Local Companies Invest US$ 45 Million in Luxury Napyidaw Hotel

By Kyaw Hsu Mon 14 August 2014

NAYPYIDAW — Though Burma’s new capital Naypyidaw has developed a reputation as being somewhat of a ghost town, international hotel group Kempinski is confident about its prospects as it prepares to open a new luxury five-star hotel there in November.

Local conglomerate Kanbawza (KBZ) Group and Jewellery Luck Company have invested US$45 million total, taking 50 percent shares each, in what will be the city’s most expensive luxury hotel, Kempinski Hotel Nay Pyi Taw, managed by Europe-based Kempinski.

The hotel will be the second hotel in Naypyidaw to be managed by an international chain. It will be built in Hotel Zone 1, where the most expensive local and international hotels are located, near the summit venue for the Association of Southeast Asian Nations (Asean),

Kempinski acquired a 50 acre compound for the 141-room hotel in late 2012, according to the hotel group’s general manager, Franck Droin. He said renovations began in March this year on three main buildings, and that construction would be finished before the Asean Summit in November. He added that 180 staff would work at the hotel and had already started training.

“We have renovated over the past eight months. The hotel is designed with the flair of Myanmar, with traditional handicrafts,” said Lewis Ho, the principal of Aye Lwin & Associates, which is responsible for the interior design.

Room prices will be the most expensive in the city, ranging from US$220 to $4,000. Droin said he expected major clients to include state delegations visiting Burma for the Asean Summit, as well as NGO and business delegations.

Burma is chairing Asean for the first time in 17 years. Summits of the regional grouping began earlier this year in Naypyidaw, with many state delegations staying in Hotel Zone 1.

Since President Thein Sein’s government took control in 2011, international hotel groups have shown an interest in investing in Burma, seen as a new frontier in tourism. The ParkRoyal hotel group became the first international hotel group to set up shop in Naypyidaw earlier this year, while the Hilton hotel group has also expressed an interest.

The Kempinski hotel group was founded in 1897 in Europe, with hotels now in Europe, Asia, the Middle East and Africa.

But some are questioning whether Naypyidaw—a city that seems mostly empty of people for much of the year—needs more hotels, when many rooms have remained empty during previous Asean meetings.

“I don’t think hotels in Naypyidaw can survive after the Asean Summit this year. Many international delegations come due to meetings, but in terms of regular guests, there won’t be enough beyond the summit,” said Kyaw Lin Oo, executive director of the Myanmar People Forum Working Group, which organize forums for the public in the capital.

There are more than 50 local and international hotels in Naypyidaw, according to the Ministry of Hotels and Tourism.