Hospitality turns to domestic MICE as foreign travel slows

THE HOSPITALITY sector is increasingly relying on domestic meetings, incentives, conventions, and exhibitions (MICE) demand as geopolitical tensions and the global energy crisis continue to weigh on international travel, according to an analyst.

Quirino Teo, executive director for investment services at Savills Philippines, said international MICE demand, particularly large-scale global conferences, incentive travel groups from North Asia, and multinational product launches, remains under pressure.

“What’s compensating, and this is the more interesting story, is domestic MICE,” he said in a Viber message on Friday.

He identified Philippine corporations, government agencies, and the information technology and business process management (IT-BPM) sector as the main drivers of domestic MICE demand, with the IT-BPM industry accounting for about 58% of MICE space utilization for town halls, offsite leadership meetings, client events, and compliance training.

The healthcare and financial technology sectors are also emerging as steady sources of demand, he added.

Visitor arrivals reached 6.48 million in 2025, according to Bureau of Immigration data, while the Department of Tourism (DoT) is targeting 6.7 million arrivals this year.

Arrivals in the 11 months to November 2025 fell 2.16% year on year to 5.24 million, weighed by weaker inflows from South Korea and China. This compares with significantly higher volumes in neighboring markets such as Malaysia (38.2 million), Thailand (32.9 million), and Vietnam (21.1 million).

On the supply side, hotels in Makati’s central business district and the Bay Area continue to lead the market, with around 21,000 hotel room keys in operation, based on Savills data.

The firm also noted that hotels in Bonifacio Global City (BGC), Taguig, are posting the highest occupancy rates.

Asked about corporate preferences for township-integrated hotels versus standalone MICE-oriented properties, Mr. Teo said integrated developments have a competitive advantage.

“A hotel inside a township with a credible convention center benefits from base-load MICE bookings that fill shoulder periods when leisure and transient corporate demand softens,” he said.

He added that the combination of Grade A office stock, retail components, and convention infrastructure creates a self-reinforcing demand ecosystem that standalone hotels are unable to replicate.

However, Mr. Teo cautioned that the influx of new hotel developments in provincial markets could create supply-side risks, particularly in areas where supporting infrastructure remains underdeveloped.

“That’s a classic supply moving ahead of demand scenario, and it carries real risk,” he said.

Metro Manila remains the country’s primary hub for large-format MICE events because of the significant infrastructure gap between the capital and regional markets, he added.

Mr. Teo cited the Bay Area convention cluster, which includes the SMX Convention Center, World Trade Center Metro Manila, and the Philippine International Convention Center (PICC), as having decades of accumulated capacity and supplier ecosystems that other regions cannot quickly replicate.

The PICC reopened in September 2025 after undergoing a six-month renovation.

Asked whether the Visayas and Mindanao regions are emerging as alternative MICE hubs to Metro Manila, Mr. Teo said Cebu remains the exception, while most other regional markets are still in the “MICE-aspirational phase rather than MICE-ready.”

“Cebu is a genuine and growing exception. It has the hotel stock and a convention center that can credibly host regional association conferences and incentive groups,” he said.

“Developers are taking note, and the MICE pipeline there is more demand-anchored than in most other regional markets.”

“For the rest of Visayas and Mindanao, the honest assessment is that most markets are still in the MICE-aspirational phase rather than MICE-ready,” he added.

“What we are watching closely is whether infrastructure investments, particularly in road and port connectivity across the Visayas and Mindanao, accelerate fast enough to justify the hotel pipelines being announced.” — Juliana Chloe A. Gonzales