Taylor Swift and the insatiable appetite for MICE facilities in PHL
THE RETURN of in-person events has been fueling the demand for MICE (meetings, incentives, conferences, and exhibitions) facilities across the Philippines. There’s no doubt that developers are cashing in on this gargantuan need for massive convention centers. The strong take-up for this sub-segment should also be buoyed by the rise in foreign tourists, including business travelers.
Filipino Swifties will definitely be glad to welcome and hear Taylor Swift live in the Philippines. The clamor to eventually host the multi-awarded performer has been compelling property firms to build massive convention centers that can accommodate Taylor’s fans. But what’s interesting is that developers are also trying to capture demand from business travelers who want to convene in person. Colliers believes that despite the availability and proliferation of online platforms, nothing replaces people’s desire to physically network and interact. This is particularly true for Filipinos, considered highly sociable beings. Already, there are plans to develop a massive convention center within Villar City, while the government has announced its plan to build the P18 billion ($314 million) New Philippine International Exhibition Center, which will have 108,000 square meters of exhibition/event space and host up to 150,000 attendees. Once completed, it will become the largest exhibition venue in Southeast Asia. It’s go big or go home for MICE development in the Philippines.
Colliers believes that the establishment of more MICE and co-working facilities should complement the accommodation and dining packages that hotels will offer to business travelers. The integration of these facilities is of utmost importance, especially in business hotels located in major business districts in Metro Manila, Pampanga, Cebu, and Davao. The Tourism department is also priming the Philippines as a major MICE destination, and this should enable the country to corner major global MICE events (including Taylor Swift’s concert and related promotional activities) and further boost tourist arrivals and spending across the archipelago. Colliers believes that previous hosting of MICECON events in Clark, Cebu, and Davao should help promote the Philippines’ viability as a MICE hub in the ASEAN region.
THRIVING MICE OPPORTUNITIES FOR HOTEL DEVELOPERS
Four- and five-star hotels are likely to benefit from the return of in-person corporate events and the resurgence of business travel. Property exhibits, pharmaceutical product launches, and overseas employment summits are among the events that help drive occupancies of hotels and are primarily hosted in hotels’ meeting rooms and exhibition centers. Hotel operators should maximize the return of these in-person events and tap corporates by offering attractive packages. Hotel operators should also work closely with the Tourism department, which is actively enticing international organizations to mount their events in the country. The department is also priming the Philippines as a key MICE destination in Asia, and this should result in the holding of international MICE events in the Philippines, especially in Metro Manila, Clark in Pampanga, Cebu, and Davao.
MORE FOREIGN BRANDS IN KEY AREAS
Colliers believes that now is an opportune time for foreign brands to expand their presence in the Philippines, given the planned modernization of the country’s international airports and the projected rise in international arrivals. The Department of Tourism is aiming to attract 7.7 million foreign visitors this year, up from 5.45 million in 2023 and 2.65 million in 2022. The government has also set a lofty goal of attracting 12 million international tourists by 2028. This optimism has been enticing foreign hotel operators to expand their presence across the Philippines. Sofitel Philippine Plaza Manila has officially closed its doors on July 1, 2024, but is expanding its presence in key destinations such as Cebu and Clark in Pampanga. Accor Hotels will also be developing a 175-room Ibis Styles and a 250-room Mercure Hotel in Subic, Zambales. Radisson Hotels also announced that they will be launching Radisson Blu in Cagayan de Oro, as well as other Radisson brands in Cebu. Other foreign-branded hotels in the pipeline will come from Sheraton, Dusit Thani, Citadines, and Tryp by Wyndham. Colliers recommends that developers be on the lookout for upcoming convention centers and soon-to-be modernized airports outside the capital region for their hotel expansion plans.
OCCUPANCY SLIGHTLY SOFTENS
Average hotel occupancies in Metro Manila reached 63% in the first half of 2024, lower than the 65% in the second half of 2023 due to new supply. By end-2024, we expect average occupancy to hover between 60% and 65% as the number of returning overseas Filipino workers is likely to pick up during the holiday season.
The holiday-induced increase in demand for MICE and other in-person events should also help prop up occupancies in the second half of 2024.
NEW KEYS IN QC AND BAY AREA
In the first half of 2024, Colliers recorded the delivery of 2,700 rooms, more than triple compared to 797 rooms a year ago. Quezon City (QC) accounted for nearly half of the new supply with the delivery of Hop Inn North EDSA (187 rooms), Ibis Styles Manila Araneta City (286 rooms), Citadines Roces (200 rooms), and Solaire North (526 rooms), Quezon City’s first five-star hotel. The Grand Westside Hotel also opened in the Bay Area and is now the largest hotel in the country with 1,530 rooms. In 2024, we forecast the completion of 4,560 rooms, lower than our earlier forecast of 5,100 rooms due to construction delays.
Among the hotels due to be completed in the second half of 2024 are Ridgewood Premier Hotel in C5 Road, Somerset Valero Makati, Seda Hotel One Ayala, Seda Hotel Arca South, Ascott DD Meridian Park, and Westside City Resorts World. The Bay Area will likely account for nearly half of the new supply.
Joey Roi Bondoc is the director and head of Research of Colliers Philippines.