The 31-year-old New World Hotel also further expands ALH’s luxury hotel offerings in Metro Manila, which includes Fairmont Makati, Raffles Makati, and the upcoming Mandarin Oriental Makati. Moving forward, ALI is budgeting $500 million (P28 billion) to reach its goal of 8,000 room keys in five years.
The Gokongweis’ Robinsons Land (RLC) is also getting in on the hotel action, with the company celebrating the grand opening of the 223-room ultra-luxury NUSTAR Hotel Cebu in early 2025. RLC also just launched the 100-room Grand Summit Pangasinan, which is slated to open in 2027, and with several additional hotels in the pipeline, notably located in tourism hotspots like Panglao, Cebu, and Siargao.
RLC said that it plans to spend P10 billion over the next few years to expand its hotel portfolio by 25 percent from around 5,000 to more than 6,200 room keys by 2030.
Property developers betting big on hospitality
ALI and RLC are not the only ones making big moves in the hospitality space, with Megaworld (MEG) announcing last week that it has secured a partnership with French hospitality powerhouse Accor.
Through this partnership, Accor’s operational framework will be integrated into Megaworld’s expanding hotel portfolio, leveraging their international guest servicing standards, advanced infrastructure, and onboarding guests onto Accor’s global loyalty platform.
MEG’s upscaling plan kicks off by rebranding Belmont Hotel Mactan as Mercure Mactan Cebu within the year, with other hotel properties to follow. Over the next three years, MEG is earmarking P50 billion to build seven additional hotels and boost its room count from 7,000 to 9,000 keys.
SM Prime Holdings (SMPH), despite being better known for their shopping malls, is also looking to aggressively expand their hospitality offerings with plans to spend P10 billion to build seven new hotels scheduled for completion by end-2029.
These new properties would add more than 1,300 rooms to SMPH’s hotel inventory and increase their room count by 51 percent from 2,602 to 3,923.
Following the money
There has been a need for property developers to diversify their income streams after rising interest rates weakened demand for residential properties and led to a condominium oversupply in NCR.
Demand for office spaces also plummeted after the pandemic paved the way for wider acceptance of hybrid work arrangements, and it deteriorated further following the ejection of POGOs in 2024.
Of all segments, only demand for retail spaces remained fairly stable, although it was also tempered by weakened consumer confidence following the high inflation years of 2022–2023.
Now it seems that property developers have found a new cash cow in hospitality.
A combination of macroeconomic headwinds, geopolitical factors, lack of infrastructure, and safety concerns looks to be setting the stage for flat growth in tourist arrivals this year, and tourism experts forecast that arrivals will be almost unchanged from last year’s 6 million tourists.
At the same time, we observed that spending statistics for inbound tourists show per capita expenditure has declined by 5.6 percent annually from P140,016 in 2022 to P117,656 in 2024.
However, spending for accommodation services per visitor bucked the trend and rose by 17.1 percent annually in the same period from P23,927 in 2022 to P38,384 in 2024, a key driver signaling huge demand for business and leisure travel accommodation.
Interestingly, these spending statistics only account for inbound tourists and do not account for the more robust domestic tourism market, so our optimism might even be understated.
Big picture
As of now, hotels still account for a relatively small percentage of revenues, ranging from mid-single digits for ALI and MEG to low-teens for RLC and SMPH.
However, we should see hotels making more meaningful contributions to the top line in the coming years as developers aggressively expand their room inventory.
It could be that we are starting to see the first few pages of a new growth story being written for the property sector, and now all that remains to be seen is if it will end with a happy ending or not.
