After a year of mixed performance, the Philippine tourism sector is entering 2026 with clearer momentum. Improvements in international connectivity, resilient domestic travel, and stronger public–private coordination are creating the conditions for a steadier rebound. Although foreign arrivals in 2025 dipped slightly from last year, ongoing initiatives such as expanded flight routes, streamlined visa systems, and a more diversified tourist base are helping shape a more positive outlook for the year ahead.

A Gradual Improvement in Foreign Arrivals by Late 2026

Foreign visitor arrivals from January to November 2025 recorded a modest decline compared to the same period in 2024, one of the few years outside the pandemic with negative growth. The broader trend, however, remains encouraging. Enhanced visa processing for Chinese travelers and the introduction of new long-haul and regional routes are expected to lift inbound travel beginning mid-2026. These measures should become more visible by the third quarter, once airlines and core tourism markets fully adapt.

Domestic Travel Continues to Anchor the Sector

Domestic tourism remained a stabilizing force throughout 2025. Business travel, MICE activity, and increased household spending supported steady hotel performance. Average occupancy for 2025 is projected at 60.17 percent, slightly higher than 2024’s 59.62 percent, which reflects consistent room demand despite softer foreign arrivals. Rising disposable incomes and greater regional mobility are expected to reinforce domestic travel’s role in 2026.

Hotel Development Expands in Key Urban and Resort Markets

The country is preparing to add 12,249 hotel keys across 50 projects in 2026, signaling continued confidence in tourism’s long-term potential. Metro Manila will lead the additions, although substantial growth is also underway in Cebu, Palawan, Baguio, Boracay, and Davao. Developers are gravitating toward upper midscale hotels, a segment favored for its competitive development costs and quicker payback periods. Local brands are also expanding to meet evolving traveler preferences and demand for more varied accommodation styles.

Promotional Efforts Strengthened by Larger Marketing Budget

The Department of Tourism’s restored ₱1 billion promotional budget for 2026 marks a meaningful step toward strengthening the country’s international visibility. This enhanced budget will support broader global marketing initiatives and can be further amplified through private-sector collaboration. While the amount remains lower than what competing destinations allocate, it is expected to generate more impact toward the end of 2026 and into 2027.

What to Expect in 2026

Despite the modest dip in foreign arrivals this year, several indicators point to a more promising 2026. Strong domestic travel, ongoing hotel development, improving flight connectivity, and enhanced promotional work all contribute to a more supportive operating environment. Over the long term, infrastructure upgrades and policy reforms are expected to expand opportunities across hospitality and leisure.

“We expect inbound foreign arrivals to grow steadily in 2026. The rollout of e-visas for Chinese travelers, expanding flight routes, and a more diversified tourist mix are all supporting recovery. A softer peso is also making the Philippines more competitive, and with private investors now taking a larger role in airport operations, connectivity is set to improve. Growth will be modest, but the trajectory is unmistakably upward.” — Alfred Lay, Director for Hotels, Tourism, and Leisure at Leechiu Property Consultants

The tourism landscape is evolving, and understanding these shifts will be essential for investors, operators, and industry stakeholders planning for the coming year. For deeper insights and access to the full Q4 2025 Philippine Property Market Report, visit leechiu.com/market-insights.