Lax hotels may be abetting virus spread
Department of Tourism (DOT) Secretary Bernadette Romulo Puyat said that lax health and safety protocols in hotels could result in the transmission of the COVID-19 virus. Hotels should provide isolation spaces for arriving guests while waiting for their rooms to be occupied, according to Hotel Sales and Marketing Association President Christine Ibarreta. DOT added that they will likely be revising their guidelines for accommodation establishments such as implementing flexible check-in procedures, contactless booking and QR code for their restaurant menus.
The hospitality and leisure sector continues to be affected by the COVID-19 pandemic due to the imposition of travel restrictions. In H1 2020, occupancy of hotels in Metro Manila dropped to 25% from 71% in H2 2019. Colliers also saw average daily rates (ADR) drop by 16% during the period. The pandemic has limited the operations of hotels as they were only allowed to accommodate medical frontliners, business process outsourcing (BPO) and repatriated Overseas Filipino Workers (OFWs). Meanwhile, Colliers encourages tourism establishments to closely monitor the government’s recovery plans for the industry such as the granting of tax incentives to those that will likely modernize and upgrade their facilities for health and safety purposes. Colliers believes that compliance with these protocols should maximize guests’ hotel experience and help recapture demand once the pandemic wanes and lockdowns are lifted.
Megaworld invests $5 million in tech startup
Megaworld Corp. is planning to branch out with the creation of its digital innovations subsidiary AGILE Digital Ventures, Inc. The USD5 million (PHP245 million) investment includes the launch of the company’s start-up project called PICK.A.ROO. The mobile application aims to feature 300 local and international merchants offering a variety of products to online buyers. The platform will likely be launched within August 2020. Kevin Tan, Chief Strategy Officer of Megaworld and President of AGILE Digital Ventures, noted that the project aims to assist retailers in terms of migrating to e-commerce. The group is currently planning on further boosting its technology platforms.
Considering the gradual shift of consumer preferences, both retailers and mall operators should be innovative in terms of marketing and selling their products. We expect an increase in demand for online shopping supported by the growth in the use of e-payment platforms. Data from the Philippine Payments Management Inc. (PPMI) showed that e-payment transfer in April 2020 reached 8.9 million, up by 32.2% from 6.7 million in March 2020. We recommend that merchants consider partnering with online platforms operated by third-party providers. Selected mall operators have already expanded their business channels to include websites and mobile applications. Partnering with large online stores should help with revenue recovery and expansion of consumer base.
Singapore’s proptech platform to set up operations in PH
Ohmyhome, a property technology (proptech) firm located in Singapore, plans on expanding to the Philippines. Services offered through its website and application include agency-serviced and do-it-yourself (DIY) models covering the buying and selling process of homes. The proptech firm provides around 2,000 monthly housing transactions in both Singapore and Malaysia. It also reached 300,000 downloads, 15,000 listings, and caters to more than 175,000 active users. Rhonda Wong, Chief Executive Officer and Co-founder of Ohmyhome, noted that the firm differs from other property classified platforms as it also helps clients in terms of deal-closing, legal documentation, and mortgage advisory. Wong added that the simplified process led to a more than 99% satisfaction rate for clients in Singapore and Malaysia.
For H2 2020, we expect softer residential take-up due to subdued investor interest given the impact of the pandemic. This may partially lead to a 13.8% decline in prices by the end of 2020. Once the pandemic is contained and lockdowns are eased, we project a slow recovery or an annual growth of about 2.1% from 2020 to 2022. In preparation for the recovery of the market, we recommend developers to consider adopting more proptech measures to attract potential buyers. Aside from tapping proptech firms, developers may also adopt additional technology features in their projects. These include offering automated communication platforms for tenants, cloud-based digitized accounting for payments, and augmented reality (AR) showrooms. This may help differentiate their projects among other developments in the market.