Hotels cry low occupancy; Labella blames costly rates

CEBU, Philippines — Hotels in Cebu City normally enjoy full or almost full occupancy rates in the run-up to the Sinulog Grand Parade every third Sunday of January but that is not seemingly the case this year.

From the usual 90 to 100 percent occupancy, the industry is averaging 60 percent booking rate this season, one of the lowest in recent years, according to Carlo Suarez, president of Hotel, Resort, and Restaurant Association of Cebu (HRRAC).

The group has attributed the dismal booking to the emergence of alternative accommodation services but Mayor Edgardo Labella believes that hotels may have themselves partly to blame.

Labella said that one of the reasons why there is decreased occupancy rate in hotels despite it being less than two weeks away from Sinulog is the supposed sudden increase in hotel rates.

“You know, there are already many condos and Airbnb (air-bed and breakfast) competing with the hotels,” said Labella, adding that some people opt to stay with their relatives instead of getting hotel accommodations due to expensive rates.

“That’s why I am really advising hotel owners not to take advantage of the influx of people, make sure your rates are reasonable,” the mayor continued.

Labella said that the supposed spikes in hotel rates should be brought up to the Department of Tourism (DOT) and Department of Trade and Industry (DTI).

“To see to it that there is a regulatory approach on the sudden increase of the price rates, I will issue a letter,” he said.

For his part, Suarez described the current situation as among the “lowest in recent years” as he blamed the emergence of varied competitions in the accommodation sector, like the room-sharing platform AirBnB, among others.

Worse, he added that such room-sharing business concept does not even pay taxes to the government, among others.

On the alleged jacking of prices, Suarez said Labella should not be wary as business is largely dictated by market forces.

Afterall, Suarez said, prices depend on the law on supply and demand.

The HRRAC president also denied allegations that hotels in Cebu are bloating their room rates to take advantage of the Sinulog season, saying they are even having a hard time catching tourists because of the rise of AirBnB units which are offering cheaper alternatives.

“Legitimate hospitality businesses follow the rules, pay taxes, and other duties, while an increasing number of rooms are floated online,” he lamented.

According to DOT, the hotel occupancy during the festival period usually averages at 97 percent, an increase from 67 to 68 percent normally recorded a week before the Sinulog weekend.  JMD (FREEMAN)