Paradise Meets Profits: Inside the Philippines’ Hotel Boom

After a pandemic-induced lull, the Philippines is experiencing a tourism renaissance. White-sand beaches and vibrant cities are once again teeming with visitors, fueling a frenetic boom in hotel development. In 2023 alone, the country welcomed 5.45 million international tourists – a comeback that exceeded official targets and generated 482.5 billion pesos in foreign visitor revenue. Total tourism receipts surged back above pre-pandemic levels, as both domestic and international travel roared with pent-up demand. The Department of Tourism (DOT) has reported that 2024 saw further gains, with nearly 6 million foreign arrivals contributing around 760.5 billion pesos in revenue – about 27% higher than 2019’s record. To meet this surge, the country needs an estimated 120,000 additional hotel rooms by 2028.

Developers are responding in a big way. A recent pipeline report tallied 158 new hotels (over 40,000 rooms) in development nationwide – a massive undertaking requiring about 250 billion pesos of investment. “That 40,000 room keys equate to approximately a 250-billion peso commitment over the following years,” said Alfred Lay, director for hotels at Leechiu Property Consultants, emphasizing the strong confidence in the sector’s future. Once these projects open their doors, they’ll directly employ an estimated 57,000 Filipinos in hospitality roles, and many more indirectly through supporting industries. The DOT, in partnership with the Philippine Hotel Owners Association, has laid out a Hotel Industry Strategic Action Plan aiming for 456,000 rooms nationwide by 2028 – up from about 335,000 rooms today – to accommodate a projected 11.5 million annual international visitors by that year. In short, both the government and the private sector are betting that the tourism boom is only just beginning.

Big Bets by Tycoons and Global Brands

Driving this hotel gold rush is a mix of homegrown conglomerates and international brands, all eager to stake their claim in the Philippines’ tourism upswing. The roster of investors reads like a who’s who of business: Megaworld, SM, Ayala, Robinsons, Filinvest, DoubleDragon – virtually every major Filipino property group has skin in the game – alongside global chains from Hilton to Marriott to Accor. The result is an unprecedented diversification of the hospitality landscape, from budget-friendly city hotels to opulent island resorts, and everything in between.

One headline-grabbing move came from Ayala Land, a respected Philippine developer that recently acquired the five-star New World Makati Hotel – a 578-room luxury landmark in Manila’s financial district. “New World Makati has long been a landmark in our Makati estate. This acquisition deepens our roots in the district and affirms our commitment to developing world-class destinations that blend business, leisure, and lifestyle,” said Ayala Land President Meena Dy. By operating the hotel through its Ayala Hotels & Resorts arm, the company can integrate the property into its broader ecosystem of malls, offices, and residences in Makati.

SM Hotels and Conventions Corp., the hospitality unit of the Sy family’s empire, has outlined a 10-billion peso expansion plan to add seven new hotels by 2029. Most of the upcoming SM hotels will carry the Park Inn by Radisson flag (a mid-market brand), reinforcing the company’s partnership with Radisson and its focus on the middle-class traveler segment. “This rollout reflects our belief in the long-term potential of the Philippine domestic travel and tourism market,” explained SM Hotels Executive Vice-President Peggy Angeles. By bringing internationally branded but affordably priced hotels to new locations, SM hopes to both fill a market gap and stimulate local economies.

