Tours cut Yangon stays

BANGKOK, 8 June 2012: Tour operators are cutting overnight stays at Yangon hotels in response to escalating hotel rates, a leading tour operator  attending the annual TTM here in Bangkok reported Thursday.

Instead they are diverting visitors to up-country destinations, while cutting the stay in Yangon wherever possible to just one night.

Hotel rates in Yangon have skyrocketed as much as 300% as city hotels adopt an opportunist policy to cash in on the rise in business travel mainly investors checking out opportunities after sanctions were eased.

Exotissimo Travel, Myanmar, managing director, Su Su Tin, told a media briefing at Thailand Travel Mart Plus that the country’s commercial capital is running short of rooms and this resulted rate increases from US$60 to around US$200 a night.

“We have about 25,000 registered rooms, but about 10% are being used as offices, clinics or rented by long-stay expatriates. It will take a couple of years to even bring these rooms back into the daily hotel inventory,” she said.

Investors are speeding up new builds and around 1,400 rooms should come online by next year. They include the following foreign investors: Rose Garden of Hong Kong (315 rooms); Shangri-la, Singapore (700+ commercial); St. Luke’s, Thailand (30 bungalows); Pearl Laguna, Thailand (100 rooms) and Centre Points Tower, Thailand (270 rooms).

Over the next two years tourism will grow to around 1.5 to 2 million international visits and that will require the city to double its hotel capacity.

To encourage investment in the hotel sector, nationwide, she said the government has designated hotel zones in key areas such as Mandalay, Inle Lake and Bagan.

“Investors come every day to search for business opportunities. It is just a matter of making the hotel investment happen.”

Facing these challenges tour operators are now moving their clients as quickly as possible out of Yangon to stay in Mandalay, but it is only a matter of time before hoteliers up country realise they are now in the driving seat as far as rate quotes are concerned.

To reduce exposure to Yangon’s high rates, tour operators try to cover Yangon in a morning, right after a group lands at the airport. They limit sightseeing to a half-day city tour with a short stop at Shwedagon Pagoda.

After lunch they transfer the group back to the airport and fly them to Mandalay, she explained.

Another option is to recommend off-season travel from May to September when hotel rates could be lower. But even that window is closing as more investors travel to Yangon over the next few months showing little or no concern for seasonal monsoon storms.

“We fear huge increase in Yangon hotels’ rates and it will dampen enthusiasm to visit the destination, while giving it a bad name.”

“Agents overseas believe they can sell other destinations that are better value. It is a challenge for us.”

Despite the downside there are enough leisure travellers who want to see Myanmar right now as  the country begins a long journey to a free economy and democracy.

Arrivals to Myanmar keep rising. From January to April this year, international arrivals grew 36% to reach 175,930, up from 128,910 in 2011.

Regional direct flight to other key cities such as Mandalay and Naypyidaw, the capital, are now being advocated. AirAsia Group and Silk Air of Singapore Airlines are trying to get permission to add flights to these destinations as quickly as possible.

Myanmar Airways International is also seeking to expand its domestic traffic and to develop a triangle route — Yangon, Mandalay and Bangkok.

The government’s new direction will bring back authorised money changers, international banking and the resumption of credit cards in the future all factors that will help to grow tourism. On another front it is talking about an old car buy-back programme, to introduce new cars to reduce pollution and free up the internet service providing market.