Myanmar Hotel Industry Faces Opportunities and Challenges

Myanmar faces an oversupply of rooms as supply outpaces demand. What other challenges does the Southeast Asian country’s hotel industry face – and what are the opportunities? Two hotel group leaders voice their views in an exclusive round-table discussion.

image-of-sofitel-inle-lake-myat-min-hotel-myanmar
Softel Inle Lake Myat Min, a newly opened hotel in Myanmar. Photo Credit: AccorHotels.

Round Table Discussion

Myanmar’s tourism industry got off to a very good start in 2018 with a 22% increase in tourism arrivals compared to the same period in 2017.

This followed a very disappointing performance the year before, when the country’s tourism industry suffered a nearly 38% drop in the arrival of foreign tourists.

More than 600,000 international visitors had arrived in Myanmar by the end of February 2018, the Ministry of Hotels and Tourism reports.

Thailand supplied the most inbound tourists, with 273,889 Thai travelers visiting Myanmar, followed by China, with 101,484 visitors.

Next in line were Japan, with 101,484; the United States, with 73,085; South Korea, with 65,929; Singapore, with 61,859; Vietnam, with 58,919; France, with 58,369; and the United Kingdom, with 47,717.

Malaysia, with 47,010 tourism arrivals, rounded out the top 10.

Surplus of Hotel Rooms

Still the tourism industry in Myanmar faces problems, not the least of which is a surplus of hotel rooms in Yangon, the country’s commercial hub and former capital.

The problem has been exacerbated by the opening of several new hotels in the city over the past year. Recent new hotel openings include …

  • Pan Pacific Yangon
  • Lotte Hotel
  • Kempinski Yangon
  • Pullman Yangon Centrepoint

“There is definitely an oversupply,” says Wee Wei Ling, Executive Director of 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. That is why we are here.”

AccorHotels has opened its first Mercure property in Yangon, the Mercure Yangon Kaba Aye, which has 183 rooms and suites.

“The opening of the first Mercure Yangon Kaba Aye capitalizes on the travel aspirations of Myanmar’s growing domestic and international tourism,” says Patrick Basset, Chief Operating Officer of AccorHotels, Upper Southeast and Northeast Asia.

“Dubbed as ‘The Garden City of the East,’ the city is a melting pot of cultural diversities and communities.”

More new hotels are on the way. The Courtyard by Marriott Yangon, Myanmar, for example, will be part of a mixed-use development in Yangon. It is scheduled to open in 2019.

“We are excited to be working alongside Marriott International, a global hotel operator with such vast experience in the hospitality sector,” says Kyaw Naing Oo, Chairman, Hotel Sule Square Co., Ltd.

“As Myanmar opens up to great opportunities, we are excited to be offering travelers an international hotel brand that further puts this country on the tourism map.”

New hotels are opening in other parts of Myanmar, as well. The Sofitel Inle Lake Myat  Min, for example, opened on 5 March 2018.

“We are excited and proud to introduce the first Sofitel in Myanmar with the opening of Sofitel Inle Lake Myat Min,” Patrick says.

“As AccorHotel’s sixth hotel in Myanmar, Sofitel Inle Lake Myat Min is setting a new benchmark, extending the luxury trend across Myanmar and reflecting the continued expansion of business and tourism in the region.”

Myanmar 101

A quick guide to Myanmar follows …

Geography

Myanmar has a population of 54 million people. With a population of 5.21 million people, Yangon, formerly known as Rangoon, is its largest city and former capital. The landscape is dotted with British colonial architecture, Buddhist temples, and modern high-rises.

The nation’s capital is Naypyidaw, a planned city, which was launched in 2005. It has a population of more than 9 million people.

The Republic of the Union of Myanmar, a.k.a. Burma, is located in Southeast Asia.

The country is bordered to the west by Bangladesh and India, to the east by Laos and Thailand, and to the north and northeast by China.

Myanmar has a 1,930 kilometre (1,200 mile) coastline facing the Bay of Bengal and the Andaman Sea.

Tourism

Myanmar was under oppressive military rule between 1962 and 2011. During that period, the country’s tourism industry all but dried up.

