High End Leisure Property, Hotel and Spa
Market Overview – Executive Summary
October 2013
Prepared by:
Julius Guevara
Lila Santelices
Prepared for:
Roxaco Land Corporation
High End Leisure Property, Hotel and Spa Market Overview
COLLIERS INTERNATIONAL PHILIPPINES, INC. PAGE 2
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TABLE OF CONTENTS
1 EXECUTIVE SUMMARY ......................................................................................... 3
1.1 THE PHILIPPINE ECONOMY AND ITS DRIVERS .......................................................... 3
1.2 PHILIPPINE HOTEL INDUSTRY OVERVIEW ................................................................ 4
1.2.1 DEMAND DRIVERS ................................................................................................. 4
1.3 PHILIPPINES HOTEL INVENTORY ............................................................................. 4
1.3.1 METRO MANILA HOTELS ........................................................................................ 5
1.3.2 TAGAYTAY HOTEL MARKET .................................................................................... 6
1.3.3 LUXURY RESORT HOTELS IN SELECT AREAS .......................................................... 7
1.4 HIGH END SPA INDUSTRY OVERVIEW ................................................................... 10
1.5 LEISURE PROPERTY MARKET............................................................................... 11
2 CONCLUSION ....................................................................................................... 12
High End Leisure Property, Hotel and Spa Market Overview
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1 EXECUTIVE SUMMARY
1.1 THE PHILIPPINE ECONOMY AND ITS DRIVERS
The Philippines is no longer the “sick man” of Asia. The renewed faith in the Philippine national
government led by Pres. Benigno Aquino III is reflected in the resurgence of the economy. In 2012, the
country’s Gross Domestic Product (GDP) grew by 6.6%, making it one of the highest in Asia. The
Philippines’ stellar economic performance continued as GDP growth registered at 7.6% in the first half of
2013. The country has also notably sustained its strong economic performance amid the economic
recession in many parts of the world, performing better than any other economies in Asia. This has
resulted to an investment grade rating from major international credit rating agencies Fitch Ratings,
Standard & Poor’s and Moody’s.
Various factors have contributed to the current growth trend that the country is experiencing. The
economy is continuously propelled by the many Overseas Filipino Workers (OFWs) who have
significantly helped the national economy to move forward through their growing remittances from
abroad. Their accumulated remittances have fuelled the Philippine economy to become more resilient
and competitive globally.
Incomes have also been growing steadily, increasing by 4.6% between 2006 and 2009.
As a result, household consumption is on the rise, growing by 6.6% in 2012, and is a major contributor
to the economy. Because of the growing incomes, substantial increases in spending related to
recreation and culture (+9.1%) and hotels and restaurants (7.1%) has been seen. With the sustained
increase in the level of remittances backed by strong consumer confidence, spending will likewise
expand moving forward.
Low interest rates are another key contributor to the national economy. Lending rates have dropped to
levels that have never been seen before, allowing businesses to access capital at a very attractive rate.
On the other hand, lower interest rates have been a bane to more traditional investors who rely on bank
investments. Since yields have fallen, alternative investments such as mutual funds and real estate
have become more popular.
The increase in sales of luxury goods is a reflection of the renewed vitality of the Philippine economy, as
consumers with increased spending power coming from remittances or higher salaries are quick to
acquire goods that reflect their newfound place in society. This is evident in the new wave of global and
luxury brands coming into the Philippine market, such as Uniqlo, Brooks Brothers and Stefanel. Rolls
Royce, Bentley and Peugeot have also established local branches to cater to the growing affluence.
Distributors and local branches of brands such as Louis Vuitton, Salvatore Ferragamo, Armani
Exchange and Mango have seen their sales grow annually by an average of 28% from 2006 to 2011.
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1.2 PHILIPPINE HOTEL INDUSTRY OVERVIEW
1.2.1 DEMAND DRIVERS
In its 2012 publication on world tourism highlights, the United Nations World Tourism Organization
(UNWTO) observed that emerging economies have grown faster, and will continue to grow faster than
developed economies. The number of visitors coming to the Philippines from abroad has been steadily
increasing over the past few years. Tourists have continued to come to the Philippines despite several
recent natural and economic disasters, and arrivals exceeded the 4-million mark for the first time in
2012, propelling the all-time high to 4.3 million tourist arrivals. Moving forward, the government is
targeting tourist arrivals of 10 million by 2016. Colliers sees a more conservative figure of around 7
million in 2016 and 10 million in 2018 would most likely transpire.
