The local real estate industry is experiencing an upsurge after years of flat growth. The overall market confidence brought about by the new Aquino administration promises a rosy scenario for the sector over the next few years.
Strong performance across all residential product lines points to sustained demand for dwelling units. Shopping center projects likewise benefited from a very strong consumer spending base that has been expanding, thanks in no small part to the remittances sent by overseas Filipino workers (OFW).
And so long as the Philippines continues to be a preferred site for outsourcing services, office space builders can expect a continuous growth in demand from business process outsourcing firms.
Ranged against the sterling performance of other real estate products, investments in resorts and hotel projects have not been as buoyant. The international decline in tourism, brought about by the weakening propensity for leisure among citizens of developed countries, have caused this below par performance.
But things are looking brighter for the segment. For one, major real estate players are now adding hotel and resorts projects into their portfolio. Likewise, the increasing interest among foreign resort and hotel operators to locate themselves in local leisure spots is a source of optimism in the subsector.
The country actually has all the necessary elements needed to become a strong player in the resort tourism business. We have all the natural spots waiting to be developed, and all the manpower competencies to staff all the key positions for tourist facilities, from managers to front desk clerks. What we lack are more entrepreneurs to put up all these facilities in significant numbers.
Potential Investment Areas
Condotel projects in selected tourist areas should be further explored. OFWs and returning Filipinos could be invited as “passive investors,” particularly in the provinces and localities from which they originally came. Not only will they earn handsomely from their investments, they can also contribute to the growth and economic improvement of their hometowns.
Setting up health and wellness facilities is likewise a lucrative opportunity that’s worth exploring. Thailand and Indonesia are doing great here; and there is no reason why we can’t do the same.
Finally, retirement facilities and gaming sites are other investment possibilities that are just waiting to be tapped. Again, there is no dearth of qualified and competent local manpower to provide the needed staffing for these projects.
The Segment’s Critical Role
Apart from the inherent business rewards, leisure property’s major contribution to the economy should not be overlooked. Tourism dollars from increasing traffic in the medium term should go up dramatically, as we currently make only one third of what Thailand makes. The infrastructure and facilities investments in resorts and hotels create a lot of value added and multiplier effects to the rest of the country. Finally, the jobs created by escalating resort tourism investments should go a long way towards improving overall labor and employment rates.
All told, it is hoped that with all of these positive signals, a lot more investment activity among local entrepreneurs in the resort tourism subsector can be expected in the next few years.
Danilo A. Antonio is one of the Gurus for the Master in Entrepreneurship Program of the Ateneo Graduate School of Business. He is currently the president of the ACE Center for Entrepreneurship and Management Education, Inc. and the chief executive officer of Land Excel Consulting, Inc. (LEC). A former faculty member at the Asian Institute of Management, he handled the Development of Enterprise (DE) and Real Estate/Property Management and Finance elective of the AIM’s Master in Business Administration Program. For inquiries about the Ateneo’s Master in Entrepreneurship Program, call 8994579, 8997691 loc 2407.
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