Top Hotel Brands Coy on Burma Ventures

By Charlie Campbell 21 September 2012

The predicted expansion of Rangoon’s hospitality industry to offer world-standard accommodation options seems to be stalling with leading hotel brands thinking twice before entering the Burmese market.

Of the ten luxury hotel companies contacted by The Irrawaddy, one is already present, two admitted interest in coming to Burma, four have no immediate plans and three declined to comment.

Sally de Sousa, spokesperson for Mandarin Oriental Hotels, said her group have no current projects planned for Burma and it was uncertain if there would be in the foreseeable future with other priorities in play.

“Over the next couple of years we will open in Guangzhou, Shanghai, Beijing, Milan and Taipei and have a number of other development opportunities in the pipeline in Europe, US, Asia Pacific and the Middle East and North Africa,” she said.

Similarly, Brenda Yeo, of Sofitel Luxury Hotels, said, “I’m afraid we don’t have any upcoming plans in Myanmar in the short term and so do not have a timeline or roadmap to discuss this as yet.”

Burma boasted 300,000 arrivals in the first seven months of this year—nearly the same number as for all of 2011. There are 25,000 hotel rooms currently available across the country, 8,000 based in the commercial center of Rangoon, with plans to add a further 500 rooms this year by converting apartment blocks to hotels.

Karen Chung, spokesperson for Hyatt hotels, said that her group is looking at Burma but does not have a particular location or property that has been settled.

“Hyatt strives to be the most preferred hotel company in each of the segment that we serve and to have relevant distribution in the markets that our customers are traveling to,” she said. “Burma is certainly an exciting emerging destination and we are seeking opportunities to have Hyatt presence in the country.”

Jean Tan, spokesperson for Intercontinental Hotels, said: “We don’t currently have any hotels under development in Burma. However, we are always open to development opportunities with the right partners who would be keen to grow our brands in the right locations—this includes Rangoon and Bagan.

“We see the new FDI [Foreign Direct Investment] law as a step in the right direction. The possibility for foreign investments would open up opportunities for international companies to contribute to the growth of Burma, which could mean very positive developments for the nation in terms of job creation and economic progress.”

Burma’s new FDI law passed earlier this month allows wholly-owned foreign businesses in unrestricted sectors, such as hospitality, with a minimum 35 percent foreign stake. Nevertheless, the law has not been accompanied by a flood of concrete interest.

Daniel Ford, of Marriott Hotels, said that they have news to announce currently but admitted that his group is looking at the Burmese market.

“It is a country we are interested in and, as with all countries we operate in, we work with local real estate developers to build hotels which we then manage under one of our brands, depending on what is most suitable to the market,” he said.

Htay Aung, Burma’s deputy minister for hotels and tourism, told Voice of America earlier this month that Burma must upgrade human resources and infrastructure.

“We need to upgrade the standards, standards of services—very important,” he said. “The second thing is transportation—domestic transportation—and also upgrade of the hotels, the existing hotels. We have to upgrade the existing tourist sites in the same way, also open up the new tourist sites.”

The Shangri-La group already runs the iconic Traders Hotel in Rangoon but declined to comment on any further expansion plans in Burma. And neither The Peninsula Hotels nor its parent company has any plans to open a hotel or other operation in Burma at the present time or the foreseeable future.

The three hotel groups who declined to reply to multiple enquires from The Irrawaddy were Ritz-Carlton, the Four Seasons and Hilton.

Leading international chains currently inside Burma include: GHM which runs the iconic Strand Hotel; Orient-Express operates the Governor’s Residence; Pan Pacific Hotels Group has the Park Royal; while Rangoon also boasts the Chatrium Royal Lake, Savoy and Sedona.

Burma’s Hotels and Tourism Ministry declined to provide a response to the country’s accommodation shortage at the time of publication.