Foreign hotel companies, seeing the same growth trajectory, are dramatically ramping up their Philippine presence as well. Hilton, for example, has identified the Philippines as a key expansion market in Southeast Asia. In April 2025, Hilton announced the signing of its first Hilton Garden Inn hotels in the country, slated for Quezon City (Metro Manila) and Mactan, Cebu. These mid-scale hotels will mark Hilton’s third brand entry in the Philippines and come as part of a strategy to triple the chain’s regional footprint of focused-service hotels in the coming years. “Hilton Garden Inn is one of our fastest-growing brands in Southeast Asia,” said Maria Ariizumi, Hilton’s Vice-President for development in the region. “The Philippines is a strong focus for Hilton, as we see the massive long-term tourism potential for the country… this is just the beginning of our exciting growth story in the market.” Other global chains are making similar bets: Marriott opened new branches in Manila and Clark; IHG (Holiday Inn) has projects in Palawan; Accor is introducing brands like Raffles and Pullman in upcoming developments; and Radisson is planting more Park Inns nationwide via partners like SM. Even the ultra-luxury segment is gaining international attention. In mid-2025, Cebu’s newly opened NUSTAR Hotel earned a spot on the prestigious Michelin Guide’s list of recommended hotels, joining a select group of 11 Philippine properties recognized by Michelin for exceptional hospitality standards. “The NUSTAR Hotel’s presence in the prestigious Michelin Guide is a proud and significant milestone... It affirms our commitment to delivering exceptional, world-class experiences that celebrate Filipino culture,” said NUSTAR’s COO Sean Knights upon the honor.

Amid this optimism, it’s not just new buildings rising – it’s entire ecosystems of travel and leisure. Integrated casino resorts have transformed Manila’s entertainment scene in the past decade (with complexes like Solaire, City of Dreams, and Okada Manila drawing high-rollers from around Asia), and now similar mega-projects are taking shape in Clark and Cebu, aiming to capture gaming, events, and convention business. Clark exemplifies this trend. It has rapidly become a magnet for tourism investment by combining casino resorts with championship golf courses and ample MICE facilities, creating a more laid-back but upscale alternative to Metro Manila’s gaming strip. The government’s aggressive infrastructure push, from modernizing airports to building new highways, dovetails with these private investments. For instance, Manila’s main international airport hit a record 50.1 million passengers in 2024 (up 10% from 2023), and Cebu’s airport handled over 11 million. Meanwhile, Clark International Airport in Central Luzon is steadily emerging as a major aviation hub. With its sprawling new passenger terminal, Clark is positioning itself as a premier gateway for North and Central Luzon. Tourism Secretary Christina Garcia Frasco has touted a new National Tourism Development Plan and lauded the industry’s rebound, calling tourism a “pillar of economic growth” and highlighting initiatives to sustain momentum. There’s a palpable sense that the Philippines is, at long last, on the cusp of a tourism boom to rival those of its neighbors like Thailand and Vietnam. Both big conglomerates and small entrepreneurs are determined not to miss the moment.

Boutique Ventures and Individual Investors

Not all the action is by corporate giants; the hotel boom also extends to boutique ventures and individual investors carving out their niche. As travelers seek more personalized and authentic experiences, smaller independent hotels are flourishing alongside the big chains. In destinations like Siargao, Bohol, and Palawan, local entrepreneurs and foreign retirees alike have opened charming bed-and-breakfasts, surf lodges, and eco-resorts that cater to specific segments of the market. These boutique properties, often with fewer than 50 rooms, can command premium rates by offering unique designs, intimate service, and a strong sense of place. For example, one family-run boutique resort in Baler (a surfing town in Luzon) reported a 75% increase in bookings after embracing online marketing and reservation technology – illustrating how even a 15-room beach hotel can ride the tourism wave with savvy business moves. Many such properties leverage local culture and natural beauty as selling points, whether it’s a heritage mansion-turned-hotel in a historic city, or a cluster of beach bungalows built with sustainable materials. The success of these small-scale investments shows that “authenticity” is an asset: today’s travelers are willing to pay for a memorable stay that reflects Filipino warmth and creativity, rather than just a generic room.

