From Bust to Boom - Hyper season in Myanmar

The new Asian Tiger?

Last update: 1 Nov, 2016

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 boycot, 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 (excluding border tourists), and the total number including border tourists used to be between 600.000 and 800.000. Border tourists are the visitors who cross land-borders and stay mostly less than one day; e.g. day-trippers, local traders and tourists doing a visa-run. Until 2013 Yangon airport was the only entry point to Myanmar; but from August 2013 four land border crossing with Thailand have been opened for tourism entry.

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; the number of rooms in Yangon and Mandalay has almost doubled in 2016.

Myanmar Tourism statistics(2015 estimated)
Myanmar Tourism graph from 2008 until 2016

The graph shows the number of tourist arrivals at the international airports (Yangon, Mandalay, Naypyidaw) from 2006 until 2016 (left) and the number of hotel rooms in Myanmar (right). These tourism statistics excludes border tourists.

Myanmar airport arrivals
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 1.301.000 50000
DATA: Ministry of hotels and tourism statistics.
Tourist arrivals number excludes border tourists.

For 2016 the Ministry of Hotels and Tourism predicts that the number of tourists will grow from last year’s 4.68 million to 6 million (including border tourists). Of these 4.68 million tourists in 2015 about one-third, or 1.3 million, came through the international airports. Two-thirds were border tourists and the majority of those probably stayed less than one day; for example in 2015 the majority of the 500000 Chinese tourists entered through the Muse landborder. For a realistic analysis of Myanmar tourism it is better to exclude border tourists (www.mmtimes.com - Myanmars tourist numbers don’t add up). Which percentage of border tourists is a proper multi-day visitor is unclear.

It is getting busier in Burma but it's all quite relative if we compare it to Cambodia. In 2015 Bagan welcomed 400,000 visitors but ... Angkor Wat had 2.1 million visitors; five times more. There are now (2016) about 650 hotels in Siem Reap (Angkor) but less than 100 in Bagan. There are less tourists coming to all of Burma than the 2.1 million going to Angkor. So around Christmas/New Year it can be busy in the small towns around Bagan or Inle lake; but most of Myanmar is not overrun with tourists - yet.

 


Timeline of the Hotel Market development

2012 - Hotel rates in Myanmar start to rise. The number of tourists arrivals increases from around 800.000 in 2010 and 2011 to more than 1 million in the year 2012. (excluding 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, due to the fact that 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).

 


The hotel situation from 2011 to 2015

In the last four years the number of hotel rooms has about doubled in the main destinations, except in Bagan where the authorities are restricting the building of new hotels in the Bagan archeological zone. In 2011 there were only 731 hotels in all of Myanmar; and by 2015 there are 1279 hotels - an increase of 75 percent. 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.

year 2011 2015 PCT
Yangon793415434195%
Mandalay31816788213%
Bagan20082565128%
Nyaung Shwe937 2438260%
Mawlamyine194730367%
total rooms 1425427955196%
Hotel room numbers from 2011 - 2015
DATA: Ministry of hotels and tourism statistics.

The hotel situation in smaller places is less clear: In Mrauk-U no new hotels have been built since 2011; whereas Hsipaw has now 255 rooms instead of 52 rooms in 2011.

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.")

 


Hotel Market pricing forecast for 2016 / 2017

Though room prices have been edging down the last 2 years, especially in the luxury hotels. However; compared to the surrounding countries like India, Thailand or Cambodia the hotel rates are still higher. The luxury hotels in Yangon and Mandalay tripled and quadrupled their room rates at the top of the tourism rush in 2013; however in 2016 their room rate has dropped significantly.

The average room rate of 20 hotels and guesthouses in downtown Yangon(*) has dropped by about 30 percent since the apex in 2013. This drop has mostly happened in the more expensive hotels; the luxury hotels that tripled prices during 2012 and 2013 have cut 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 (mmtimes.com). The room rates in other towns and villages have fallen much less.

The outlook for travellers is good: the downward trend in the room prices will likely continue in the next few years. Room prices in Bagan may remain stable, for the reasons mentioned above.

*] The compared hotels downtown are a representative range from cheap guesthouses to top range in the grid area south of the railway around Sule pagoda. Hotels in downtown Yangon compared: Shanri-La Hotel (ex Traders), The Strand Hotel, Central Hotel, East hotel, May Shan Hotel, City Star Hotel, Asia Plaza Hotel, New Aye Yar hotel, Queens Park Hotel, Eastern Hotel, Ocean Pearl Inn, Motherland Inn 2, Beautyland Hotel II, Panorama Hotel, Park royal Hotel, Thamada Hotel, Okinawa Guest House, Clover City Central Hotel, Panda hotel.

 


Myanmar Hotel Market links

  • mmtimes.com - Myanmar Times: Hotel supply glut leads to construction review.
  • colliers.com - Colliers International Upper Scale Hotel Market Report 2015: Occupancy rates further declined for the third consecutive year dampening average room rates.
  • frontiermyanmar.net - Supply glut fuelling ‘rapid transition’ in hotel industry.

Colliers International also expects "Exorbitant property prices, highlighted as one of the biggest business barriers in Myanmar, are expected to be brought down to a level competitive with that of neighbouring countries by 2018."

 


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