6 Feb, 2014
FREE Download: Horwath Report Sees Myanmar Hotel Sector As “Most Profitable”
Bangkok, 05 February 2014 – Myanmar is likely to grow faster than other emerging market within Asia, and the hospitality sector is likely to be one of the most profitable sectors, according to the Hotel Yearbook 2014: Asia-Pacific, released by the hotel consultancy group Horwath HTL.
James Chappell, Global Business Director at Horwath HTL, said: “Asia is such an exciting market for hotel development. Working with the Hotel Yearbook again in 2014, we have been able to report on many more markets than we ever have before, including one of the most fascinating, Myanmar. It’s fascinating to see how it will develop over the coming years.”
The Hotel Yearbook, now in its eighth edition, focuses on the future of the hotel industry and upcoming trends and innovations that will have an impact on its development. The other 11 Asia-Pacific countries are: China, India, Indonesia, Japan, Malaysia, New Zealand, Singapore, Thailand, Vietnam and South Korea.
Each country report gives a brief snapshot of the hotel business landscape in 2013, followed by an insider’s perspective on the outlook for 2014 and beyond. Included are:
• Key developments anticipated;
• Changes in the regulatory environment;
• Expected moves by the market’s most important players, etc.
The report says that Yangon has witnessed a surge in tourist arrivals, receiving 554,531 foreign visitors in 2012, an increase of 54.3% over 2011. Thailand and China are the two largest source markets for Yangon’s arrivals.
Yangon saw a significant increase in air connectivity since 2011, and is now linked by 22 international airlines. The city is home to 204 hotels, with approximately 9,000 rooms, as of 2012. It is estimated that approximately 2,000 of these rooms are of international standard. The Strand by GHM, The Governor’s Residence by Orient Express, Traders, PARKROYAL, Sedona and Chatrium are the only chain/ branded hotels currently operating in Yangon.
Says the report, “Ever since Myanmar embarked on its journey towards democracy in 2011, room rates have soared in Yangon. The branded hotels in Yangon experienced average room rates doubling from US$ 60 in 2011 to US$ 120 in 2012, and achieving approximately US$ 180 as of YTD September 2013. Occupancy also increased, from 60% in 2011 to 65% in 2012, and increased further to 71% as at YTD September 2013.”
It says that Yangon’s tourist arrivals are likely to increase dramatically over the next five years, given the redevelopment plans for the Yangon and the Hanthawaddy International airports. When completed in 2016, these airports collectively will have an annual passenger handling capacity of 10 million passengers. Passenger arrivals from the ASEAN countries are also likely to increase after 2015, once the ASEAN open sky policies are initiated in Myanmar.
“Given the increasing occupancy rates and severe shortage of rooms in Yangon, many international hotel companies, including Peninsula, Hilton, Pan Pacific and Accor, have announced upcoming hotels in the city. Historic state-owned buildings in Yangon have been tendered to be converted into hotels, to assist with increasing room inventory in Yangon.
“As Foreign Direct Investment into Myanmar is allowed at 100% ownership, many international companies are looking into developing hotels. Top investment in the hospitality sector is seen from Singaporean, Thai, and Japanese companies.
“Yangon will also see alternative tourism concepts in the future which include a floating hotel with approximately 300 keys to be developed by a Singapore-based fund, a 414 room mixed-use development of hotels and commercial space by a Vietnamese company, and an additional luxury cruise liner to be operated along the Irrawaddy river by Orient Express.
It adds, “However, as Myanmar is an emerging market, significant issues like severe shortage of hotel rooms, accessibility to skilled labor and lack of domestic infrastructure are a concern for most operators. Foreign investors are also cautious to invest in Yangon given the ambiguity of the country’s financial and legal systems.”
The report concludes: “Despite all these challenges, it is believed that Myanmar is likely to grow faster than other emerging market within Asia, and the hospitality sector is likely to be one of the most profitable sectors.”
Click here to download the executive summary of the report FREE.
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