July 11, 2018, Manila - The completion of the second terminal of Mactan-Cebu International Airport (MCIA) should further boost Cebu’s attractiveness as a tourist destination. The opening of the new terminal also comes at an opportune time given the national government’s decision to close the popular Boracay island for six months to pave the way for rehabilitation.
In 2017, Cebu attracted 4.9 million foreign and domestic tourists which sustained hotel occupancy of 78%, higher than the 70% recorded in 2016. MCIA is the country’s second busiest airport and its expansion should help sustain Cebu's hotel occupancy between 70% and 75% over the next 12 to 36 months.
Benefitting from robust tourist arrivals are the city’s hotels and residential condominiums being offered to the short-lease market. Cebu houses a wide range of accommodation facilities that cater to both young, urban professionals on a weekend getaway and investors on a short business trip.
Colliers believes that aside from the influx of local and foreign tourists, the demand for more leisure investments such as hotels and serviced residences should be fuelled by Cebu’s thriving outsourcing and industrial sectors. Medical tourism is another bright spot for the island-province's hospitality segment.
Colliers sees tourism becoming a major plank of Metro Cebu’s economy moving forward. We expect the sector’s growth spilling over to other sectors such as retail.
Aside from developing leisure estates, Colliers believes that local and national developers can capture opportunities in the booming Cebu tourism sector by implementing the following:
- Bringing in more foreign brands;
- Building more hotels along the nodes of new road infrastructure projects;
- Improvement of loyalty programs;
- Expansion of meetings, incentives, conferences, and exhibitions (MICE) facilities; and
- Integrating health and retirement facilities.
Colliers believes that Cebu has the potential to be at par with neighbouring destinations such as Bali and Phuket in terms of hotel and resort development. At present, Cebu has only a fifth of Bali’s and Phuket’s room count. But we see Cebu becoming a major leisure investment destination in the region given its improving infrastructure backbone and sustainability of traditional demand drivers such as outsourcing and industrial operations.
Among the national developers that we see benefitting from the thriving leisure sector in Cebu are Udenna Group, Filinvest, Ayala Land, Rockwell, Megaworld, Robinsons Land, and SM Prime.
Local developers including Cebu Landmasters, Grand Land, Tanchan Corporate Group and AppleOne Properties, have teamed up with international brands and we project they will compete with foreign-branded hotels and serviced residences over the next 12 to 48 months.
The tourism demand drivers in Cebu compel national and local hotel developers to either bring in foreign hotel operators or maximize homegrown hospitality brands. Leisure investors in Cebu have been successful in employing these strategies and we see the continued implementation of these plans moving forward.
Aside from the modernized and expanded airport, Colliers sees Cebu’s tourism sector surging due to a number of infrastructure projects which should open new opportunities in the countryside. The completion of these projects should spur demand for more accommodation facilities outside of the Metro Cebu (comprised of Cebu City, Lapu-Lapu, and Mandaue) corridor.
Among these road projects are the Cebu-Cordova bridge; Metro Cebu Expressway; Cebu-Negros Link Bridge; Cebu-Bohol Link Bridge; and the Bus Rapid Transit (BRT) system.
Cebu Regional Comparison