At least 23 hotels and resorts in Cebu have rolled out promotional offers, including discounts of up to 50 percent, as well as “staycation” and “workcation” packages, in response to a 60-percent decline in occupancy rates.
“Given the current situation, we're seeing occupancy rates even lower than that (60 percent), which is definitely much lower than what we saw in the first quarter of this year and the same period last year,” said Mia Singson-Leon, president of Hotel, Resort and Restaurant Association of Cebu (HRRAC), which has more than 120 members.
City hotels hardest hit
Worst hit were city hotels which had lower occupancy rates compared to resort-hotels due to their dependence on government business and Meeting, Incentives, Conference and Exhibitions (MICE) which have dropped because of the economic slowdown.
“We're working with our members to adjust strategies and offer competitive packages to attract domestic tourists and targeted international markets that are still very much available to Cebu properties,” said Singson.
Three months before the fuel crisis, Singson said most hotels in Cebu were already enjoying healthy occupancy rates of 70 to 80 percent, driven by new direct flights, strategic sales efforts, and the hosting of Association of Southeast Asian Nations (ASEAN) and other MICE events in Cebu.
However, tensions in the Middle East escalated by March, severely affecting global fuel supply and driving prices to unprecedented levels, which in turn pushed up transportation costs and commodity prices.
This prompted both leisure and business travelers to scale back their travel plans. Meanwhile, the remaining ASEAN energy-related meetings, previously scheduled to be held in Cebu, have shifted to a virtual format, removing a key source of demand for local hotels and further dampening occupancy prospects in the coming months.
Marketing strategies
During a meeting convened by the Department of Tourism–Central Visayas (DOT-7) on March 31 to discuss the effects of the fuel crisis, at least 23 resorts and hotels in Cebu rolled out promotional rates of up to a 50-percent discount, along with “workcation” and “staycation” packages, to attract local tourists and emerging international markets.
As part of their marketing strategy, industry players are also targeting new source markets in the Asia-Pacific region, including China, South Korea, Taiwan, Singapore, and Malaysia, given their proximity to the Philippines.
Industry representatives likewise see the projected slowdown as an opportunity to reskill the workforce and promote practical learning for students, while continuing expanded training under the Filipino Brand of Service Excellence program.
With the general decline in tourist spending across sectors, booking cancellations have begun to affect transport providers, accommodation establishments, and tour guides.
In addition to the cancellation of some international routes, which led to a drop in arrivals, domestic travel has also slowed as ferry passage rates, island-hopping boat services, and land transportation fares increased due to rising fuel costs.
Protecting profit margins
Singson said that while many hotels and resorts are offering promotional rates and summer staycation packages, they must remain cautious to protect profit margins and ensure sustainability amid high inflation and rising fuel costs.
“Aside from promotional rates, we’re leveraging digital marketing, enhancing guest experiences, and offering value-added services to attract customers,” said Singson.
She added they are also working with local businesses to offer bundled packages and promotions.
“Each property is adapting to the situation in its own way. That’s why we cannot have a unified rate or discount percentages and we're focusing on finding different ways to sustain operations and navigate the challenges ahead,” said Singson.
Government help
In the meantime, Singson said the industry urgently needs government support in the form of financial assistance for tourism workers, tax breaks, and subsidies for tourism-related businesses.
She added that the group has been advocating for policies to help stimulate tourism, including incentives for local travel and allowing government agencies to proceed with hotel bookings for essential training and meetings.
They are also seeking support for marketing and promotional activities to attract more tourists to Cebu, she said. —Ed: Corrie S. Narisma
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