The government started encouraging tourism in 1992, but to little effect. According to the Myanmar Tourism Marketing, fewer than 270,000 tourists entered the country in 2006.

Following democratic reforms in 2011, there was optimism that Myanmar’s tourism industry was about to turn the corner.

Multinational hotel groups – who had long given the country a wide berth – started showing renewed interest in investing in the place.

In 2011, the year that reforms were instituted, Myanmar saw a modest 3.14% increase in tourism arrivals. The size of the increase was in keeping with the previous few years.

In 2012, however, there was a significant jump of 29.72% in tourism arrivals over the previous year, followed by an explosive 93% in 2013, 50.73% in 2014, and 51.91% in 2015.

In 2016, however, there was steep drop of 37.89% in tourist arrivals.

Happily, the decline was short lived. There was a increase of 18% in 2017, when 3,443,133 foreign tourists visited the country.

Accommodation

Visitors to Myanmar can stay at everything from hotels to hostels, guesthouses, beach bungalows, and home stays.

Some trekking tours include camping, which is actually illegal. Another option is staying at Buddhist monasteries, where you can sleep for free.

Transport

Myanmar has 69 airports, but only 11 of them have runways of more than 3,250 metres.

The country has two main international airports: Yangon International Airport and Mandalay International Airport.

Within cities you can travel by bus, motorcycle taxi, trishaw, horse cart, ox cart, tuk-tuk – the list goes on.

Between cities you can travel by bus, railway, or boat.

Climate

Myanmar has a tropical climate. The coastal regions average more than 5,000 millimeters (196 inches) of rainfall per year.

The amount of rainfall in the Delta region is approximately half that. The average rainfall in the central Myanmar is less than 1,000 millimeters (39 inches).

The temperature in the North averages 21 degrees Celsius (70 degrees Fahrenheit). Coastal and delta regions have an average maximum temperature of 32 degrees Celsius (90 degrees Fahrenheit).

Visas

Travelers from Australia, Canada, Hong Kong, India, the Philippines, the United Kingdom, the United States, and dozens of other countries can apply for visas on line.

Visas are for single entry and valid for 90 days from the date of issue.

Passports must be valid for at least 60 days from date of entry.

Visa applications take up to three days to process.

Round Table Discussion

I interviewed top executives at a major international hotel group and the general manager of a hotel in Yangon about the opportunities and challenges facing the travel and tourism industries in Myanmar, paying particular attention to the hospitality sector.

Hotel G Yangon

image-of-hotel-g-yangon-facade
Facade of Hotel G Yangon in Yangon, Myanmar. Photo Credit: GCP Hospitality.
image-of-babett-pano-restaurant-yangon-g-hotel-myanmar
Comfortable seating at Babett Eatery and Bar. Photo Credit: GCP Hospitality.
image-of-hotel-g-yangon-bar-myanmar
The bar at Babett Eatery and Bar. Photo Credit: GCP Hospitality.

Serge Rigodin – General Manager, Hotel G Yangon. Serge spoke with the Accidental Travel Writer about the hotel and the challenges and opportunities facing the travel and tourism industries in Myanmar.

Excerpts from the interview follow:

Can I have a BRIEF description of your hotel?

Hotel G Yangon is Myanmar’s latest lifestyle hotel.  Opened in September 2017, the 85-room property is located at the heart of Yangon’s vibrant entertainment neighbourhood, with art galleries, shopping malls, the famous Bogyoke market and the central railway station right on its doorstep.

Does your hotel have any “unique selling propositions”?

Hotel G Yangon has all the intuitive technologies, super-fast connectivity, and understated style that savvy modern travelers crave, alongside creatively designed social spaces, a fully equipped Real Fitness ExpressTM gym with yoga studio, and Babett Eatery and Bar, a trendy chic bar and kitchen to relax, refuel, and reconnect.

I spent a night at another GCP Hospitality property, Hotel G Singapore, several months ago. I was struck by the hotel’s trendy interior design. The hotel also had an undeniable buzz.

