The Tourism Industry of Myanmar

Last update: Nov 2, 2020

The hotel market in Myanmar.

From bust to boom to ... steady growth?

Myanmar used to be an unknown, unloved, forgotten country, located right between two of Asia's major tourist destinations: India and Thailand. In the high season just a few hundred thousand people would bother to travel there, put off by the boycott, the complicated border and travel restrictions and the difficult currency situation. Since 2010 that has changed dramatically: Myanmar has gone from bust to boom in just a few years.

For many years Myanmar had between 200.000 and 250.000 tourists arriving at Yangon airport every year. Until 2013 Yangon airport was the only entry point to Myanmar; but from August 2013 onwards four land border crossings with Thailand have been opened for tourism. From 2011 onwards visitor numbers started to rise dramatically and during high season there was a hotel room shortage. The year 2013 turned out to be the high point in room prices. The hotel situation in Myanmar has since then improved because many new hotels have been built.


Tourist arrivals at the international airports.

The overall picture is that the steep rise in tourist number stopped in 2016. The reason for the dip in visitor's numbers in 2016 and 2017 is due to the hostilities in Rakhine and the Northern Shan region. The graph below shows the number of tourist arrivals at the three international airports (left) and the total number of hotel rooms in Myanmar (right). These tourism statistics exclude land-border tourists.

Myanmar Tourism statistics
Myanmar tourism chart/graph from 2008 until 2020.
Left: tourist arrivals (red line) at the international airports.
Right: total number of hotel rooms in Myanmar (blue line).

Myanmar tourist arrival data.

year airport arrivals rooms
2008 193.000 20400
2009 245.000 21000
2010 319.000 23500
2011 391.000 24000
2012 593.000 28000
2013 904.000 35000
2014 1.130.000 43000
2015 1.288.000 50000
2016 1.208.500 56500
2017 1.304.000 64000
2018 1.344.839 68167
2019 1.792.000 79855

DATA: Ministry of hotels and tourism statistics.
The arrival numbers exclude land border tourists.

 


The new Hotel Zones

To Zone or not to Zone?

The new Hotel Zones which the Myanmar government has planned and developed around Mandalay and Inle lake have not been very succesful. For example, in 2012 the government launched a hotel zone project in the hills around the south-eastern part of Inle lake. This new hotel zone, easily visible from Google Earth by the new roads on the bulldozered hills is more than twenty kilometres from Nyaung Shwe and thus rather isolated. In 2017 there are only two new resorts and its clear that this hotel zone is not a great success. Farmers have protested at being bought out at very low ground prices; and farmland and a hillside have been destroyed; leaving a large open wound which is easily visible from the lake. Any replanting of greenery or trees has not happened.

Similar problems have arisen at the new Tada-U hotel zone near Mandalay. Quote from "Sustainable destination plan for the ancient cities of upper Myanmar, Mandalay, Amarapura, Inwa, Sagaing, Mingun (2016-2021)":

The location for the Hotel Zone of the Mandalay region is a large area in the township of Tada U, near Inwa, around 10 km north of Mandalay’s international airport. The planned complex covers an area of around 22 square km. (almost a quarter of the size of modern-day Mandalay). From the point of view of scale and the enormous sacrifice of farmland and of rural landscape, the project seems exaggerated.

It reminds one of the enormous scale of Naypyidaw, which is also difficult to navigate for tourists. The Tada U hotel zone is 10 km north of Mandalay’s international airport and ... 25km away from central Mandalay town (the railway station and Zaycho market). It might be a suitable industrial area, or a large residential area, but for a tourist it would the worst place to stay in Mandalay. It seems that hotel developers are in some cases better off when they ignore these government zones.

Another serious problem is that farmers get very little compensation when a hotel zone is developed, usually the profits are made higher up. Protesting usually resolves nothing; as farmers are on the bottom of the food chain and can do little against the authorities. Therefore, the hotel zones have drawn a lot of criticism in Myanmar for mismanagement and bad planning.

The new Hotel Zone in Bagan is in an awkward position, 5 km south of New Bagan, and is quite remote from Old Bagan, as well as far from the airport and bus station.

