Hotels turning to local tourist market to survive

AdChoiceTV News — Hotel operators in the Philippines are looking to take in additional bookings from domestic tourists this year to make up for the lack of foreign guests due to travel restrictions set by the government.

PreenXpress Co. Chief Investment Officer Robin Chan said hotels anticipate a rebound this year once borders are reopened to foreign nationals.

However, as the government tries to contain the local outbreak first, hotels would rely on locals for the meantime to boost their transactions.

“Most hotel operators are trying to determine the best estimated return of airline traffic. Hotels definitely see tourism picking up as soon as flight restrictions are lifted,” Chan said last week.

“It is only a matter of timing, which is heavily dependent on the rollout of the COVID-19 vaccine. Local tourism and staycations are also being encouraged to push demand,” he added.

Based on forecast from PreenXpress, bookings in the Asia-Pacific region this year will jump by more than 20 percent to $7 billion, from $5.8 billion last year.

As a result, seven in every 10 hotel investors say they are confident the market will bounce back in 2021 and that they eye to deploy capital to take advantage of this recovery.

Further, the margin between buyer and seller price will narrow within the next months, as sellers are now adjusted to the cost impact of the pandemic on their operations.

Four in five investors asked by PreenXpress said they would extend discounts of up to 30 percent. On the other hand, sellers are seen to move about 10 percent in asking rates.

Optimism is also building up in the Japanese and Southeast Asian markets at 52 percent and 46 percent, respectively, as the most desirable locations for new hotel projects. Australia and China come next in the region at 31 percent and 22 percent.

“All these considered, PreenXpress Co. remains optimistic of hotel investment in the country in the long term,” Chan said.

“Acquisitions during this period should be opportunistic and investing while the hospitality sector is under pressure will yield good results in the long run,” he added.

Reporting by Irvin Chua / AdChoiceTV News

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