2 weeks Ago By N/A (James A. Loyola)
The Philippine tourism and hotel industry continued to face challenges in 2024, and these difficulties are seen to persist this year, primarily due to global economic headwinds and slower recovery in key international markets such as South Korea and China. In a briefing, Leechiu Property Consultants Director for Hotels, Tourism, and Leisure Alfred Lay noted that “domestic tourism is likely to remain robust, supported by growing local travel demand.” Leechiu Property Consultants estimates that foreign tourist arrivals will stabilize at six million by the end 2025.
While the hotel sector is projected to continue its recovery, Lay said, “Significant growth in occupancy rates and revenue will require strategic initiatives aimed at attracting higher-yield foreign tourists, better integration of business travel, and enhanced destination marketing efforts.” “With hotel performance showing limited progress and recovery in foreign arrivals facing difficulties, it's clear that a more coordinated effort between the public and private sectors is needed. “A decisive catalyst is essential to spark substantial growth in tourism—one that is resilient enough to withstand economic challenges and elevate the industry beyond its current plateau,” he added.
Overall, the Philippines' hotel performance aligns with the Southeast Asia regional average, which is experiencing a moderate post-pandemic recovery. With visa waivers, markets like Singapore and Malaysia have seen stronger rebounds, with recovery rates of 86 percent and 106 percent, respectively, highlighting the need for stronger interventions in the Philippines. The Philippine tourism and hotel industry registered marginal performance in 2024 and subdued growth in foreign tourist arrivals during the first quarter of 2025.
The Philippines recorded a 0.5 percent dip in foreign arrivals during the first quarter of 2025, mainly due to declines in key source markets, including South Korea and China. While still the top source market, South Korea saw a 14 percent year-on-year drop, partly due to the weakening Korean Won against the US dollar amidst ongoing political tensions.
For the first time in nearly 20 years, China fell out of the top five source markets, further contributing to the slowdown. In 2024, the Philippines’ average daily rate (ADR) surpassed 2019 levels, but growth was minimal compared to 2023. Despite a strong domestic tourism performance and higher room rates, occupancy and revenue per available room (RevPAR) have plateaued due to the slow recovery in foreign arrivals.
However, the upper-scale hotel segments are showing resilience, with travelers increasingly seeking higher-quality accommodations. Conversely, the economy and mid-market segments continue to struggle to recover their pre-pandemic performance, hindered by shifting consumer preferences, economic pressures, and competitive challenges..
