Bust to Boom - Tourism in Myanmar

Last update: 07 Oct, 2018

From bust to boom to .. flatlining.

Tourism and the hotel market in Myanmar

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 dipped in 2016; and levels off in 2017. Tourism number increases of 50% year-over-year are a thing of the past and future growth will be more gradual. The reason for the dip in visitor's numbers in 2016 is due to the unrest in Rakhine and the Northern Shan region.

Of the 3.384.000 tourists in 2017 1.3 million (1.304.000) came through the international airports. More than 2 million (2.080.000) came through land borders. Therefore, 39 percent arrive by air, and 61 percent through land borders. If these overland travellers are multi-day visitors or just do a one day border hop is unclear.

The graph below shows the number of tourist arrivals at the international airports (Yangon and Mandalay) from 2006 until 2017 (left) and the total number of hotel rooms in Myanmar (right). These tourism statistics exclude land border tourists.

Myanmar Tourism statistics
Myanmar tourism graph from 2008 until 2017.
Left: tourist arrivals at the international airports.
Right: total number of hotel rooms in Myanmar.

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

 


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 succesfull. 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 quite isolated. In 2017 there are only two new resorts and it's clear that this hotel zone is not a great succes. 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.

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 reasonable 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 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.

 


Timeline of tourism stats and the Hotel Market development.

February 2012
Hotel rates in Myanmar start to rise in 2011. 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, 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).

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 Thaland 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. Surprisingly, there are many new hotels in towns like Mawlamyine and Pyin-U-Lwin, but no significant decrease in room prices. On Ngapali beach new budget hotels and guesthouses are being opened; but tourism to Ngapali and Mrauk-U is decreasing for obvious reasons.

 

*] Downtown Yangon is the grid area south of the railway around Sule Pagoda. Hotelroom price changes are compared in US-dollar rates.


The hotel situation from 2011 - 2017.

In the last six years the number of hotel rooms has increased two- or threefold in the main destinations (the Big-4), 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 2017 the number has doubled to 1590 hotels. 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.

town 2011 2017 PCT
Yangon793420123254%
Mandalay31818457266%
Bagan20082919145%
Nyaung Shwe937 3258348%
Mawlamyine194955492%
total rooms 1425435712251%
Hotel room numbers from 2011 - 2017
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 381 rooms instead of 52 rooms in 2011. Mrauk-U is located in northern Rakhine state, and most western countries have a negative travel advice for that area.

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 analysis and forecast for 2018

Compared to the surrounding countries like India, Thailand or Cambodia the hotel rates in Myanmar are still higher in many places. Hotel room rates (in US-dollars) have been edging down the last 5 years, especially rates for luxury hotels. The luxury hotels in Yangon and Mandalay that tripled their room rates in 2013 have lowered their room rates significantly.

The supply and demand law is quite valid in Myanmar cities; Yangon has limited room supply and will remain an expensive capital; in other places, for example in Mandalay or the Shan state, the hotels are much cheaper. Room prices in Bagan are gradually becoming cheaper, but will remain on the high side for the reasons mentioned above.

The downward trend in the room prices will continue in the next years. Hotels are still being built whereas the tourist numbers seem to increase only gradually in 2018; it is likely that supply and demand will make Myanmar hotels cheaper. In Mandalay, Bagan, and Inle lake many budget and mid-range hotels have opened, and the hotel shortage has by and large disappeared.

The Myanmar hype is definitely over. In the first half of 2018 only 560000 international visitors had arrived through Yangon airport. The overall rate for Chinese and Thai tourists, some arriving by land, in the whole country increased a surprising 34pc and 16pc respectively by the end of July, against a drop of 10pc at Yangon airport. In the past Myanmar has projected that it would attract 7,5 million visitors by 2020; but given the recent growth rates it will not even reach 2 million visitors.

 

Global New Light of Myanmar - 6-OKT 2018.
An article in GNLM shows that until september 2018 the number of tourist is about level with previous years.

After the Western and European tourist inflow showed a decline due to the turmoil in northern Rakhine State; Myanmar is shifting its tourism promotion towards the Chinese and South-East Asia markets. More in the Myanmar Times: www.mmtimes.com. In 2018 the government rolled out a visa on arrival (VOA) for tourists from mainland China, Hong Kong and Macao. All other nationalities still need a normal visa or eVisa.

 



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
  • 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 - Visitors to Yangon are benefitting from a freefall in hotel prices.
  • 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.

 


Myanmar HOME German Dutch English