Myanmar ups its game
BANGKOK, 21 January 2013: Association of Thai Travel Agents says Myanmar will become Thailand’s main tourism competitor over the next five to 10 years.
ATTA president, Sisdivachr Cheewarattanaporn, said: “Over the next five to 10 years, if Myanmar fully promotes its tourism potential, adds more services and facilities, it will become Thailand’s major competitor in international markets.”
However, he noted that as Myanmar opens its doors to investors and tourism, more Thai tourists would also visit the country creating a demand for more travel packages in the local outbound market.
“The cost of an outbound travel package to Myanmar is still high at around Bt20,000 to Bt30,000, similar to the cost of a four-day package to South Korea as there are not many hotels in Myanmar that can cater to tourists.”
ATTA members concentrate mainly on inbound travel and selling extension tours for their clients mainly to neighbouring countries. Myanmar in the past was one of the most profitable for Bangkok-based travel firms to sell extension tours. Most the major European tour operators were hesitant to get involved in doing direct business with Myanmar as long as there were sanctions in place. It allowed Bangkok partner agencies to carve out a profitable niche business, using Bangkok as the gateway.
Myanmar’s emerging travel business will pose threats on two levels. The trade in Myanmar will compete head-on with Thailand in specific markets such as Japan and Europe.
It will source business direct as more airlines serve the country reducing Bangkok’s gateway status. Visitors had to visit Bangkok first to apply for visas to travel to Myanmar, but that trend will diminish as the country adopts visa-free, visa-on-arrival, or easier visa rules.
The ATTA president suggested that Thailand needs to upgrade its tourist attractions, promote new ones and connect travel routes to reduce the density at popular tourist destinations such as Bangkok and Phuket to spread tourism throughout the country.
Currently, the tourism and hotel business in Myanmar has improved dramatically and should grow further as more investment flows into the country. The only downsides are the high hotel rates in Yangon and a lack of rooms to offer tourists at other destinations.
Myanmar has competitive advantages such as its rich natural resources and strong cultural heritage that remains intact.
Hotel companies from Thailand have invested US$263.25 million (Bt8.3 billion) in Myanmar to build 1,896 rooms in 11 hotel brands, including Andaman Club, Kandawgyi Palace, Nikko (Chatrium), Mandalay Hill and Pearl Laguna.
Investments from Singapore are the highest in the hotel industry at about US$597 million, followed by Thailand, Japan with US$183 million, Hong Kong with US$77 million, Malaysia with US$20 million and Britain with US$3.4 million.
In terms of investment from Thailand, the power sector ranks the highest with about US$6 billion, followed by oil and gas at US$2.19 billion, manufacturing at US$630.84 million and the hotel and tourism industry.
After recent political changes, Myanmar’s new government has been making attempts to reform existing investment legislation to promote the tourism industry.
This includes a land-lease law that may be extended to 70 years. It could start at 50 years and then offer two extensions of 10 years each. The existing law allows a lease of 60 years, starting at 30 years and then two renewals of 15 years each.
In terms of hotel investment, the association will also propose that the government protect local operators. For example, foreign investors should not be allowed to invest in one- and two-star hotels. However, they could enter into joint ventures with locals to build three-star hotels or invest fully in four- and five-star hotels.
Myanmar currently has six domestic airlines flying from Yangon to Nay Pyi Taw, Bagan and Mandalay. It also has 759 licensed tour companies, of which one is wholly foreign owned, 15 are joint ventures and 743 are local firms. At present, there are 16 international airlines flying to the country – 15 to Yangon and one to Mandalay.