By Beatriz Marie D. Cruz, Reporter
PROPERTY CONSULTANTS said residential oversupply could push more Philippine developers to pursue luxury hospitality projects.
“With over 7,000 islands, it has all the ingredients, but it seems that Philippine hotel developers are conservative,” Bill Barnett, founder and managing director of Thailand-based hospitality consulting group C9 Hotelworks, said in an interview with BusinessWorld.
Mr. Barnett, who has served as a consultant for various hotel and residential developments across the Asia-Pacific, said many of the Philippines’ hotels and resorts are “family-run, so they tend to look at the industry and do what their friends do.”
“If somebody does one thing, they all do it,” he added.
Mr. Barnett also noted that some hospitality developers tend to be “commodity minded.”
“Meaning, they think more is better. More rooms, more things… You can’t commoditize luxury because somebody else can come in and lower their prices,” he added.
He also noted the oversupply of condominium units in Metro Manila would prompt developers to shift to the luxury segment.
“I think, now with real estate being overbuilt, Philippine developers will have to find a niche,” he said. “The real estate situation in the country triggers more luxury…because of the oversupply.”
For a luxury hospitality development to be attractive, Mr. Barnett said it is important to have easy access to its location.
“You can’t stay there if you can’t get there,” he said. “There should be enough flights which make it attractive, not only for guests, but to transport staff, and even goods and services.”
He also noted that luxury hospitality properties must have a unique selling point, with many travelers seeking localized experiences. Mr. Barnett also cited the importance of unique food & beverage concepts, strong internet connectivity, and exclusivity of location.
Alfred Lay, director for hotels, tourism, and leisure at Leechiu Property Consultants, said there are over 35 luxury hotel projects ongoing in the Philippines, accounting for over 7,500 hotel rooms over the next four years.
“If you include projects which have yet to be announced, then the number climbs to 50 luxury hotels and adding over 10,000 high end room keys,” he said in a Viber message.
However, air access remains a key roadblock in making the Philippines a fully realized luxury destination, Mr. Lay said.
“If you’re a high-spend international traveler, you don’t want connecting flights just to get to your resort — you want to land straight into places like El Nido or Siargao. Where we’ve got international airports near tourist hubs, you’ll notice the luxury hotels follow, such as Mactan, Panglao Island, Boracay,” he added.
Joey Roi H. Bondoc, director and head of research at Colliers Philippines, said luxury hotels are expected to perform well amid high occupancy rates and the entry of foreign hospitality brands into the country.
“Even if foreign arrivals to the Philippines dropped marginally in the first five months of 2025, there’s still a healthy level of occupancy, especially in Metro Manila hotels,” he said via telephone.
In the first half of the year, five-star hotel occupancies remained steady at 67% from the same period in 2024. This comes as foreign arrivals in the Philippines remain below pre-pandemic levels at 2.54 million as of end-May.
However, Colliers noted that the Philippines has a 4% penetration rate of branded hotels, way behind Singapore (45%), Indonesia (10%), and Thailand (8%).
“I think it will take a few more years for the Philippines to be at par with Thailand, Singapore, of course, Indonesia, especially if you look at our recovery rate pre-pandemic,” he said.