Room surge a competitive boon

Myanmar’s hotel space has gone from being under-supplied to the other extreme, driving room rates down to more competitive levels.

Sedona Yangon’s Inya wing lobby

Myanmar is shaking off its reputation as a destination with high-priced hotels as accommodation options increase and room rates fall.

After Myanmar opened up, the country witnessed a sudden boom in tourists between 2011 and 2013, but the hotels were in short supply, according to Su Su Tin, managing director of Sanctum Inle Resort and Yangon Excelsior Hotel, which will open in July.

Sedona Yangon’s Inya wing lobby

She added: “Hotel prices went up and this affected tourism a lot.”

However, recent years have seen developers flock to fill the gap, with a series of local and international hotels opening their doors in the country.

Figures from the Ministry of Hotels and Tourism show there are 1,648 licensed hotels and guesthouses, offering a total of 66,065 rooms. Most are concentrated in the tourist hubs of Yangon, Bagan, Mandalay and Inle Lake. In Yangon, the number of hotels increased from 370 in 2017 to today’s 397.

Chu Chee Seng, general manager, Keppel Land Hospitality Management, which manages Sedona Yangon, said: “Unlike in the past, when Yangon’s upper-scale room stock remained unchanged for more than a decade, the market is now seeing many new developments. About 16 upper-scale hotel projects are estimated to be completed within the next three years, translating to about 3,300 new rooms.”

He added that Colliers International expects the completion of just over 1,300 new units to cater to the rising needs of tourists.

However, Greg Allan, vice-president, operations (ASEAN) at Pan Pacific Hotels Group, predicts many projects under construction may delay operations due to various challenges, such as a shortage of skilled labour.

The sudden rise in accommodation, coupled with slowing arrival rates as the European and American markets become hesitant over the Rohingya situation in Rakhine State, has led to a drop in room rates, bringing them in line with other South-east Asian countries.

Edwin Briels, managing director of Khiri Travel Myanmar, said: “There was a lot of investment in hotels from budget guesthouses to five-star hotels. Now, there is a lot of availability, but we still see tour operators worrying about this. (Rooms are) plenty, and prices are very fair.”

Bertie Lawson, managing director of Sampan Travel, said the industry is still battling against its reputation for being costly.

He said: “Prices have gone down, but I don’t think the word has gotten out yet. The Lonely Planet and Rough Guide books published last year are still talking about Myanmar as pretty expensive, but that’s not the case.”

Despite this, Keppel’s Chu remains optimistic. In 2023, phase two of Yangon’s Junction City development will house the country’s first Sedona Suites, comprising 260 serviced apartments.

He said: “We believe that Myanmar’s hotel landscape will continue to evolve, catering to more diverse markets. There is growing potential for the mid-tier hotel segment in Yangon, which include bed and breakfasts, as well as boutique hotels.”

Correction: An earlier version of the story stated that Keppel Land Hospitality Management owns Sedona Hotel Yangon. The hotel is actually owned by Keppel Land, the parent company of Keppel Land Hospitality Management. The story has been corrected. 

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