WITH T2 OPEN, TIME FOR HOSPITALITY TO STEP UP
What can Cebu’s hotel operators do to make the most of a new international airport terminal’s impact?
The opening of Terminal 2 of the Mactan Cebu International Airport (MCIA) could mean tighter competition in the hotel sector, besides high growth in arrivals.
Real estate research firm Colliers International Philippines encouraged local developers with limited experience in operating hotels to team up with foreign brands, should they want to enter Cebu’s thriving hospitality industry.
This way, Colliers said, they can stand out in a competitive game and ride smoothly on the province’s tourism growth.
The research firm said this is particularly important for operators that are targeting the highend (four- and five-star) market. It believes Cebu is becoming a feasible market for internationally recognized accommodation.
“Colliers believes that the projected surge in arrivals and expanding average length of stay (ALS) and average daily expenditure (ADE) of visitors from China, South Korea, Japan and the United States should make Cebu a viable hub for more foreign-branded hotels and serviced residences,” the firm said.
At present, Cebu is enjoying high arrivals from South Korea, Japan, US and most recently from China.
Cebu attracted 4.9 million domestic and foreign tourists last year, up by 20 percent compared to the four million visitors recorded in 2016.
Chinese, Korean, and Japanese tourists continue to compose the bulk of foreign arrivals in Cebu, accounting for more than 70 percent of total arrivals during the period.
The number of Korean and Japanese tourists declined by six percent but arrivals from China surged by 75 percent.
Data from the Tourism Department revealed that Chinese tourists’ ADE rose to $233 in 2017 from $63 in 2016.
Over the same period, American tourists’ ADE increased by 28 percent to $247 while Japanese tourists’ expenditures grew by nine percent to $121 a day.
In 2017, Chinese tourists stayed for an average of 6.3 nights, an increase from the 4.2 nights in 2016. American visitors also stayed longer in 2017, with an ALS of 12.4 nights, up from 11.2 in 2016.
Partnership, loyalty
Prior to the Terminal 2 opening, branded hotels have already positioned themselves in key locations in Mactan and Cebu, all aiming to capture a good slice of the tourism market.
Local developers here with hotel business as part of their product portfolio have partnered with branded hotels.
AppleOne Properties, for example, has partnered with Sheraton while Cebu Landmasters Inc., has forged partnerships with the Radisson Red and Ascott’s lyf and Citadines brands, and Grand Land with Dusit Thani Princess.
Besides partnerships, improvements of loyalty programs and packages are also essential to remain ahead.
Colliers believes that local and national hotel operators in Cebu can retain and attract customers by offering loyalty programs. Among the perks that operators can provide to loyal customers are free Wi-Fi access, discounts in restaurants, and room upgrades.
Access to wellness
“We encourage hotel operators to customize their offerings based on the ADE and ALS of foreign tourists. Factoring in ALS and ADE should enable operators to target a specific market. This should also guide developers in deciding the appropriate mix of hotel rooms and apartment suites to be constructed in the future,” the research firm said.
Colliers also encouraged developers to complement their hotels with Mice facilities as Cebu is becoming a popular choice for major international events.
“Local and national developers should consider building health clinics and retirement facilities alongside hotels to capture the growing number of foreigners retiring in Cebu,” said Colliers.
It added that the concept of medical facilities being built alongside hotels should become more popular in Cebu moving forward as the island-province’s traditional visitor markets – China, South Korea, and Japan – have aging populations.