GCP Hospitality has gained a reputation for strong interior design as well as great culinary offerings in the region through restaurants like Ginett Singapore and Scarlett Hong Kong and Bangkok.

One of our aims for Hotel G Yangon was to establish ourselves on the culinary, design, and social scene of this vibrant and re-energised city, creating a communal hub at the heart of the hotel that would attract local diners as well as international travelers seeking a laid back style, soulful vibe and urban chic design.

Can you say something about the hotel’s public spaces – the lobby and the food and beverage outlets?

At the heart of the hotel is an open plan lobby and Babett Eatery & Bar, a trendy area where guests and local residents can relax, refuel, and reconnect.

Babett is open throughout the day, offering breakfast on the go and leisurely brunches, pizzas from a wood-fired oven, meats from charcoal grill, sharing platters of cold cuts and cheese, and daily specials from executive chef, Christophe Buzare.

As the day comes to a close, bartenders serve cocktails and wines by the glass and bottle from an extensive list.

We have also curated a regular roster of some of Myanmar and Asia’s up-and-coming DJs and hottest musical talents to provide a laid-back soundtrack into the night.

How did your hotel fare last year and how are things sizing up so far this year?

Hotel G Yangon opened in September 2017 and so was only fully operational for the final quarter of the year.

As we enter our first full year of operations, business is ramping up to where we expected it to be. The guest feedback and ratings we have received has been overwhelmingly positive.

We are particularly pleased with the performance of Babett Eatery & Bar, which has rapidly become a hot social and culinary venue on the city’s entertainment scene.

How is Yangon evolving?

Yangon is really undergoing a transformation. It has the feel of a revitalized and vibrant city and has become a hot long weekend city break destination for Myanmar nationals and also for people from other Southeast Asia countries.

I see new contemporary art galleries, craft collective shops, and independent restaurants popping up every week, merging really well into the cultural landscape of ancient pagodas and colonial buildings.

How does Hotel G Yangon fit into all this?

We are a contemporary lifestyle hotel, yet we wanted Hotel G Yangon to respect and reflect the heritage of its neighbourhood.

For example, we sit next door to the historic Thamada Cinema, which first opened in 1958 and is a national treasure that continues to draw crowds for its mix of local and Hollywood movies.

The walls of Babett Eatery & Bar are decorated with prints of posters from Burmese films that were once shown at the Thamada.

  • Serge Rigodin – General Manager, Hotel G Yangon, is the newly appointed Cluster General Manager, who will also lead the nearby Inya Lake Hotel. An energetic general manager with a wealth of experience of operating hotels in some of Southeast Asia’s most exciting and up-and-coming cities. A native of Grenoble, France, Serge  has managed a number of other GCP Hospitality properties, most recently the 308-room Hotel G Singapore, home to the acclaimed Ginett Restaurant & Wine Bar.  He has also worked in  Beijing., China; Pattaya, Thailand; Siem Reap, Cambodia; Seoul, Korea; London, England; and Saigon and Hanoi, Vietnam

AccorHotels

image-ofsofitel-inle-lake-myat-min-hotel-swimming-pool-myanmar
By the swimming pool at the Sofitel Inle Lake Myat Min. Photo Credit: AccorHotels.
image-of-sofitel-inle-lake-myat-min-hotel-lobby
Interior of the Sofitel Inle Lake Myat Min hotel in Myanmar. Photo Credit: AccorHotels.
image-of sofitel-inle-lake-myat-min-hotel-restaurant
Food and beverage outlet at the Softel Inle Lake Myat Min. Photo Credit: AccorHotels.

Patrick Basset – Chief Operating Officer – Upper South East & North East Asia and the Maldives, AccorHotels. Patrick spoke with the Accidental Travel Writer about the opportunities and challenges facing the Myanmar travel and tourism industry with particular attention to the hospitality sector.

Excerpts from the interview follow:

I understand that Accor now has eight hotels in Myanmar. When did the group enter the country and how many properties does it currently have?

We were the first major hotel group to re-enter Myanmar several years ago in 2013, with the opening of three hotels: MGallery The Lake Garden Nay Pyi Taw, Novotel Inle Lake Myat Min, and Novotel Yangon Max

Following a disappointing year in 2017, things appear to have picked up this year. Is that correct? Any comments on the “state of the industry”?

