The Metro Manila hospitality sector is on track to reclaim its pre-pandemic occupancy levels by 2028, according to real estate services firm Colliers Philippines, as surge in domestic travel offsets the massive wave of new hotel room openings.

Average hotel occupancy in the national capital region (NCR) is projected to climb to 65 percent in 2025 and 68 percent in 2026, eventually hitting the 74 percent benchmark seen before the global health crisis by 2028. 


According to Colliers, the recovery comes as the market prepares to absorb the highest volume of new inventory in nearly a decade.

Colliers expects 2,890 rooms to be completed in 2026, the highest level of new supply since 2018, as projects in the Makati central business district, the Bay Area, and Quezon City that were deferred during the pandemic finally come online.

The supply pipeline remains aggressive through the end of the decade. From 2026 to 2029, Colliers forecasts an annual average completion of 1,800 rooms, with international brands accounting for 52 percent of the incoming inventory.

High-profile openings slated for the near term include Somerset Valero Makati, Seda Hotel Arca South, Wyndham Garden Manila Bay, Canopy by Hilton, and Dusit Greenhills Manila. The Bay Area and Makati CBD are expected to represent two-thirds of this total new supply.

While the physical footprint of the industry expands, the Philippines continues to struggle with international visitor numbers that lag behind regional Southeast Asian peers. Foreign arrivals dipped to 5.87 million in 2025, missing government targets and falling slightly below the 5.95 million recorded in 2024. 


Collier said the decline was attributed largely to cooling demand from the South Korean and Chinese markets, which have historically been pillars of the local tourism economy.

In the absence of robust international rebound, domestic travelers have become the industry’s primary lifeline. Government data from 2024 showed overnight travelers reached 63.9 million, up from 55.3 million the previous year.

Total domestic trips grew to 134 million from 122 million in 2023. Although the Department of Tourism is eyeing a 13 percent increase in foreign arrivals for 2026, the local market remains the most reliable driver of room nights and revenue for hotel operators.

Joey Bondoc, Colliers Philippines research director, noted that the combination of sustained local demand and a resurgence in in-person corporate events will support the gradual climb in occupancy.

While the delivery of new rooms slowed to 739 in 2025 from 2,865 in 2024, the impending 2026 supply spike will test the market’s capacity to maintain price stability.

Despite these headwinds, the firm maintains that the long-term trajectory of the capital’s hospitality assets remains positive, as the supply-demand gap narrows toward 2028.