Figure 1: Philippines Foreign Visitor Arrivals vs GDP Growth
Source: National Statistical Coordination Board, Department of Tourism, Colliers International Research (forecasts)
Improvements in the country’s infrastructure over the past few years have enhanced the accessibility of
the various tourist destinations. For example, the construction and upgrading of the Busuanga Airport in
Palawan in 2007 have helped in the increase of tourists visiting the popular resort town of Coron. Other
improvements include the planned expansion of the passenger terminal of the Mactan International
Airport in Cebu. Improvements on Terminal 3 of Manila’s Ninoy Aquino International Airport and a
planned expressway between the airport and the gaming and entertainment district are also underway.
In tandem with the Department of Public Works and Highways (DPWH), the Department of Tourism
(DOT) has allotted P12 billion for road infrastructure projects in 2013 plus another P14.4 billion in 2014.
1.3 PHILIPPINES HOTEL INVENTORY
Based on data from the DOT presented in the Philippine Economic Briefing in September 2013, a total
of 80,162 rooms are available in the country with an additional 9,690 rooms in the pipeline. In Metro
-
2,000,000
4,000,000
6,000,000
8,000,000
10,000,000
12,000,000
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013F
2014F
2015F
2016F
2017F
2018F
GDP Growth(LHS) Visitor Arrivals (in Millions, RHS)
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Manila & CALABARZON, there are currently 37,311 rooms and an upcoming stock of 7,330 rooms,
bringing the total number of rooms to 44,641 by 2016. However, approximately 10,177 rooms are still
needed to meet the room demand of 54,818 rooms.
Table 1: Room Projections from 2013 to 2016
Critical Cluster Destinations
Room Demand
Available Rooms
In the Pipeline
Room Gap
Metro Manila & CALABARZON
54,818
37,311
7,330
10,177
Central Visayas
41,402
27,447
2,124
11,831
Bicol
15,804
8,549
130
7,125
Cordillera
9,851
6,855
106
2,890
Total
121,875
80,162
9,690
32,023
Source: Department of Tourism, Philippine Economic Briefing Sept. 2013
1.3.1 METRO MANILA HOTELS
In 2012, Metro Manila’s hotel room count increased by 10% to reach 17,000. The anticipated rise in
tourist arrivals coupled with the heightened levels of casino hotel development will lead to a sharp
increase in hotel room stock until 2018, reaching over 32,000 rooms. These new developments are
mostly in Makati, BGC and the new Pagcor Entertainment City casino gaming area in Paranaque City. In
terms of demand, Metro Manila hotel occupancy rates reached 73% in 2007 right before the Global
Financial Crisis hit. It then gradually dipped as the number of hotels increased. Occupancy rates are still
quite stable despite the surge in hotel room supply, and have been holding in the high 60’s.
Table 2: Metro Manila Hotel Room Supply and Average Occupancy Rates
Source: Department of Tourism
0%
10%
20%
30%
40%
50%
60%
70%
80%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
No. of Rooms Occupancy Rate
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1.3.2 TAGAYTAY HOTEL MARKET
Tagaytay City is famous for its cool weather and tourist destinations, offering great dining options and
accommodations as well as scenic views of Taal Lake and Volcano. It is one of the most popular
weekend destinations of Manila locals, as well as foreign tourists, and it is only a 1 to 1 ½ hours’ drive
from Manila.
Tourist arrivals in the provinces which cover the Tagaytay area have been rising. Batangas tourist
arrivals increased by 61.27% in 2011. Cavite meanwhile, increased by 37.79%, upping the arrivals to
1,770,500 in 2011. For Tagaytay, while a slight dip in visitors occurred in 2012, Colliers believes that the
general upward trend in visitors to the Tagaytay area will continue in the future. Tourists usually peak
during the summer months of April and May as visitors escape the heat, while a second wave is
experienced by the end of the year when overseas Filipinos take their holidays back in the country.
Figure 2: Total Seasonal Arrivals 2008-2012
Source: Tagaytay City Tourism & Cultural Office
Note: Consolidated visitor data for People’s Park and Picnic Grove.
