PH Tourism Targets Better Numbers Through Improved Connectivity and Hotel Expansion

The Philippine tourism sector is banking on a 2026 rebound driven by four factors: border entry reform, airport improvement via privatization, a surge in hotel inventory, and direct connectivity.

In a recent briefing, Alfred Lay, Director for Hotels, Tourism, and Leisure at Leechiu Property Consultants (LPC), projected that inbound arrivals will reach 6.3 million in 2026. While this marks a steady climb from the 5.8 million estimated for 2025, it remains more conservative than the Department of Tourism’s (DOT) target of 6.7 million.

According to him, the primary catalyst for this growth is accessibility. The government is set to reactivate the electronic visa (e-visa) system for Chinese nationals, a move intended to regain a key demographic that has faced entry hurdles in recent years.

Likewise, the privatization of local airports and the development of the Bulacan hub are central to LPC's remark. This is coupled with a projected P1 billion in government spending on tourism branding and promotion for 2026.

A visible indicator of investor confidence is the construction pipeline, Lay said. Approximately 50 hotels are expected to open in 2026, adding 12,248 new rooms to the market.

The expansion is moving beyond traditional hubs. International brands—often through partnerships with local developers—are now targeting secondary and tertiary cities. In the pipeline are the entry of new hotel brands, including Moxy Hotels by Marriott International, Radisson Red by Radisson Hotel Group, Canopy by Hilton, and Dusit International's Dusit Collection and Dusit Princess. Geographic expansion is also seen among hotel groups, with international hospitality chains moving into cities like Zamboanga, Baguio, and Laguna.

The most competitive sector remains the upper mid-scale segment (typically priced between P4,700 and P5,700). Major local players like SM Hotels and Megaworld are expected to launch 15 properties in this price bracket alone, representing 4,000 of the total new room keys.

Lay notes that Average Daily Rates (ADR) are expected to plateau this 2026, offering a reprieve for travelers from the price hikes seen in the last two years. After raising rates to offset operational costs and stabilize margins, hotels are now shifting their focus toward increasing occupancy rates.

Finally, the expansion of air routes is seen as the final piece of the 2026 tourism puzzle. Jetstar, for instance, is having direct flights between Perth and Manila as well as a seasonal route between Melbourne and Cebu. There's also an anticipated increase in flight frequencies to Europe and the Middle East.

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