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Mactan-Cebu Airport Expansion Seen to Boost Tourist Arrivals in Cebu

THE COMPLETION of the Mactan-Cebu International Airport (MCIA)’s expansion by 2018 is seen to further boost tourist arrivals in Cebu, effectively ramping up the need for more hotel and resort-oriented projects in the region.

Consultancy firm Colliers International said in a statement on Tuesday that the P17.5-billion public-private partnership (PPP) should entice more airlines to mount direct flights to Cebu, which has consistently been ranked as one of the most visited destinations in the country.
“Cebu’s rising attractiveness as a tourist spot and growing competitiveness as an investment destination should support a 15% to 20% growth in tourist arrival’s over the next 12 months,” Gerard Padriaga, general manager of Colliers’ Cebu office, was quoted as saying in the statement.

MCIA’s new terminal will have a total capacity of 12.5 million tourists per annum, almost thrice the capacity of the airport’s old facility.

In January to November 2016, Cebu recorded a total of 3.46 million domestic and foreign tourists, rising 12% year-on-year. The consultancy noted that Cebu outranked other key destinations such as Camarines Sur, Davao, Iloilo, Negros Occidental, and Palawan in terms of tourist arrivals.

“Cebu serves as the jump-off point to other Visayas and Mindanao destinations, hence the need to expand its airport’s capacity,” according to Colliers.

As of March 2017, the PPP Center reported that the project is 51% completed. The project’s private developer GMR-Megawide Cebu Airport Corp. meanwhile said that it is on track to reach the target completion date of June 2018.

Other than MCIA, Colliers highlighted the Cebu-Cordova bridge and proposed Bus Rapid Transit (BRT) prioritized under the Duterte administration as other projects that could ease travel within the city.

“These major road transport projects should complement the rehabilitation and upgrading of national and local roads being undertaken by the Department of Public Works and Highways,” the firm stated.

The 8.25-kilometer Cebu-Cordova bridge is a project of Metro Pacific Tollways Development Corp. which was launched last month. The P10.6-billion BRT in Cebu meanwhile is set to be operational by 2018.

Cebu’s tourism industry could also benefit from the lowering of airfares as airlines compete for bigger market share and the approval of the ASEAN Multilateral Agreement in Air Services. This deal would allow Philippine carriers to fly an unlimited number of times to capital cities of ASEAN-member nations.

The country’s recent signing of an agreement with the Chinese government on tourism cooperation is another factor, with the possible increase in capacity entitlements in air services meant to encourage airlines to open new flights between Philippine and Chinese cities.

In January alone, Chinese tourists accounted for 85,948 arrivals, soaring by 76.46% from 2016’s figures during the same period.

The city’s emergence as a destination for meetings, incentives, conventions, and exhibitions is further expected to ramp up arrivals in Cebu. For instance, Cebu paid host to a number of Asia Pacific Economic Cooperation ministerial meetings as well as the preliminary events for the 2016 Miss Universe pageant.

“With growing interests in Cebu as a MICE destination in the region, we encourage developers to apportion a bigger space for conference rooms and other similar facilities,” Mr. Padriaga said.

Cebu-based Gaisano Capital Group has already started picking up on this area, as it launched a 1500-sear Mactan Island Convention Center in 2016.

Various real estate developers are also entering the Cebu market in support of the demand in accommodation facilities. Singapore-based serviced residences operator The Ascott Ltd. is looking to open Citadines Cebu City in 2019 and Somerset Gorordo in 2021; Ayala Land Hotels and Resorts Corp. targets to open the 214-room Seda Hotel by 2019; and Double Dragon Properties Corp. unveiled plans of building Jinjiang hotels. Colliers also listed Rockwell Land’s Aruga resort, Duros Land’s 23 Minore Park Hotel, Grand Land and Dusit International’s Dusit Princess Hotel, and Megaworld’s hotels under the Belmont brand as notable projects in the city.

The increase in tourist arrivals has effectively hiked Cebu’s overall occupancy rate to 68% from 65% in 2015.

“Robust occupancy rates of Deluxe and First Class hotels indicate the continued influx of high-spending tourists….This should sustain hotel occupancy of between 65% and 70% across Metro Cebu in 2017,” the consultancy said.

On long-term prospects of growth, Colliers said tourism will be hinged on the swift resolution of safety issues by the government.

Business World Online | April 26, 2017
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