Yangon overdoses on hotels

YANGON, 28 August 2018: Hotels continue to open in Myanmar’s commercial capital Yangon, despite telltale signs of a drop in international passengers flying to the gateway city.

According to a recent CAPA market summary, “Myanmar has not lived up to expectations, despite rapid growth in passenger traffic since the country opened up six years ago.”

CAPA noted that visitor growth has slowed over the past couple of years, leading to overcapacity on virtually every international route and low hotel occupancy rates.

The average international load factor in Myanmar was only 60% in 2017.

“The two largest routes, Yangon to Bangkok and Singapore, had load factors of only 65%, while Myanmar’s only two long-haul routes, Yangon to Doha and Dubai, had load factors well below 50%,” the CAPA analysis stated.

Despite the grim predictions and warnings that travellers are virtually boycotting the destination over Rohingya human rights abuses, hotel developers are optimistically pressing ahead putting the finishing touches to new up-scale properties.

The 74-room Yangon Excelsior, which involved a total remake of a heritage building that was once headquarters of a British colonial trading firm, opened 21 July.

Another makeover, this time the New Law Courts building on Strand Road, will see the 209-room Rosewood Hotels & Resorts open by the end of the year.

In 2020, or possibly early 2021, the 88-room Peninsula Yangon Hotel, another serious remake of a former historical building, will open in the middle of Yangon’s central business district.  It will cost the developer a cool USD126 million to open.

Yangon already has a surplus of luxury hotels, led by the iconic 31-room Strand Hotel that has been in business since 1901, but seriously renovated in recent years. There other players seeing a slice of the luxury end of the leisure travel market such as the 49-room Belmond Governor’s Residence and the 30-room Savoy Hotel.

Yangon has more than 180 public buildings that have been listed as “heritage” sites by the Yangon City Development Committee, but that doesn’t stop developers acquiring them and knocking them back to a stone or concrete shells and rebuilding them into flashy hotels, office blocks and even retail outlets.

Both the Excelsior and Rosewood open when Myanmar’s tourism sector is struggling to attract up-market leisure and business travellers. There has been a massive push back against the military’s brutal crackdown on Rohingya Muslim communities in Rakhine State in 2017.

It highlights the human rights issues and many tourists are not prepared to overlook them when booking holidays.

In that context, the opening of the Grand Mercure Yangon Golden Empire with 175 rooms and suites is not going to be an easy sell even for Accor’s sophisticated sales channels.

Featuring 175 rooms, the upscale property overlooks the renowned Schwedagon Pagoda and it marks the entry of Accor’s Mercure brand in Myanmar.

To celebrate its opening the hotel is offering a weekend getaway, USD100 with breakfast for two in a superior room, or a deluxe room at USD120 with breakfast for two from now until 30 September 2018.

Last year, Myanmar welcomed 3.44 million visitors up from 2.9 million in 2016, representing an 18% increase, but this year could see a much lower growth rate or even a decline.

Initial figures for the first three months of the year showed arrivals were down 3% on the same period in 2017.

For the first six months the decline was estimated at 2% on 1,722,049 visits, according to the latest update by Hotel and Tourism Ministry.