# Investing in a Resort in the Philippines: Why Tourism Demand Should Be Assessed Before Buying Land
*Hospitality & Investment Advisory | OPKO Finance*
Hospitality investment in the Philippines often begins with a search for land: beachfront locations, attractive views, available space or competitive acquisition prices.
However, **the first question should be commercial rather than real estate-related: is there sufficient tourism demand to support the proposed development?**
An attractive property does not necessarily represent a financially viable investment. Conversely, a less spectacular location with established tourism demand may offer stronger economic potential.
### 1. Assessing destination attractiveness
Before defining a hospitality concept, investors should understand why travelers would choose the destination.
What attractions are nearby? Which customer segments could be interested? What activities justify traveling to the area? Most importantly, **does the destination support multiple overnight stays, or does it primarily attract day visitors?**
This distinction directly affects potential occupancy, average length of stay and revenue generation.
A destination suitable for excursions is not necessarily suitable for a resort development.
### 2. Case study: Assessing two development sites in Bohol
In August 2026, OPKO Finance undertook a field-based commercial assessment in connection with two client-owned properties in Bohol, located in San Miguel and Guindulman, near Anda.
For San Miguel, the analysis focused on the drivers of tourism demand, including surrounding attractions, accessibility, traveler profiles and the destination’s ability to generate multi-night stays.
Discussions with travel industry professionals helped challenge initial assumptions about visitor interest, travel itineraries and accommodation demand.
The assessment also included visits to resorts and private villa developments in Panglao and Loboc, where different hospitality concepts and operating models were examined.
Conversations with operators provided practical insights into occupancy, seasonality, customer profiles and booking channels.
The objective was not to replicate an existing resort concept, but to evaluate which types of accommodation could realistically respond to demand in each location.
### 3. Benchmarking competitors and commercial performance
Hospitality market research should examine several key indicators:
* **Average Daily Rate (ADR):** The average room revenue achieved per room night sold.
* **Occupancy rate:** The proportion of available accommodation actually occupied.
* **Seasonality:** Changes in demand across months, holidays and visitor markets.
* **Customer segments:** Visitor origin, spending capacity, preferences and average length of stay.
* **Distribution channels:** Direct reservations, travel agents, Booking, Agoda, Airbnb and other intermediaries.
* **Competitive positioning:** Accommodation quality, facilities, location, services and guest experience.
Field visits and discussions with operators are valuable for testing financial assumptions against operating realities.
### 4. Using booking platforms as supplementary market indicators
Booking, Agoda and Airbnb can provide useful information when benchmarking competing properties.
By comparing prices and availability across selected future travel periods, and repeating the analysis over time, investors can identify potential demand patterns, pricing differences and seasonal variations.
However, these observations require careful interpretation.
**A room shown as unavailable online is not necessarily booked.** Properties may restrict inventory, block rooms or delay releasing future dates.
Platform availability therefore cannot be treated as a direct measure of actual occupancy.
It should be combined with operator interviews, available tourism statistics and structured competitive research.
### 5. Defining the hospitality concept around market demand
Once demand has been assessed, investors can evaluate different accommodation concepts, including private pool villas, family units, couples-oriented accommodation or small resorts with shared facilities.
The appropriate product depends on target customers, achievable pricing, expected length of stay and realistic occupancy assumptions.
Architecture and facilities consequently become commercial and financial decisions.
Additional amenities may improve guest experience, support ADR or strengthen market positioning. However, they also increase development costs and may create additional operating expenses.
Each proposed investment should therefore be assessed against its expected economic contribution.
### 6. Financial feasibility before land acquisition
Commercial validation should be followed by financial feasibility analysis covering:
* Land acquisition costs and related expenses.
* Infrastructure, utilities, access and site development.
* Construction, equipment, furniture and fit-out.
* Pre-opening expenses and working capital requirements.
* Revenue projections under different ADR and occupancy scenarios.
* Operating expenses, maintenance and replacement capital expenditure.
* Cash flow, financing requirements, investment returns and key risks.
Sensitivity analysis should test alternative pricing, occupancy and development-scale assumptions.
A project that is financially viable only under optimistic conditions carries a different risk profile from one that can generate sustainable cash flow under more conservative assumptions.
### 7. Land selection should follow the investment strategy
Commercial and financial analysis helps determine whether a proposed property is suitable for the intended concept, market positioning and capital investment.
Lower land acquisition costs do not automatically translate into stronger returns.
Similarly, a more expensive site may offer better investment economics when supported by stronger demand, achievable revenue and an appropriate development cost structure.
Land ownership, zoning, regulatory, environmental and investment-structuring considerations must also be examined, particularly given the restrictions applicable to foreign ownership of land in the Philippines.
### Conclusion
**The land should serve the business model. The business model should not be designed to justify land already purchased.**
Before committing to a resort development in the Philippines, investors should first establish the commercial fundamentals: destination demand, competitive positioning, realistic occupancy, achievable ADR and the accommodation concept most likely to meet market expectations.
Financial feasibility should then determine whether the investment can generate an appropriate return relative to its capital requirements and risks.
This approach supports investment decisions based on market evidence and financial analysis rather than land attractiveness alone.
**OPKO Finance** supports entrepreneurs and investors with commercial assessment, financial feasibility analysis and investment structuring for projects in the Philippines.
For hospitality investment and development inquiries: please contact our team to info@opkofinance.com
