From Bust to Boom - Hyper season in Myanmar

The new Asian Tiger?

Last update: 07 July, 2017

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
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.
The arrivals numbers exclude border tourists.

Of the 4.68 million tourists in 2015 about one-third, or 1.3 million, came through the international airports. Two-thirds were border tourists and many of them 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 300.000 visitors but ... Angkor Wat had 2.1 million visitors; seven times more. There are in 2016 about 650 hotels in Siem Reap (Angkor) but less than 100 in Bagan. 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 tourism stats and the Hotel Market development.

February 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).

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. (mmtimes.com - Hotel supply glut leads to construction review, 22 September 2016)

 

*] The compared hotels downtown are a representative range from guesthouses to top range in downtown Yangon: the grid area south of the railway. Hotelroom price changes are compared in US-dollar rates.


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.")

 

Myanmar Tourism in 2016 - is the Burma-hype over?

 

In 2015, there were 4.68 million tourists, and in March 2016 the ministry of Hotels and Tourism predicted that at least six million tourists would travel to Myanmar in 2016 (total number including border tourists). During 2016 the ministry remained optimistic until the last half of 2016. Finally it turned out that the actual number of foreign visitors to Myanmar in 2016 dropped to below three million. The drop in arrival numbers is misleading because since 2017 the ministry "cleaned up the numbers" and now only counts visitors with a visa, who can be considered real tourists compared to one-day visitors crossing the land borders.

Myanmar Tourism statistics(2016 estimated)
Myanmar Tourism graph from 2008 until 2016 including border tourists.
*] NOTE: the 38pc decline in 2016 is due to a different way of counting foreign visitors.

 

Some of the reasons for the dip in visitor's numbers can be the Bagan earthquake in august 2016, the fighting in the Northern Shan region or the unrest in Rakhine. Other factors can be that Myanmar saw the largest increase of visitors from China in 2014 and 2015, but in 2016 tourism numbers over the Mong-La border dropped due to fighting in the Northern Shan region.

Or perhaps the unprecedented Burma-hype is over. Other countries in Asia have become more popular; for example Vietnam's tourism is surging and India attracted 8,89 million visits in 2016, an increase of 10%. Tourist numbers to Japan jumped 47 percent in 2015 and rose 22 percent in 2016.

 


Myanmar airport arrivals from 2008 - 2016

Myanmar Tourism statistics(2016 estimated)
Myanmar Tourism graph from 2008 until 2016
( 2016 numbers are an estimate)

 

The overall picture is that the number of tourist arrivals just had a temporary slowdown in 2016; and in 2017 will continue to grow. One thing is certain: tourism number increases of 50% or more year-over-year are a thing of the past.

 


Hotel market analysis and forecast for 2017

Compared to the surrounding countries like India, Thailand or Cambodia the hotel rates are still higher. Hotel room rates (in US-dollars) have been edging down the last 3 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 capitalist laws of supply and demand are quite valid in Myanmar cities; Yangon has limited room supply and will remain an expensive capital; in some other towns, for example in as the Shan state, the hotels can be much cheaper. Room prices in Bagan may remain stable, for the reasons mentioned above. For travelers it's worth the effort of planning a holiday carefully - stay longer in cheap places and a short time in the busy capital.

The outlook for travelers is good: the downward trend in the room prices will likely continue in the next few years. Hotels are still being built whereas the increase in tourism is slowing down; supply and demand wil make Myanmar cheaper.

 


Myanmar Hotel Market links

  • mmtimes.com - Myanmar Times: Hotel supply glut leads to construction review. (22 Sept 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.
  • oxfordbusinessgroup.com - Myanmar Tourism Articles & Analysis. (limited free articles)
  • myanmar-responsiblebusiness.org - Oct 2016: Hotel Policy is Broken: Here’s How to Fix It.
  • oxfordbusinessgroup.com - The year 2016 has been a sobering one; room rates in Myanmar's hotel sector witness decline.

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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