Now that the Myanmar hype is over some of these zones are no longer needed in the foreseeable future. The popular destinations in Myanmar (the Big-Four) have an abundance of hotels and some of the hotels that have been built in remote hotel zones may find it hard to fill their rooms.

 


The hotel situation from 2011 to 2020.

In the last eight years the number of hotel rooms has increased more than threefold in the main destinations (the Big-4), except in Bagan where the authorities are restricting the building of new hotels in the Bagan archaeological zone.

town 2011 2019 PCT
Yangon793423558297%
Mandalay318111153351%
Bagan20084345216%
Nyaung Shwe937 3388362%
Mawlamyine1941129582%
total rooms 1425443573306%

Hotel room numbers from 2011 - 2020
DATA: Ministry of hotels and tourism statistics.

A government campaign to have Bagan included on UNESCO’s list of World Heritage Sites has moved into a sensitive area following a decision by the Ministry of Culture to take action against hotels built illegally within the Bagan temple complex. The Ministry of Culture is trying to reverse the license of (illegally) constructed hotels; in March 2016 the Bagan Heritage Committee revoked the license for 25 hotel buildings under construction. The owners can apply to complete construction as a residential building but they cannot operate as a hotel.

Naypyidaw is an interesting case: after government offices moved to Naypyidaw many hotels started popping up with the expectation that many international delegations would visit. This has caused an enormous oversupply; in 2016 Naypyidaw has 5100 rooms in 63 hotels, but far fewer than 1000 rooms are occupied. More: www.irrawaddy.com (“Taking a look at a hotel industry in Naypyidaw, I feel like the Titanic is sinking.")

 

Timeline of tourism and the hotel market development.

February 2012
Hotel rates in Myanmar start to rise quickly in 2012. The number of tourists arrivals increases from around 800.000 in 2010 and 2011 to more than 1 million in the year 2012. (including border tourists)

February 2013
Hotel rates in Myanmar have more than doubled in 2012, and during 2013 room rates have tripled compared to 2011. For example, the Sedona Hotel in Yangon went from US$50 per night in 2009 to US$280 in 2013.

February 2014
The incredible price rise of hotel rooms seems to have stabilized. In 2013 the number of hotel rooms increased by 44%, from 25000 to 36000. The many new opened hotels have improved the hotel situation; but many travelers complain of overpriced rooms.

February 2015
In Yangon there are many new hotels and hotel occupancy rates have gone down. Hotel room rates in Yangon have started to go down. In contrast to this the hotel room prices in Nyaung Shwe, Inle lake, have been increasing, because it has a very limited number of hotels. Decent budget guesthouses can get booked up during peak season (December and January).

February 2016
The large number of hotels, hostels and guesthouses which have opened last year seems to have resolved the accommodation shortage this winter season (2015 - 2016).

April 2017
The average room rate of 20 hotels and guesthouses in downtown Yangon(*) has dropped by about 30 percent since the apex in 2013. It is mostly the luxury hotels that have cut their room rates significantly. The average room rate of hotels in Mandalay has dropped by about 20 percent.
The average room rate in Nyaung Shwe (Inle Lake) where many modern hotels were built between 2014 and 2016 has dropped by about 30 percent since 2015. The room rates in other towns and villages have fallen much less.

May 2018
The number of tourists from Thailand and China has been increasing in 2017; whereas there have been lower numbers of Western and European tourists. The average room rate in Myanmar is still going down. On Ngapali beach new budget hotels and guesthouses are being opened; but tourism to Ngapali and Mrauk-U is decreasing due to unrest in Northern Rakhine state.

June 2019
The number of tourists from China is still increasing, as the promotion towards attracting Chinese tourists seems successful. The race to the bottom is over; hotel prices have bottomed out, and hotel room rates are now quite reasonable. In fact, some new hotels in the "Big 4" are now discounting so much, that they must be making a loss on their investment.

*] Downtown Yangon is the grid area south of the railway around Sule Pagoda. Hotel room prices are in US-dollars.

 



Hotel market analysis.

