This week, Colliers Research provides insights on a BPO company looking add more employees in its Iloilo office. According to Colliers, the city is quickly becoming a viable BPO destination, what with its huge pool of talent and healthy supply of office space. Furthermore, data released by IATA showed that demand for air travel in April 2022 rose by 79% compared to the same period of last year. This surge in bookings bodes well for the Philippine tourism industry, which has seen a gradual recovery. Data from Department of Tourism show that foreign arrivals reached 517,500 from February to May 2022, a significant improvement from about 40,000 arrivals recorded in the same in 2021.
BPO company iQor to expand Iloilo workforce by 100
Business process outsourcing (BPO) firm iQor is looking to add 100 more employees in its Iloilo office to handle Canadian telecommunications clients. iQor said that the new hires will receive a one-time bonus of PHP60,000 (USD1,200). Other benefits include a healthcare coverage for the employee and three dependents, monthly performance incentives, and quarterly appraisals. iQor Senior Director of Operations Tony Rizkallah considers Iloilo as a strategic location for their company.
Colliers sees the implementation of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law encouraging occupiers to expand in provincial locations including Iloilo due to the additional tax holiday incentives. In 2021, we recorded office vacancy in Iloilo dropping to 3.6% from 9.9% in 2020 as more outsourcing firms continue to absorb office space. Notable outsourcing transactions in 2021 include those from Legato, TDCX, and UCIT. Other outsourcing firms that expanded in Iloilo are iQor, Telus, Nearsol, EXL, and Hinduja Global Services. In our view, the healthy number of graduates should sustain Iloilo’s attractiveness as an outsourcing destination. Data from Commission on Higher Education (CHED) show that there are about 24,000 college graduates in Iloilo in 2019, with 33% holding degrees in business, engineering, and information technology (IT). We encourage occupiers to consider expanding in Iloilo to take advantage of its available talent pool, competitiveness, and upcoming supply of about 155,000 square meters (1.7 million square feet) of office space from 2022 to 2025. Developers should also capture pent-up demand by looking at the viability of building new office towers.
IATA sees continuing, strong air travel recovery
The International Air Transport Association (IATA) is seeing recovery in demand for international travel despite the ongoing war between Russia and Ukraine as well as travel restrictions in China. Data from IATA showed that demand for air travel in April 2022 rose by 79% compared to the same period of last year. This is also higher than the 76% YOY increase recorded in March 2022. IATA Director General Willie Walsh said that “With the lifting of border restrictions, we are seeing the long-expected surge in bookings as people make up for two years of lost travel opportunities.”
Colliers sees a gradual recovery in the tourism sector with the lifting of global travel restrictions. Data from Department of Tourism (DOT) show that foreign arrivals reached 517,500 from February to May 2022, a significant improvement from about 40,000 arrivals recorded in the same period last year. Furthermore, according to the World Travel and Tourism Council (WTTC), the tourism industry contributed USD41 billion (PHP2.1 trillion) to the Philippine economy in 2021, up 130% from 2020. In our view, this should signal recovery in hotel demand for the remainder of 2022. Colliers forecasts hotel occupancy to increase to 50% by the end of 2022 from 44% in 2021. We recommend that hotel operators continue to re-purpose and upgrade their facilities and amenities, as well as offer attractive promos and discounts to guests. Hotel operators should also continue to comply with government-mandated health and safety protocols.