1.3.2.1 TAGAYTAY HOTEL COMPETITIVE SET
Five (5) hotels were chosen to be the competitive set for the Project. Taal Vista Hotel is the most
popular and the largest in terms of number of rooms included in the set. Other hotels in the area that are
included are One Tagaytay Place and Summit Ridge Tagaytay. Discovery Country Suites and
Crosswinds Tagaytay are included because of their market positioning.
Table 3: Competitive Set for Tagaytay
Establishment
# of Rooms
Occupancy
Rate
One Tagaytay Place
115
60 - 70%
Taal Vista Hotel
261
60 - 70%
Summit Ridge Tagaytay
108
50 - 60%
1,204
1,387
1,517
1,515
1,446
-
400
800
1,200
1,600
2,000
2008 2009 2010 2011 2012
in Thousands
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Establishment
# of Rooms
Occupancy
Rate
Discovery Country Suites Tagaytay
7
50 - 60%
Crosswinds Tagaytay
27
60 - 70%
Average
101
61%
Total
507
Source: Colliers International Research
Hotel occupancy rates in Tagaytay are generally the same, ranging from 50 to 70%. This is an
acceptable level, considering that the research was conducted during the lean season. Crosswinds
Tagaytay, One Tagaytay Place and Taal Vista Hotel performed slightly better, with an occupancy rate
range of 60-70%.
Among the samples, Discovery Country Suites has the highest room rates, with its least expensive at
P12,500, which is higher than the priciest room in Taal Vista Hotel. Taal Vista Hotel in the meantime
has the lowest priced rooms at P5,648 to P8,790 per night. Based on the published rates, the average
cost per room night for all room types is at P10,068. For the lowest priced rooms, the average is at
P6,207, while for the rooms with the highest rate, the average is at P11,159.
Table 4: Hotel Room Published Rates
Establishment
Published Rates in Php (USD)
Corporate Rates
Low
High
Low
High
One Tagaytay Place
6,800 ($158)
12,888 ($300)
4,450 ($103)
9,872 ($230)
Taal Vista Hotel
5,648 ($131)
8,790 ($204)
4,800 ($112)
6,500 ($151)
Summit Ridge Tagaytay
6,550 ($152)
14,000 ($326)
5,005 ($116)
9,800 ($228)
Discovery Country Suites Tagaytay
12,500 ($291)
18,500 ($430)
6,000 ($140)
12,800 ($298)
Crosswinds Tagaytay
6,000 ($140)
15,000 ($349)
3,800 ($88)
13,000 ($302)
Average
6,207 ($144)
11,159 ($260)
4,749 ($110)
8,260 ($192)
Source: Colliers International Research
1.3.3 LUXURY RESORT HOTELS IN SELECT AREAS
1.3.3.1 PHILIPPINE LUXURY RESORT HOTELS
With about 7,107 islands, the Philippines has dozens of world-class beaches where a number of luxury
resorts with top of the line amenities are located. These high-end resorts are typically marketed as
relaxing and luxurious hideaways for those wanting an escape from the bustling and hurried city life. The
resorts included in the competitive set are considered as among the most exclusive and best luxury
resorts located in the country.
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Table 5: Selected Philippine Luxury Resorts
Establishment
Location
No. of Rooms
Occupancy
Shangri-La Mactan
Punta Engano, Mactan, Cebu
530
65 - 70%
Amanpulo
Pamalican, Palawan
40
70 - 80%
El Nido - Pangulasian Island
Bacuit Bay, Pangulasian Island
42
50 - 60%
Misibis Bay
Cagraray Island, Bacacay, Albay
86
40 - 50%
Shangri-La Boracay
Boracay Island, Malay, Aklan
219
70 - 80%
Dedon
Siargao, Surigao del Norte
9
50 - 60%
Eskaya Bohol
Panglao Island, Bohol
15
70%
Balesin
Balesin Island, Quezon
267
Not available
Total Rooms/Villas
1,208
Average
151
63%
Source: Colliers International Research
Among the high-end resorts surveyed, Amanpulo in Palawan with 70-80% had the highest occupancy
rates for the month of August. Meanwhile the El Nido Pangalusian Island resort registered the lowest
occupancy rate at only around 50-60%. An average of 63% occupancy could be found for these resorts.