Most first-time visitors of Myanmar tour the "Big 4"; Yangon, Mandalay, Inle lake and Bagan. These 4 destinations are where hotel chains and Burmese investors have built many new hotels during the last eight years. In Mandalay, Bagan, and Inle lake many hotels have opened, and the hotel shortage has completely disappeared. Overall, Myanmar has been focusing on luxury, upmarket tourists during the tourism boom, not on backpackers and flashpackers. That trend, of mostly upmarket travellers, has changed since the Rakhine unrest in 2016 - 2017.

Hotel room rates (in US-dollars) have been edging down the last 6 years; the hotel rates in Myanmar have become comparable to those in other Southeast Asian countries like Thailand and Cambodia. Hotels in all price ranges are now plentiful, but hostels are a relatively new phenomenon, and the few that are there are not cheap compared to Cambodia and Thailand. The luxury hotels in Yangon and Mandalay that tripled their room rates in 2013 have lowered their room rates significantly. Room rates for mid-range hotels have been dropping as well, and there are very good online discount deals to be had. In the budget hotel market, there has been relatively less expansion; fewer budget hotels have been built. As mentioned, there are few hostels, and they have a high occupancy rate.

Outside of the "Big 4" the situation is different, and in many places good affordable hotels are difficult to find. For example, very few new hotels have been built in Kengtung, Loikaw, Myawaddy, Taunggyi, and Sittwe; and hotel prices remain rather high there. Due to the unrest in Northern Rakhine state during the first half of 2019, nearly a dozen hotels have closed in Mrauk-U.

Many new hotels opened in Pyin-U-Lwin, but there was no significant decrease in room prices. In Mawlamyine many new hotels were opened in the suburbs, quite far from downtown Mawlamyine, which is the area between the long pagoda dotted hill East of town, and the Strand road on the riverside. Most of the hotels in downtown Mawlamyine seem to be on the expensive side.

After the Western and European tourist inflow showed a decline; Myanmar has been shifting its tourism promotion towards the Chinese and South-East Asia markets. In 2018 the government rolled out a visa on arrival (VOA) for tourists from mainland China, Hong Kong, and Macao. Most other nationalities still need a normal visa or E-visa. From 1st October 2019 onwards, visitors from Italy, Spain, Russia, Germany, Switzerland, and Australia can also get a Visa on arrival.

The total number of tourists has increased with 33% in 2019, mostly due to the promotion of Chinese tourism. This has resulted in a jump in Chinese tourist numbers, in line with the increase in other Southeast Asian countries. However, the average stay has gone down from 9 to 6 days, due in a large part to the fact that Chinese tourists just do a very quick tour of the country. The increased number of tourists in 2019 is probably offset by the shorter period of their visit; and thus, there is no increase in total tourism revenue.

The recovery of tourism.

Myanmar has added hundreds of hotels, and thousands of rooms every year for the last 10 years. About 60.000 rooms have been added in the last ten years. The rise in tourist numbers has slowed down since 2016, for obvious reasons. After that, there was a gradual rise in numbers, which abruptly stopped in 2020 due to the coronavirus.

The COVID-19 crisis has make the tourist numbers drop in 2020 and 2021. The next winter season, and even 2022 will certainly not see any recovery due to the unrest all over Myanmar. Accurate predictions about the borders re-opening and the recovery of normal tourism are impossible to make.

 


Myanmar Hotel Market links

  • mmtimes.com - Myanmar Times: Fixing the tourism industry, 10 Aug 2018
  • mmtimes.com - Myanmar Times: Hotel supply glut leads to construction review, 22 September 2016
  • www.hvs.com/article - Hotel Valuation Services: In depth hotel market report. HVS is a global consulting and services organization.
  • myanmar-responsiblebusiness.org - Oct 2016: Hotel Policy is Broken: Here’s How to Fix It.
  • oxfordbusinessgroup.com - Myanmar Tourism Articles & Analysis. (limited free articles)
  • oxfordbusinessgroup.com - The year 2016 has been a sobering one; room rates in Myanmar's hotel sector witness decline.

 


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