Iconic hotels return as tourist arrivals hit 2.9M

The real estate market maintained its growth momentum in the first half of 2025, bolstered in part by a resurgence in tourism and strong demand across the office, industrial, and residential sectors, according to Santos Knight Frank’s latest market report.

Tourism receipts saw a notable boost, supported by the return of iconic hospitality brands, including Sofitel in Cebu and InterContinental in New Clark City. The resurgence of these landmark hotels, along with government-led initiatives such as tourism tax refunds and visa-free entry for key markets, has driven tourist arrivals to 2.9 million in the first half. Luxury hotel rates surged 11 percent, with Taguig commanding the highest average nightly rate at P14,991. High-end developments like Accor-Megaworld’s Mercure and Banyan Tree’s entry in New Clark City further signal confidence in the sector.

Net office absorption hit 192,000 sqm in H1 2025, driven primarily by the BPO sector expanding within Metro Manila. Taguig posted the lowest vacancy rate at 15 percent and the highest average asking rent at P1,248/sqm/month, surpassing the Metro average by 21 percent. A total of 158,000 sqm of new supply entered the market, with over 403,000 sqm more expected by year-end.

Manila was ranked 9th globally in Knight Frank’s Q1 2025 Prime Global Cities Index, with residential prices up 5.5 percent year-on-year. Prime villages like Forbes Park and Dasmariñas posted double-digit price growth, reflecting ongoing demand driven by limited supply.

In the industrial segment, CALABARZON and Central Luzon continue to attract foreign firms in manufacturing, logistics, and pharmaceuticals. Rental rates range from P230 to P290/sqm/month, offering competitive options for multinationals.

The opening of Smith & Wollensky at BGC’s Finance Center highlights the increasing presence of premium global brands, further validating Metro Manila’s growing appeal as a luxury retail and dining hub.

As foreign and local investments continue to flow, the Philippine real estate market demonstrates both resilience and opportunity across sectors — from the return of legacy hotels to the steady rise of industrial parks and luxury developments.

Source: Context

Tourism contributes 8.9% to Philippine GDP in 2024

The share of the tourism industry in the Philippine economy rose to a five-year high of 8.9% in 2024, the Philippine Statistics Authority (PSA) said on Thursday.

Tourism direct gross value added (TDGVA) — an indicator of the economic contribution from tourism-related activities — jumped by 11.2% year on year to P2.35 trillion last year, preliminary data from the PSA showed.

However, TDGVA growth was slower than the 49.9% surge logged in 2023 and the slowest annual growth since the 10.3% expansion in 2020.

Despite the slower growth, the share of TDGVA to the economy rose to 8.9% in 2024, the highest share since the 12.9% recorded in 2019.

By industry, country-specific tourism characteristics goods – shopping accounted for 21.8% of the total with P512.68 billion. It was followed by miscellaneous services (20.2% share or P476.23 billion) and accommodation services for visitors (18.4% share or P432.9 billion).

Domestic tourism expenditure, which includes resident visitors’ spending within the country on a domestic trip or as part of an international trip, grew by 16.4% to P3.16 trillion last year.

Outbound tourism spending reached P345.68 billion in 2024, rising by 37.5% from P251.35 billion in 2023.

Inbound tourism expenditure, meanwhile, inched up by 0.4% annually to P699.99 billion.

Total employment in the tourism sector grew by 6.1% to 6.75 million in 2024. Tourism accounted for 13.8% of the total jobs in the country in 2024.

The majority of the tourism-related jobs were centered on miscellaneous activities. The health and wellness sector employed 1.83 million, accounting for a 27.1% share.

The accommodation and food and beverage sector had 1.69 million workers (25% share), while passenger transport had 1.67 million workers (24.7%).

Reinielle Matt M. Erece, an economist at Oikonomiya Advisory and Research, Inc. said easing inflation helped boost tourism spending last year.

“Lower inflation relative to 2023 and better economic conditions in the country may have encouraged tourists due to better prices,” he said.

Inflation averaged 3.2% in 2024, cooling from the 15-year high of 6% in 2023.

Last year, the Department of Tourism recorded 5.95 million visitor arrivals, falling short of its 7.7 million target.

“While Philippine tourism has made substantial progress — particularly in revenue generation — it hasn’t achieved full recovery in terms of visitor numbers, and the pace of recovery appears to be slowing in early 2025,” Leonardo A. Lanzona, Jr., an economics professor in Ateneo de Manila University, said.

Mr. Erece is optimistic that tourist numbers will improve this year.

“The strong domestic economy can also be a positive factor in improving local economies and their respective tourism potential,” he said.

Source: Business World

Visitor arrivals of 6 million seen possible in 2025

The Philippines can hit visitor arrivals of 6 million this year, even with its key source markets roiled by currency volatility, Leechiu Property Consultants said.

“I think the Philippines can still book 6 million visitors by year’s end, but of course there are risks,” said Alfred Lay, director for hotels, tourism, and leisure at Leechiu.

“Risks for this year are all mainly external, namely the uncertainty in the global economy, airline disruptions, and exchange rate volatility in our top source markets, which can both have positive and adverse effects,” he added.

The Department of Tourism reported that the Philippines booked 5.95 million visitor arrivals last year, well off its target of 7.7 million.

Mastercard Chief Economist for Asia-Pacific David Mann said that inbound tourism to the Philippines is recovering slowly compared to the outbound segment of the business.

“We have seen outbound spending rise 6% versus 2019, with the majority traveling to Japan, Korea, and Vietnam,” Mr. Mann said in a virtual briefing on Thursday.

“The inbound recovery has been a bit slower, at less than three-quarters (72%) recovered to 2019 levels, likely due to some of the slower recovery in the air capacity and reliance on long-haul markets,” he added.

He noted the slowdown in arrivals from Northeast Asia but added that visitors from Singapore, the US, and Australia, as well as overseas Filipinos, have been helping support the recovery.

The Philippines recorded 2.1 million visitor arrivals as of May 1, down 0.82% year on year.

South Korea, the top source market, accounted for 22.25% of arrivals, or 468,337, down 18% from a year earlier.

The other top source markets were the US, Japan, Australia, and Canada.

“While the dip in South Korean arrivals is notable, it’s too early to call it a lasting trend,” Mr. Lay said.

“Encouragingly, we’re seeing steady growth from the US, Australia, Japan, and parts of Europe — markets showing healthy demand that can help offset the shortfall,” he said.

However, he said the decline in arrivals “highlights the ongoing need for both the private and public sectors to continue improving our infrastructure and services.”

“The regional market is very competitive, and we need to keep adding more focus, resources, and funding to our tourism sector to ensure we stay relevant,” he added.

He said the opportunities in Philippine tourism still lie mainly in the domestic market.

Source: Business World