Developers are always keen to open properties in new destinations, but first we have to show there is growing demand because at the end of the day, it is always about having a return on investment.

What were some of the challenges Accor faced as the first major hotel chain to re-enter the market in Myanmar?

We were the first major worldwide international hotel chain to re-enter Myanmar, and initially there was some caution. Thus, we have ensured to monitor the industry trends closely, taking into consideration the infrastructure and support from the local government, which is instrumental in growing tourism in a new destination.

There is always a higher risk but also possibly greater rewards, as well, in expanding in a nascent tourism destination.

How did your hotel fare last year and how are things sizing up so far this year?

In Q4 2017, the citywide occupancy for Yangon was lower in comparison to Q3 2017. Further declines in occupancy and higher competitiveness in the average daily rate may be expected in 2018, due to a significant rise in supply.

Roughly what percentage of your guests are domestic/foreign? What are your most important foreign markets?

The main percentage of our guest are foreigners. Thailand remains one of the top countries of origin for travelers in Myanmar; and other countries in Asia including China, Japan, South Korea, and Singapore are also top contributors to the number of arrivals in the country.

Are there any particular challenges or opportunities facing the industry?

Globally, while the “sharing economy”, i.e. AirBnB, has had an impact on leisure travel, at AccorHotels and in Myanmar specifically, business travelers and corporations still make up a majority of our business.

We believe in continuing to expand horizons for our guests and will enter new destinations particularly luxury and upscale market.

Nowadays, luxury travelers are always looking for the hottest new destination, but they also want to be where other aspirational travelers go.

We have a strong and loyal customer base which aspires to discover new destinations that have rich cultures and offer eco-tourism, i.e., Vietnam, Cambodia, and of course Myanmar.

Accor has several brands. How would you differentiate them?

Pullman, our upscale hotel brand, is designed to cater to the requirements of cosmopolitan as well as business travelers, while MGallery by Sofitel is a collection of high-end boutique hotels, each with its own unique personality and story that are experienced by guests through the architecture, interior design and services.

Mercure, our midscale brand, is rooted in the local communities in terms of design and services.

Combined, our brand portfolio allows us to offer a variety of products to cater to travelers of different segments.

Can you comment on Myanmar’s potential as a travel and tourism destination?

Myanmar’s economy has grown at an incredible pace over the past few years. As the country continues to develop in areas such as healthcare, education, and financial sector – which are in need of a lot of progress – we believe that with strong support from domestic and foreign investment, Myanmar’s potential as a destination for tourism and business will continue to grow.

Myanmar has faced an influx in investment in the hospitality sector since 2011 resulting in a huge expansion of supply of hotel rooms.

However, the guest arrival number in Myanmar is growing at a slower than expected pace resulting from many factors, including political issues and the infrastructure development of the country.

Are there any parts of the country that are particularly “hot”?

Beyond Yangon, some upcoming travel destinations include Bagan and Mandalay.

We have several upcoming projects in Mandalay, the second largest city and the former royal capital of Myanmar. A city rich in culture and heritage, Mandalay is becoming popular amongst business and leisure travelers.

Do you have any projects in the pipeline?

In our development pipeline, we are looking to bring a combination of economy to upscale brands to Mandalay within the next few years including the opening of MGallery Mandalay Hill Resort, Pullman Mandalay Mingalar, and ibis Styles Mandalay Centre.

Ngapali Beach and Inle Lake, where we currently operate two hotels – Sofitel Inle Lake Myat Min and Novotel Inle Lake Myat Min – are also two charming destinations with pristine nature sights.

  • Patrick Basse is Chief Operating Officer – Upper South East & North East Asia and the Maldives, AccorHotels.

You might also like …

Myanmar Hotel Industry Faces Opportunities and Challenges (a Round Table Discussion) is the latest in an occasional series of Round Table Discussions with industry leaders in the global travel, tourism, and hotel sectors.

 

Advertisements

Leave a Reply