The issue is not limited to expensive domestic airfare; even hotels, especially those in Metro Manila, have significantly raised their room rates, surpassing pre-pandemic levels. Unfortunately, this trend is projected to continue in the medium term, posing a serious threat to the government’s goal of attracting 12 million international arrivals by 2028. .
The majority of the new hotels are concentrated in Metro Manila, with the rest distributed among popular destinations such as Cebu, Boracay, Davao, and Palawan. While this development is promising, it may not be sufficient to meet the growing demand for accommodations. Furthermore, factors such as a high inflation rates and the cost of funding pose significant challenges to hotel development.
Inflationary pressures are expected to drive the average daily rates of hotels to continue rising, outpacing occupancy and revenue per available room . While ADR typically lags behind occupancy growth, hotels have been focusing on increasing rates to offset higher operating costs driven by inflation. Luxury hotels in Metro Manila have already experienced significant ADR growth, surpassing pre-pandemic levels.