Property & Infrastructure
Niche marketing, good location success factors for hotels, says Colliers Philippines
Hotels that cater to a niche market or are in advantageous locations will continue to perform well as against those in saturated areas that will have difficulty to survive, an analyst said.In a recent interview, Richard T. Raymundo, Colliers International Philippines, Inc. director for the research and consultancy, said that while hotels in the Makati central business district continue to do well, those in the Manila bay area are having a more difficult time.
"I don’t like to generalize that the whole hotel market is doing very well. There are locations that are doing better than others," he said.
He noted that hotels in the Makati business district are 75% to 80% occupied and have increasing room rates as against those in the bay area.
Data from the Tourism department show that in the capital, Pan Pacific Manila, which has 236 rooms, has the highest occupancy rate among accredited de luxe hotels -- at 86.1% as of July from 84% year on year.
The Westin Philippine Plaza, meanwhile, had an 80.64% occupancy rate, better than the previous year’s 77.57%.
Other hotels in Manila, however, did not fare as well, with Century Park Hotel having an occupancy level of 63.33% from 64.01%, and Hyatt Regency Manila at 67.23% from 56.99%.
Manila Diamond Hotel, meanwhile, had an occupancy level of 75.6% from last year’s 65.28%, Heritage Hotel Manila was 75.8% occupied from 70.67%, while Manila Hotel had an occupancy rate of 62.91%, an improvement from 2004’s 40.01%.
Vivere Suites suffered a decline in occupancy to 40.99% from 71.75%, while the new Hyatt Hotel and Casino Manila was 39.54% occupied as of July.
In Makati, the New World Renaissance Hotel had the highest occupancy rate at 85.15% from 84.11%. Makati Shangri-La was 83.12% occupied from 72.61%, Mandarin Oriental Manila was at 81.9% from 80.72% and Dusit Hotel Nikko was 82.37% from 75.7%.
Hotel Intercontinental Manila was 76.53% occupied from 73.50% last year, while the Peninsula Manila was 80.64% occupied from 77.57%.
The Bellevue Manila in Alabang, Muntinlupa City did well at 74.37% occupancy rate, while EDSA Shangri-La Hotel and the Holiday Inn Galeria Manila, both in the Ortigas (Pasig City) business district, had occupancy levels of 72.37% and 72.8%, respectively.
Mr. Raymundo said new hotels that are being constructed, such as the Marriott Hotel that publicly listed Megaworld Corp. is putting up at the Villamor Air Base in Pasay City, must have value propositions to be more attractive to the hotel-going market.
"The Marriott is near the airport. It makes sense because we don’t have an airport hotel in Manila," he said.
He added that those being constructed on Boracay in Malay, Aklan will likely do well given the sheer number of visitors that flock the island practically all year round.
"People are noticing that this is the fastest growing domestic location and during peak season, resorts are running at full occupancy," Mr. Raymundo said.
He noted that the Manila bay area may no longer be able to accommodate additional hotels given the saturated market.
"If you look at tourist arrivals it’s not going as fast as the other [countries]. We lag in the ASEAN [Association of Southeast Asian Nations] if you think about it. It could be a bit tough for [the hotels] to survive," he said.
Property developers have recently taken interest in building hotels.
Major developer Megaworld has allotted P7 billion for the construction of the Marriott Hotel, while Villar-owned upscale residential developer Brittany Corp. is in talks with property managers for a hotel it will be building in Alabang, Muntinlupa over the next three years.
The Lopez group’s property development arm, Rockwell Land, Inc., meanwhile, has allocated a space for a hotel in the future, while the Gokongweis’ Robinsons Land Corp., which has Holiday Inn Galeria, recently opened another five star hotel beside it and Robinsons Galleria -- the Crowne Plaza Galeria Manila -- in Ortigas Center.
Outside Metro Manila, Ty-owned Federal Land, Inc. ventured into the tourism business by acquiring the former Cebu Plaza Hotel and turning it into the Marco Polo Plaza Hotel.
Landco Pacific Corp., a joint venture between the Metro Pacific Group and the Xerez-Burgos family, is expanding its Fuego hotel chain over the next few years, and the Discovery and the Shangri-La hotel chain are building hotels in Boracay.
The Filinvest Group of the Gotianun family has also started venturing into property management with its casitas in the Leuna de Taal project, and in a much bigger scale -- Seascapes in Mactan (Cebu).
The development of additional hotel units is not limited to big companies, with the activities of smaller groups such as Philippine Investment Management, Inc.-owned Microtel Inns & Suites, and construction and property development firm E. Ganzon, Inc. also looking at putting up hotels.
For 2006, Microtel is looking at building budget hotels in Boracay, Tagaytay, Cabanatuan (Nueva Ecija) and Laoag (Ilocos Norte), while E. Ganzon is putting up classy hotels in Baguio and Cebu in addition to putting in a hotel component for its suspended Skycity project at Epifanio de los Santos and Ortigas avenues.
Hotel and serviced residences operators such as the Marco Polo group, the Ascott Group and Fraser Place are also looking at finalizing additional management contracts, particularly in Makati, Ortigas, Cebu and Alabang.
Data from the Tourism department showed visitor arrivals increased 13% to 1.73 million in January to August year on year. A bulk of these, or 1.64 million are overseas workers, or Philippine passport holders permanently residing abroad.
Property developers said that more than catering to the foreign market, their hotels aim to get a bulk of revenues from meetings, incentives, conferences and events.
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