Importantly, the boom is opening doors for individual investors – even without building hotels from scratch. One innovative model gaining traction is the “condotel” or hotel residence concept, which allows people to purchase hotel rooms or suites as investment units. A notable pioneer is Hotel101, a subsidiary of DoubleDragon Corp., which sells standardized 21-square-meter hotel rooms to individual buyers and then operates them as part of a hotel network. Investors earn a share of the room revenue while Hotel101 handles the management. This micro-ownership approach has proven so successful domestically that Hotel101 is now expanding internationally: it currently has two hotels in the Philippines and projects under development in Japan, Spain, and the U.S., and it aims to reach 25 countries by 2026. The concept effectively turns real estate buyers into hotel stakeholders, providing an asset-light way for the company to raise capital while giving small investors a slice of the tourism pie. DoubleDragon’s founders – including Jollibee Foods tycoon Tony Tan Caktiong – are so bullish on the model that they are taking Hotel101 public via a Nasdaq listing, valuing it at over 2.3 billion dollars. “We believe a Nasdaq listing will help accelerate our global expansion plans,” said Hotel101 CEO Hannah Yulo-Luccini, underscoring the ambition to scale up. Other developers are also offering condotel units and branded residences tied to hotel operations (for instance, SM’s Tagaytay and Baguio projects, and international chains like Ascott selling serviced apartments). For individual investors, these schemes provide a hands-off investment with the potential for both capital appreciation and high rental yields – a particularly attractive proposition given the Philippines’ high hotel occupancy rates and rising room prices in many markets.

Whether through direct ownership or innovative investment products, the message is clear: the hospitality boom isn’t just benefiting corporate boardrooms, but also creating opportunities for smaller investors to profit. Industry surveys indicate that confidence is sky-high. In a 2024 poll by Leechiu Property Consultants, 89% of hospitality investors expressed confidence in the medium-term growth of the Philippine hotel industry, and 64% expected their gross operating profits to exceed 30% for the year. These bullish sentiments are backed by solid data – record tourist arrivals and thousands of new rooms under construction.

The Road Ahead: Sunny Skies for Hotel Investors

As the Philippine hotel boom marches on, the country finds itself awash in optimism and opportunity. Travel demand – both international and domestic – shows no sign of abating. Key source markets like South Korea and the U.S. are sending visitors in record numbers (over 1.4 million Koreans visited in 2023, for instance, reclaiming their spot as the #1 tourists), and new markets are opening up as well. Meanwhile, millions of Filipinos are traveling within the country each year, further filling up hotels from Luzon to Mindanao. This broad base of demand provides a robust foundation for investors: unlike some destinations that rely almost solely on foreign tourists, the Philippines enjoys diverse revenue streams from both its growing middle class of domestic travelers and vacationers from abroad. It’s one reason why total tourism earnings recovered so quickly – hitting all-time highs by 2024 – and why savvy investors are positioning themselves to capture that growth.

Of course, sustaining a boom requires careful execution. The government is working closely with industry stakeholders to ensure supporting infrastructure keeps pace – building better airports, roads, and utilities to serve new hotels. Initiatives are also underway to improve training for hospitality workers and to promote lesser-known destinations, spreading the benefits of tourism more evenly. For investors, these efforts mean a healthier long-term environment in which their properties can thrive.

By most indications, the outlook remains extremely bright. The DOT is targeting ~7.7 million international arrivals in 2024 and beyond, moving steadily toward the 10+ million range in a few years. If global economic conditions stay favorable, some analysts believe the Philippines could even surpass those targets, given its vast untapped potential in areas like dive tourism, cultural heritage tours, and meetings and conventions. Every new direct flight route or cruise ship port call adds to that potential. Major events – from international conferences to sports tournaments – are increasingly choosing Philippine venues, further boosting hotel occupancy.

For investors, whether large or small, the Philippine hospitality sector offers an enticing equation: rising demand + limited supply = opportunity. Tourists leave with memories of stunning sights and great stays, and investors leave (or stay) with the satisfaction of being part of a rising market. As one industry veteran quipped, “As the sun sets over the Philippine archipelago, it rises on an era of opportunity – where paradise and profit can finally go hand in hand.” The challenge for the country is to keep this momentum going. If current trends continue, the paradise of the Philippines could very well become synonymous with profits for those who have invested in its future – a true win-win for both the economy and all lovers of travel.