A sluggish rebound in international travel and mixed hotel performance point to a slow road to full recovery.
As such, LPC forecasts just 6 million foreign tourist arrivals this year, well below the Department of Tourism’s official goal.
While domestic travel is expected to perform well, a strong catalyst is needed to push the market beyond pre-pandemic levels.
“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,” said Alfred Lay, director for hotels, tourism and leisure at LPC
“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.
Declining arrivals
• Foreign arrivals fell by 0.5 percent in the first quarter of 2025, signaling a weak start to the year.
• South Korea, the top source market, posted a 14 percent year-on-year drop due to a weakened won and geopolitical tensions.
• China dropped out of the Philippines’ top five tourist markets for the first time in nearly two decades.
• Hotel average daily rates (ADR) surpassed 2019 levels in 2024, showing pricing resilience.
• However, occupancy and revenue per available room (RevPAR) have stagnated, reflecting weak international demand.
Winners and losers
Meanwhile, regional peers like Singapore and Malaysia—boosted by streamlined visa policies—have posted stronger tourism rebounds, with recovery rates of 86 and 106 percent, respectively.
Upper-scale hotels in the Philippines are seeing steadier demand as travelers shift toward more premium experiences. In contrast, budget and mid-range segments continue to lag, challenged by tighter spending habits and evolving travel preferences.