Table 6: Philippine High End Resort Published Room Rates
Establishment
Published Rates in Php (USD)
Low
High
Shangri-La Mactan
12,400 ($288)
31,750 ($738)
Amanpulo
44,075 ($1,025)
219,300 ($5,100)
El Nido - Pangulasian Island
30,500 ($709)
124,000 ($2,884)
Misibis Bay
21,285 ($495)
60,802 ($1,414)
Shangri-La Boracay
18,000 ($419)
67,000 ($1,558)
Dedon
18,705 ($435)
36,550 ($850)
Eskaya Bohol
30,100 ($700)
181,804 ($4,228)
Balesin Island Club
Not applicable
Not applicable
Source: Colliers International Research
The resort with the highest room rate among the competitive set was Amanpulo, with its most affordable
casita priced at P44,075 per night, and its most expensive villa is at P219,300. The least expensive
published rate in the sample set was Shangri-La Mactan with rates ranging from P12,400 to P31,750.
Based on available finance reports, we estimate that the average daily rate in 2011 of Amanpulo was
P12,741, while Eskaya enjoyed an ADR of P7,291.
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1.3.3.1.1 TRAVEL TIMES FROM MANILA
One vital factor that tourists take into consideration when planning their trips is the travel time to the
destination resort or vacation spot. This is essential since opportunities for long vacations may be
limited, and vacationers would want to maximize their time away for more leisurely pursuits.
Table 7: Minimum Travel Times
Resort
By Land
By Air
By Sea
Minimum Travel Time
Shangri-La Mactan, Cebu
20-30 mins
3 hours
3 hr 20 mins
Amanpulo, Palawan
3 hr 10 mins
3 hrs 10 mins
El Nido - Pangulasian Island,
Palawan
3 hours
25 mins
3 hrs 25 mins
Balesin Island Club, Quezon
2.5 hours
2.5 hours
Misibis Bay, Albay
9 hrs
45 mins
3 hours
3 hrs 45 mins
Shangri-La Boracay, Aklan
3 hours
15 mins
3 hrs 15 mins
Dedon Island, Siargao
30-40 mins
3 hours
45 mins
4 hrs 15 mins
Eskaya Bohol
30 mins
3 hr 10 mins
3 hrs 40 mins
Source: Colliers International Research
Note: Maximum time at the airport for check in and boarding is only assumed to be 2 hours
1.3.3.2 LUXURY RESORT HOTELS IN THE REGION
To provide a picture of how luxury resorts are being positioned elsewhere in Southeast Asia, data from a
sampling of high end resorts in various countries in the region were compiled:
Table 8: Selected Regional High End Resorts
Establishment
Location
No. of Rooms
Four Seasons Bali at Sayan
Sayan, Gianyar, Ubud, Bali, Indonesia
60
Amandari
Kedewatan, Ubud, Bali, Indonesia
30
Amantaka
Luang Prabang, Laos
24
Evason Hua Hin
Pranburi, Thailand
185
Average
75
Total
299
Source: Colliers International Research
For the regional set, resorts in Bali, Indonesia have priciest rates with the Amandari resort having the
most expensive rate at P176,300 per night for a 1,500 sq. m. villa serviced by two staff. This is followed
by P100,620 per night at Four Seasons Bali at Sayan, also located in Bali. Rates at Evason Hua Hin are
the lowest among the regional resorts with prices ranging from P6,414 to P11,291.
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Table 9: Regional High End Resort Published Rates
Establishment
Published Rates in Php (USD)
Low
High
Four Seasons Bali at Sayan
19,780 ($460)
100,620 ($2,340)
Amandari
40,850 ($950)
176,300 ($4,100)
Amantaka
34,400 ($800)
77,400 ($1,800)
Evason Hua Hin
6,414 ($149)
11,291 ($263)
Source: Colliers International Research
1.4 HIGH END SPA INDUSTRY OVERVIEW
Health and wellness along with medical tourism is becoming a more popular trend nowadays in the
Philippines. According to the Business Monitor, health and wellness tourism in the country increased in
current value by 18% in 2012. It is also expected to increase at a compounded annual rate of 16% over
the next few years, as it will be boosted by the Department of Tourism’s efforts in increasing the number
of tourist arrivals to 10 million by 2016.
Locally and regionally, a number of hotels and resorts in popular tourist destinations already have their
own spa service providers for their guests to provide a relaxed and stress-free experience. Notably,
Tagaytay City is a popular destination of resort spas and health and wellness centers outside of Metro
Manila. Given that it is only an hour and a half away from the capital, it is a popular choice for quick
getaways for rest and recreation.
