic tourism market in line with restarting the industry.
“With foreign visitor arrivals remaining out of the picture, restarting the hotel sector through domestic tourism could start from creating secure and COVID-proof accommodation facilities,” Cushman and Wakefield Philippines said in a property market news report.
“Restoring travel appetite among domestic travelers could take some time even if a number of accommodation establishments have been allowed to restart operations,” it said.
The DOT emphasized that the domestic tourism sector will lead to the industry’s recovery due to international travel restrictions still in place.
With the large size of the domestic tourism market, as the country registered 110 million domestic trips in 2019, Bondoc affirmed the domestic tourism market as a potential bright spot for the hotel sector.
“But this is unlikely to lift the sector in the next 12 to 18 months,” he added.
With domestic tourism demand projected to slowly begin recovery in 2021, Colliers said it expects average daily rates (ADR) to drop 30 percent by the end 2020 due to lower occupancy.
“We do not see a pick up in ADR over the next 18 to 24 months as the leisure sector continues to suffer from the global economic crunch and limited spending of local tourists,” Bondoc said.
Data from Colliers show that hotel occupancy in Metro Manila dropped to 25 percent in the first half of 2020, compared to 71 percent in the second half of 2019.
It added that most hotel guests during the lockdown, which started in mid-March, were returning OFWs, health workers serving as frontliners, professionals working in Metro Manila whose daily commute was limited by the suspension of mass transportation in the capital region.
Besides implementing health and safety protocols, Bondoc said it is now an opportune time for hotel operators to ramp up the technology to provide innovative services.
“Colliers believes that despite the pandemic, hotel operators should continue utilizing technology to enhance customer experience and customize accommodation offers,” Bondoc said.
“In our opinion, operators should expand these technology-enabled services aside from the typical keyless check-in, and 24/7 mobile connectivity and smart room control,” he added.
As the pandemic prompted establishments to adopt digital payment services, hotels are now required to provide cashless methods of payment, online transactions, and other options for contactless transactions to promote minimal physical contact, according to DOT guidelines.
Similarly, the World Travel and Tourism Council (WTTC) also cited the use of integrated technologies to enable automation such as contactless payments in its recommendations for hotels to achieve operational readiness for reopening under the new normal.
SAFETY PROTOCOLS FOR BUSINESS MEETINGS, CONFERENCES
Apart from accommodating staying guests, hotels can now cater to some demand from the meetings, incentives, conventions, and exhibitions (MICE) market as the government recently allowed some indoor business meetings and conferences in general community quarantine (GCQ) areas to resume but capped at 30 percent venue capacity.
In line with this, Tourism Secretary Bernadette Romulo-Puyat emphasized the need to implement health and safety protocols for MICE organizers and venues, including hotels.
“While the pandemic has taught organizers to embrace technology, some gatherings in a physical set-up can now proceed, with health and safety protocols in place. We are optimistic that the country’s MICE sector shall start to thrive again, with the support of the Department of Trade and Industry (DTI) in crafting the implementing guidelines,” she added.
In terms of indoor meetings, the DOT emphasized that the venues preliminarily allowed are restaurants in general; restaurants attached to hotels; ballrooms and function rooms within hotels; other venues which may be in a separate building but within the hotel premises and mall area.
Among the types of activities allowed are workshops, trainings, seminars, congresses, conferences, conventions, board meetings, colloquia, conclaves, symposia, and consumer trade shows.
However, social events such as birthday, wedding, Christmas and office parties, pageants, award events, gala receptions, shows, product launch events, political gatherings, cultural festivities, and sporting events are not yet allowed.
Hotel Sales and Marketing Association (HSMA) president Christine Ibarreta earlier welcomed the move of the government but emphasized that hotels would be happier if even social events were allowed due to the clamor for it during the holiday season.
“Hopefully, they can allow it as most Filipinos are better informed and educated on health protocols,” Ibarreta said.
NEED FOR SUSTAINABLE ROADMAP
As the government moves to help the hotel industry restart by allowing some operations such as staycations, indoor business meetings, among others, Cushman and Wakefield Philippines director for research, consulting, and advisory services Claro Cordero Jr. said earlier there is now a need for hotel developers and owners to prepare their strategic recovery roadmaps.
“For their part, the hotel owners and developers should similarly revisit their pre-pandemic business models to prepare for a more strategic recovery roadmap,” Cordero said.
He added that hotel operators and owners need to manage the cost since demand is still relatively unstable and unpredictable.
“This includes gradual re-opening and forming strategic supply chain agreements to ensure the uninterrupted and cost-effective provision of services such as hosting business meetings and conferences/trades, especially since a lot of the suppliers have also been severely affected,” Cordero said.
“Doing these will better assist the hotel owners/developers to prepare and ensure a gradual yet sustainable recovery for the industry,” he said.
Despite the easing of restrictions seen to aid the recovery of both the hotel and tourism sectors, Tajara Leisure and Hospitality Group president and chief executive officer Cyndy Tan Jarabata said it is important to understand that the recovery will be in stages.
“With easing restrictions, it’s important for hotels and organizers to promote safety protocols as the holidays are also coming up,” Jarabata said.
While it may take some time for the Philippine hotel industry to recover and return to pre-pandemic levels, the industry is taking the gradual steps it needs to restart the market. This, of course, is being done with a new appreciation for both its guests and employees’ health and safety to meet all the needs of the new normal.