Vietnam and France are set to become major hotel investors in Rangoon, as investors eye the burgeoning Burmese tourist industry, domestic media reported last week. Indian companies are also looking at hotel investments, officials said.
The demand for hotel rooms has risen as the number of tourists and busines arrivals has increased rapidly.
Among them, HAG & Land from Vietnam is expected to invest US$300 million in the hotel sector, Weekly Eleven reported. Oberoi Hotels & Resorts from India has also expressed interest.
Htay Aung, the deputy minister of hotels and tourism, told the Sasin Bangkok Forum that Accor Group, the market leader in Europe, is also interested in making investments in the hotel industry. Accor is a French hotel group founded in 1967. It operates in 92 countries.
The Bangkok Post this week quoted Htay Aung as saying that the Shangri-La Group will build a 240-room hotel.
Ministry figures say that Burma had 731 licensed hotels with 25,002 rooms at the end of 2011.
Currently, Burma has about 20 foreign-invested hotels in Rangoon out of 35 in the country, which are mainly operated by companies in Singapore, Japan, Thailand, Malaysia and Hong Kong.
A delegation of International Enterprise Singapore Business Department, led by the director of the Southeast Asia Group, Tan Soon Kin, held discussions with officials at the Ministry of Hotels and Tourism early this month, said Eleven News.
Singapore is now the biggest foreign investor in Burma’s hotel and tourism industry, with the Sedona Hotel and Park Royal Hotel in Rangoon and the Sedona Hotel in Mandalay.
Other major foreign investors in the country's hotel and tourism industry come from Thailand, Japan, Hong Kong, Malaysia and Britain. The United States and other countries have recently expressed strong interest in the sector.
Currently, high-end rooms in Rangoon are normally filled. Burma has a total of nine government-owned hotels and 678 private hotels, and 11 hotel zones in regions where tourists visit frequently. Prices have risen sharply from around US$ 50 to up to $300 for luxury rooms. Recently, there were reports the government had ordered hotels to charge less for top room rates.
Last, year, the largest number of tourists came from Thailand, followed by China. French, German and British accounted for the highest number of Western tourists in Burma.
Mizzima reported in January that Europeans accounted for 65,367 travellers, led by France with 13,102 visitors, Germany with 10,932, and Britain 7,195.
“Arrival numbers are increasing 20 per cent to 30 per cent every year”, said Lynn Zaw Wai Mang, general manager of Unique Asia Travel in Rangoon. “It means we need to build more hotels, expand airlines and develop our infrastructure so we can offer a better level of service to visitors.”
While the numbers are good, tourism industry spokesmen are citing potential problems down the road and calling for the newly elected government to undertake rapid infrastructure changes.
An article in the Myanmar Times in January cited concerns about the country’s lack of hotels and transport capacity, poor infrastructure, high prices and inefficient booking systems.
“The Myanmar tourism industry is now at a point where we need to become more professional,” said Edwin Briels, general manager of Exploration Travel and Tour.
In June, Mizzima reported that four historical state-owned buildings in Rangoon were on the real estate market to be used as possible hotels to help boost Rangoon’s room shortage.
The former office of the Immigration and Manpower Department (next to Rangoon City Hall) has undergone major renovation. Private construction companies are renovating many old government office buildings in Rangoon, mostly built during the British colonial era.