Jul 16, 2011

Tourist arrivals up by 25%

In the first five months of the year, following a record-breaking 2010, figures from the Ministry of Hotels and Tourism show an increase of tourist arrivals, and industry sources say they are confident of sustained growth over the next 18 months.

From January 1 to the end of May, 151,084 tourists visited the country, a 24.3pc increase on the same period in 2010, and the industry is on track to better the 295,174 foreign tourists who visited through the Yangon gateway last year.

U Phyoe Wai Yar Zar, secretary of the Myanmar Marketing Committee (MMC), said the industry was “in good spirits” and anticipating an increase of “at least 20-25pc” in the 2011-12 fiscal year, which ends March 31.

“They are [investing] their resources in services and products in anticipation of increased business in 2012. Provided that the political climate remains relatively stable, based on the trend of increasing tourist arrivals we are looking forward to having 350,000 to 375,000 tourists in 2012,” he said.

He said an increase in capacity on both international and domestic air routes would support growth, but further investment in infrastructure was needed to handle an increase in tourist numbers.

“We would like to see some European airlines operating directly to Yangon,” he said. “To match the growth in air capacity, we will need more hotels and newer vehicles for transportation services.”

Mr Frank Janmaat, general manager and country director of KMA Hotels Group, said hotel occupancy rates at most destinations had increased considerably in the past six months.

“The election brought a lot of relatively positive news in the foreign media and the release of Daw Aung San Suu Kyi even more so. Thanks to this, people started to see Myanmar through different eyes and felt more confident to consider a holiday or a business trip,” he said.

“There has been also a considerable increase in prospective businesspeople who expect that sooner or later the sanctions on the country will be lifted and who are realising the huge potential Myanmar has to offer.”

He said while the number of hotel rooms was limited it had been more than sufficient up until last year. “With the increasing number of tourists we will see a healthier market balance between buyers and sellers. In the past, hotels had very little negotiating power in contract negotiations with tour operators or travel agents.”

Mr Janmaat added that he expected growth to continue, as Myanmar had many positive attributes.

“A lot is still to be done of course, like improving the infrastructure and training, but I am sure that in a few years time we will think of November 2010 as the beginning of a new era.”

Daw Susie Moe Aung, director of sales at Parkroyal Hotel in Yangon, said much of the growth was being driven by business travellers, particularly from Asian countries.

She said demand was expected to continue to increase “through the rest of the year and into 2012” and the hotel planned to increase room rates next year to take advantage of a tight market.

“For the coming year, the number of rooms available in the market, especially in Yangon, will be limited relative to arrivals,” she said. “It is normal [to increase room rates]. Most hotels do it each year.”

However, some travel operators see the higher costs, along with the strength of the local currency, as a worrying sign for the industry.

While Myanmar operators have never been able to compete on price with some other Southeast Asian markets, U Aung Naing, managing director of Yangon-based EPG Travel, said it was possible prices could get “out of control”.

He said transportation costs were increasing and any company “taking a risk by operating with thin margins could find themselves in trouble”.

“New [tourism] markets are opening up [to Myanmar operators] but rates have gone up, the exchange rate is not favourable and in addition to that customers want better prices,” he said.

“The danger is that since the destination looks like it is getting popular, the prices can get out of control and Myanmar could become an expensive destination with mediocre service. Myanmar was never considered a cheap destination anyway but now it is more expensive than ever.”

Recently released figures from the Pacific Asia Travel Association (PATA) show Myanmar outperformed the Asia Pacific region as a whole in April 2011. The region recorded a year-on-year increase for the month of 6.8pc, with an additional 1.8 million arrivals.Meanwhile, international visitor arrivals to the region grew by 5.4pc in the first four months of 2011 year-on-year.

Source: Myanmar Times