THE number of international standard rooms in Yangon is set to soar within the next four years as brand-name hotel groups enter the as-yet untapped Myanmar market, predicts Jones Lang LaSalle (JLL) Hotel Group in its recent Myanmar Hotel and Tourism Report: Spotlight on Yangon publication.
While Myanmar’s Ministry of Hotels & Tourism counted 9,110 hotel rooms in the city, JLL estimated that only 1,500-2,000 were of international standard due to previous economic sanctions that kept European and American hotel operators out.
However, the situation is set to change in dramatic fashion after Myanmar’s government signed into law a new foreign investment ruling allowing foreigners to own 100 per cent of a company (TTG Asia e-Daily, November 21, 2012).
According to JLL, the number of international standard rooms is expected to quadruple by 2017 to close to 7,000.
A large proportion of future supply will come from existing hotels converting office space into guestrooms, such as in the case of Chatrium, Traders, Strand and The Park Royal hotels, and hotels reopening after years of lying dormant.
Hilton Worldwide has signed an agreement for a 300-room Hilton property (TTG Asia e-Daily, March 6, 2013); Shangri-La Hotels & Resorts will open a Shangri-La Residence in Yangon later this year and a Shangri-La hotel in 2016; Accor will debut the 366-room Novotel Yangon Max in 1Q2014 (TTG Asia e-Daily, February 22, 2013); while Best Western International has its eye on the midscale market with the rebranded 189-room Best Western Green Hill Hotel (TTG Asia e-Daily, May 22, 2013).
Noted the report: “In light of the projected influx of demand over the next two years and limited room supply of international standard in Yangon, hotels have been aggressively renegotiating contracts with travel consultants in an effort to increase rates.”
But it also cautioned: “While the growth in visitor arrivals, lack of room supply and the allure of one of Asia’s last frontier markets can lead to greater opportunities for early entrants, conducting business is still very challenging given the lack of a transparent legal framework and hence any investment carries a significant level of risk.”