Demand for cheaper lodging in relation to the growing Philippine tourism industry is creating growth potential for the shared accommodations industry, according to real estate analysts.
In a phone interview on Friday, Leechiu Property Consultants (LPC) Chief Executive Officer David Leechiu said cheap accommodations are still hard to find in the Philippines.
“People are still looking for cheap accommodations. So we think, the Airbnb will continue to service the market, both local and foreign travelers,” Leechiu said.
Airbnb is the top shared accommodations platform in 191 countries with more than 2 million rooms or apartments for rent.
Leechiu pointed out the domestic tourist sector provides a larger market for the shared accommodation industry.
Data from the Department of Tourism show that domestic travelers account for 92 percent or 40.4 million of the 44 million foreign and domestic tourists in the Philippines in the first half of 2016.
In contrast, foreigners account for only 8 percent or 3.6 million of the tourist market.
“There are many provinces that have no hotels or only have one hotel. So Airbnb is the one supplying that market,” Leechiu said.
He noted that investors are buying condo units to rent it out on the home sharing platform. “We have a lot of investors that have bought cheap condo units in Manila or Boracay or Tagaytay just to cater to this market. So they can provide cheap, reasonable and safe accommodation to travelers.”
Meanwhile, Jones Lang Lasalle Philippines head of Research Claro Cordero Jr. noted the shared accommodation industry is becoming popular among travelers due to the ease of transaction and evolving technological innovations.
The shared accommodation industry (primarily, Airbnb) account for 5 percent of total room inventory and around 2 percent of occupied room nights in Southeast Asian cities such as Singapore, Bangkok and Kuala Lumpur.
“We expect the number of listings to grow to 15 percent of total inventory and 5 percent of occupied room nights by 2020,” Cordero said.
However, this may be lower in the Philippines. “Our estimate is that the figures will be the around same, if not slightly below, the average as that of the key Southeast Asian cities,” Cordero said.
Connectivity is one of the factors that may affect the growth of shared accommodations in the country.
“In the Philippines, the challenge is the lack of available inventory and connectivity issues (which also includes cyber security issues that hamper the growth if e-commerce in the country),” Cordero noted.
Leechiu noted that despite the growth potential of the industry, he does not see it as something that would take over the hotel industry.
“I don’t think so, for one, again – I only have the numbers for Metro Manila – maybe by now 18,000 hotel rooms. I don’t think the Airbnb market is coming anywhere close to that level,” Leechiu said.