Foreign hotel brands are accelerating their expansion in the Philippines as international visitor arrivals recover and developers prepare to add thousands of rooms, reinforcing long-term confidence in the country’s hospitality market, according to property consultancy Colliers Philippines.

In its H1 2026 Metro Manila Hotel Report published on Wednesday, Aug. 26, Colliers noted that international visitor arrivals reached 3.16 million in the first half, up 5.4 percent from 2.9 million a year ago. Arrivals from China and India surged 64.5 percent and 43 percent, respectively, following visa-free entry initiatives for eligible travelers.

The United States (US) overtook South Korea as the country’s largest source market with 581,565 visitors, up 6.5 percent, while South Korean arrivals fell 13.7 percent to 552,860. Japan ranked third with 232,297 arrivals, followed by China with 219,796.

“Higher international arrivals into the Philippines year-on-year are encouraging, but they are hardly a reason for complacency. We have yet to regain pre-pandemic visitor arrivals and hotel occupancy levels, which means the heavy lifting is far from over,” Colliers Philippines research director Joey Roi Bondoc said.

“The good news is that more hotels are in the pipeline, with foreign brands accounting for a significant share of upcoming supply. Their continued expansion signals strong confidence in the Philippine tourism’s long-term growth prospects,” Bondoc added.

Bondoc co-authored the report with Colliers Philippines assistant manager Martin Aguila and senior analyst Brent Respicio.

Despite recovering visitor arrivals, average hotel occupancy in Metro Manila eased to 63 percent in the first half from 65 percent in the second half of 2025, as the Middle East conflict affected the meetings, incentives, conferences, and exhibitions (MICE) segment and tempered demand.

Colliers expects occupancy to remain above 60 percent for the full year as inbound travel and in-person events recover. It also expects Metro Manila hotel occupancy to return to pre-pandemic levels by 2028.

Room rates, meanwhile, continued to strengthen despite softer occupancy. Average daily rates (ADRs) rose 2.4 percent half-on-half in the first six months, faster than the 1.7-percent increase in the second half of 2025, supported by stable domestic demand and in-person events in Makati central business district (CBD) and Fort Bonifacio.

Colliers raised its full-year ADR growth forecast to four percent from three percent.

The consultancy recorded 846 new hotel rooms delivered in Metro Manila in the first half and expects 2,490 rooms to be completed for the whole of 2026, lower than its previous forecast of nearly 2,900 rooms due to construction delays.

Among those expected to be completed are Dusit Greenhills Manila, Canopy by Hilton, Seda Hotel Arca South, and Mandarin Oriental Makati. The rebranding of Grand Westside Hotel to Mövenpick Manila Bay Westside is also expected before year-end.

From 2026 to 2029, Colliers expects nearly 2,000 new rooms to be completed annually, with Bay Area, Quezon City, and Makati CBD accounting for 71 percent of new supply. Foreign-branded hotels are expected to comprise nearly half of the additions.

Expansion is also moving beyond Metro Manila, with international brands including JW Marriott, Radisson Red, Sofitel, Pullman, Hilton, Ibis, Mercure, Wyndham Garden, Park Inn by Radisson, Asai, Dusit Princess, and Somerset expanding in the provinces of Cebu, Zambales, Pampanga, Bohol, and Laguna, as well as Cagayan de Oro City.

With substantial supply entering the market, Colliers recommended that developers focus on differentiated concepts such as lifestyle hotels, MICE-oriented developments, and serviced residences for expatriates, while carefully assessing location, market positioning, demand drivers, and competing supply to limit oversupply risks.

The consultancy also sees room for hospitality assets in the real estate investment trust (REIT) market, saying the extension of land lease terms for foreign investors to 99 years could enhance the stability and attractiveness of hospitality joint-venture arrangements and support higher asset valuations.

Colliers further urged tourism stakeholders to target more long-haul and high-spending source markets, strengthen medical tourism and retirement-related travel programs, and maintain closer public-private coordination to attract more tourism investments.