Visa-free entry, rising international visitors, and thriving domestic demand continue to support the Philippines’ tourism recovery. Despite new hotel supply, Metro Manila occupancy remains resilient, average daily rate (ADR) growth is accelerating, and foreign hotel brands continue to expand nationwide. Colliers Philippines believes that these factors are reinforcing confidence in the sector’s long-term growth outlook.
The Tourism department’s latest programs are likely to stoke interest in the Philippines as a top tourist destination in the region and a strategic meetings, incentives, conferences, and exhibitions (MICE) hub in Southeast Asia. This should encourage more foreign players to throw a glance at the Philippines and consider infusing billions of dollars of fresh investments into the country’s hospitality sector.
Visa-free entry boosts foreign arrivals
Data from the Department of Tourism showed that the country’s international visitors reached 3.16 million in H1 2026, up 5.4% from the 2.9 million recorded a year ago. Arrivals from China and India grew 65% and 43% YoY, respectively, following the implementation of visa-free entry for eligible visitors.
Meanwhile, the United States outpaced South Korea as the Philippines’ largest source market, while Japan ranked third. We expect the rising numbers from China and India supporting the country’s tourism recovery for the remainder of the year.
The Department of Tourism (DOT) remains optimistic that sustained promotional campaigns will help boost visitor numbers and achieve its target of 6.4 million arrivals in 2026. Among the latest initiatives launched by the DOT include the appointment of popular Filipino artists as tourism ambassadors; strengthening of the Special Resident Retiree’s Visa (SRRV); promotion of domestic tourism through the “Discover More to Love” campaign; and multi-stakeholder efforts to boost the Philippines’ medical tourism segment.
Occupancy holds firm
In H1 2026, average hotel occupancy in Metro Manila reached 63%, down from the 65% recorded in H2 2025. In 2026, we project average occupancy to remain above 60% despite the delivery of sizable new supply and modest growth in foreign arrivals. While the Middle East crisis has temporarily affected the MICE segment and may dampen visitor arrivals in the near term, we expect demand to gradually recover as corporate travel and in-person events gain momentum for the remainder of the year. In addition, the weaker peso may help support inbound tourism demand.
Given these factors, Colliers maintains its forecast that Metro Manila hotel occupancy will continue to improve and is likely to return to pre-pandemic levels by 2028. However, elevated inflation, airfare, and fuel costs may continue to weigh on travel demand as consumers cut back on discretionary spending.
Foreign-branded hotels proliferate
In H1 2026, Colliers recorded the delivery of 846 new hotel rooms, with the opening of Somerset Valero Makati, W9 Hotel Manila, Wyndham Garden Manila Bay, and Alino Hotel in Quezon City. In 2026, we project the completion of 2,490 hotel keys, slightly lower compared to our previous forecast of nearly 2,900 rooms due to construction delays. Among the new hotels likely to be completed during the period include Dusit Greenhills Manila, Canopy by Hilton, Seda Hotel Arca South, and Mandarin Oriental Makati. The rebranding of Grand Westside Hotel to Movenpick Manila Bay Westside is also likely to happen before the end of the year.
From 2026 to 2029, we expect the annual average completion of nearly 2,000 rooms. The Bay Area, Quezon City, and Makati CBD will likely account for 71% of the new supply. We expect foreign-branded hotels to account for nearly half of the new supply during the period. Other foreign brands likely to open include Parkroyal Serviced Suites Manila Bay, Ibis Manila Caloocan, Hilton Garden Inn Manila, Radisson Serviced Apartments Salcedo, Park Inn Radisson Fairview, and Ascott DD Meridian Park.
The expansion of foreign hotel brands is also extending beyond Metro Manila. Brands such as JW Marriott, Radisson Red, Sofitel, Pullman, Hilton, Ibis, Mercure, Wyndham Garden, Park Inn by Radisson, Asai, Dusit Princess, and Somerset are actively expanding in Cebu, Zambales, Pampanga, Bohol, Cagayan de Oro, and Laguna.
There’s no doubt that the Philippine leisure sector is entering its next growth cycle with renewed momentum. Interesting times ahead for public and private stakeholders.
#PhilSTARPropertyFeature
#FeaturedStory
