Imbalance in supply and demand create challenges for the hotel industry in Myanmar, writes Michael Taylor.
More than one million travellers visited Myanmar in 2017, setting a new record. With only 27,000 hotel rooms in the entire country, however, there was a severe shortage of rooms, allowing hoteliers to raise rates to levels that some industry insiders believe were counterproductive.
“Hotels are really greedy. They charge US$150 a night for a room that’s worth only US$40,” a spokesman for a travel company told the Myanmar Times, adding that travellers were increasingly complaining about “poor facilities”.
If Myanmar as a whole is suffering from a dearth of hotel rooms, Yangon – the nation’s commercial hub and former capital – is plagued by a surplus.
“There is definitely an oversupply,” says Wee Wei Ling, executive director of the Singapore-based Pan Pacific Hotel Group. “In fact, tourism has been declining recently. But we are long-term investors in Myanmar. We see the potential of this country, and we would like to grow with it.”
Also known as Burma, Myanmar was ruled by an oppressive military junta from 1962 to 2011. During that period, multinational hotel chains gave the country a wide berth.
Following a gradual process of liberalisation that was launched in 2010, sanctions were eased and interest in investing in the country grew.
First mover advantage
The French-based hotel group, AccorHotels, was the first multinational to re-enter Myanmar in 2013, when it opened three hotels.
“We now have a network of eight hotels there including the recently opened Sofitel Inle Lake and debut of the first Mercure in Myanmar with the launch of the Mercure Yangon Kaba Aye,” says Patrick Basset, Chief Operating Officer – Upper South East & North East Asia and the Maldives.
“Southeast Asia has long been a strategic market for AccorHotels, and as Myanmar develops as a destination for tourists, business and corporate visitors, we expect to see a significant growth in the years to come. We have seven hotels in our pipeline in Myanmar including Pullman Mandalay Mingalar, Grand Mercure Yangon Golden Empire and ibis Styles Mandalay Centre, targeted to open by 2019.”
The Sofitel Inle Lake Myat Min opened in March this year. Located along the shores Inle Lake, it is the first Sofitel property in Myanmar.
“Our guests will be instantly impressed by the Shan local way of life, and at every turn, they will experience the richness of their surroundings, from the vibrant hues of an orange sunset to the pink reflections on the water at dusk and the fragrant scent of the verdant vegetation,” says David G. Daguise, general manager of Sofitel Inle Lake Myan Min.
AccorHotels also took over management of the Micasa Hotel Apartments Yangon in Q3 of 2017, rebranding the property as the Mercure Yangon Kaba Aye, the group’s first Mercure property in Yangon.
“We are extremely proud to be the first Mercure Hotel in Myanmar,” says Richard Tin Tun, general manager of Mercure Yangon Kaba Aye.” Under a globally recognised brand, the hotel offers guests that are travelling to the city a local and authentic hospitality experience synonymous to the brand’s purpose and ambition.”
Other international hotel groups are following Accor’s lead.
Hotels G is the lifestyle brand of GCP Hospitality, a Thai-based group that manages more than 26 hotels and serviced apartments around the world. Included in its portfolio is The Strand, which author John Murray famously described as “the finest hostelry East of Suez”.
The hotel was lovingly restored in 1989 and refurbished again in 2016. It is now one of the jewels in GCP’s crown.
Opened in September 2017, Hotel G Yangon is the group’s newest entry in Myanmar. The 85-room property is located in the heart of Yangon’s blossoming entertainment district.
“Hotel G Yangon is the first design hotel in Myanmar to be managed by an international company, therefore reaping the benefits of GCP Hospitality’s experienced design and management team, as well as bringing beneficial guest recognition programmes and offers to our guests,” says Serge Rigodin, general manager, Hotel G Yangon.
“At the moment, the majority of our clients are coming from neighbouring Asian countries. We are already seeing a good volume of repeat guests coming to Yangon on business, as well as leisure travellers from nearby Asian countries and the West.”
Starwood Hotels & Resorts and Marriott International are also entering the fray. Starwood is scheduled to open its first hotel in Myanmar on 12 August 2019, the Sheraton Yangon Hotel, and Marriott will manage a hotel currently under construction. Scheduled to open in 2019, the Courtyard by Marriott Yangon, Myanmar, will be part of a mixed-use development.
“Myanmar holds immense potential as a new tourism destination in South East Asia given its rich history and natural beauty,” says Karl Hudson, Area Vice President, Thailand, Vietnam, Cambodia & Myanmar, Marriott International. “Demand is expected to grow as the government and economy are stabilising, with business travel picking up due to increased investment in various business sectors, and the leisure segment looking promising as Myanmar relaxes its visa policies and continues to market its unique destinations.”