Luxury spas offer a diverse range of beauty and wellness treatments, massage services, body scrubs
and other salon treatments. Most of these spas also have Jacuzzis, steam rooms, saunas and
swimming pools. Luxury spas usually offer the typical variants of spa treatments, particularly Swedish,
Shiatsu, Thai and the traditional Hilot (Filipino massage).
For spas located in the resorts around the Southeast Asian region, treatments and services are also
designed based on the cultural and religious traditions in the local community. Moreover, these high-end
spas offer not only spa treatments, gourmet meals and other typical amenities, but also physical
activities such as yoga, meditation and aerobics.
Some of the spas that are considered as major players or the most prestigious and luxury-oriented in
the country include CHI The Spa at Shangri-La, The Nurture Spa, The SPA, The Farm at San Benito,
Mandala Spa, Asmara Spa and SeriAsia Spa. Some spas located in Southeast Asia that were also
assessed were The Spa at Four Seasons Sayan at Bali (Bali, Indonesia), Amadari Resort Spa (Bali,
Indonesia) and the Earth Spa in Evason Hua Hin (Pranburi, Thailand).
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1.5 LEISURE PROPERTY MARKET
Demand for residential products located in areas known to be as leisure destinations has been growing
over time. Buyers will either use it as their second home or a weekend getaway, while the others treat it
as an investment as they see the potential for capital appreciation. These properties range from beach
houses, mountain resort properties, golf related homes to farm lots, and are found in popular vacation
areas such as Tagaytay, Batangas, Subic, Boracay and Baguio.
The graph below shows the number of residential-leisure units that were absorbed by the market.
Figure 3: Residential Leisure Property Sales (2010 – 2012)
Source: Colliers International Research
Note: Covers residential condominium units, open lots and H&L units in selected areas of Tagaytay, Laguna, Batangas, Rizal,
Quezon Province, Cebu, Davao and Cagayan De Oro City.
While leisure properties have become popular over the past few years, appealing to those craving for a
secondary home for vacations, developers have also started to offer real estate investments with a
recurring income component. Taking advantage of areas where tourists flock, projects known as
“condominium-hotels”, also popularly known as “condotels”, have been offered to the investment
market. With this concept, unit owners may have an option to enroll their units in a pool and be rented
out as a hotel room. This type of investment is more enticing than the typical leisure property because of
the annual returns that it could deliver.
2,898
3,051
3,889
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2010 2011 2012
No. of Units
Take Up
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2 CONCLUSION
Anya Resorts and Residences is a first-class leisure development offering the best of Tagaytay to
discerning travelers and pleasure seekers. As the Philippines’ first true luxury, wellness hotel and resort
brand, Anya offers its guests a unique experience through the partnership of several highly reputable
organizations such as the Small Luxury Hotels of the World, Fuego Hotels, and Devarana Spa of Dusit
Hotels. Set in an idyllic spot in Tagaytay’s rolling hills, amid streams, lush gardens and tasteful Filipino
architecture, Anya’s guests can find a quiet getaway where they can truly relax in luxury.
Colliers believes that Roxaco Land Corp. is offering an investment proposition of exceptional value in
Anya Resorts and Residences Tagaytay. Given the foreseen strength of the Philippine economy, a
growing demand for luxury products and services, a rising tourism industry and the increasing demand
for weekend retreat facilities that are close to Metro Manila, we believe that Anya would be strategically
placed to fulfill an increasing demand for luxury resort hotel and spa services.
Our market research has confirmed the strength of the hotel industry not only in Tagaytay but the rest of
the Philippines as well. We have also seen that there are very limited viable options in terms of luxury
weekend retreats that are close to Metro Manila, since most options would require air travel in order to
access these resorts and spas. The competitive sets for both the Tagaytay hotels and top Philippine
luxury resorts both had an average occupancy of over 60%. Our findings indicate that Anya’s minimum
targets for average daily room rate (P7,900) and occupancy rate (49%) are within range of those being
experienced by the leading luxury hotel and resorts in the country, hence offering a conservative and
achievable projection of the property’s performance.
We believe that once the vision for Anya Resorts and Residences materializes, it can take its place
among the top luxury resort destinations in the Philippines and the region.
