Yangon to get 1670 hotel rooms next year

Myanmar information search service

The shortage of mid-range and high-end hotel rooms in Yangon should ease next year when 1670 new hotel rooms are slated to become available, a Ministry of Hotels and Tourism official said earlier this month.

A further 1255 and 2455 rooms are scheduled to open in 2014 and 2015 respectively, U Aung Zaw Win, director general of the ministry’s Directorate of Hotels and Tourism, said at a tourism development workshop last month.

Centrepoint Hotel in downtown Yangon is expected to open 270 rooms in April 2013, while the 100-room Nawarat Hotel on Insein Road in Hlaing township will also open around the same time, he said.

Near Kandawgyi Lake, Shangri-la will launch a 240-room development during 2013 and 60 rooms will open at Rose Garden Hotel. Both represent the first phases of larger projects; Shangri-La will open another 460 rooms in 2015, while Rose Garden will add another 255 rooms in 2014.

Meanwhile, Sedona plans to bring another 400 rooms online in 2015, while a Vietnam property developer, Hoang Anh Gia Lai – better known as HAGL – has applied for permission for a 585-room development that it also expects to complete in 2015.

The ministry is also estimating 1000 rooms will come online at Myanmar-owned hotels in each of the next three years but provided no further details on its forecast.

U Aung Zaw Win said the ministry was keen to see even more private investment in hotel projects, particularly in Yangon.

He said the ministry was anticipating 600,000 tourists in 2012 and up to 900,000 next year.

“If that happens, we definitely won’t have enough hotel rooms for travellers at current levels. That is why we are seriously looking at how to encourage hotel investment,” he said.

The city has 8319 hotel and guesthouse rooms, which the ministry estimates is only enough for a maximum of 750,000 tourists a year.

Minister for Tourism U Tint Hsan said the ministry had met many prospective foreign investors but land supply was an issue in Yangon.

“We found that the investors asked for 100 acres to 500 acres to build a hotel,” he said, adding that they wanted to develop not only a hotel but also retail and nightlife spaces on the same site.

“We will negotiate with the chief minister of Yangon Region for the land,” he said.

But Yangon Region Chief Minister U Myint Swe said at the workshop that acquiring land in Yangon for major projects is not always easy, as brokers and investors often drive the price of land up after a project is announced.

“We have to face some problem when we acquire the farmland. Land prices will always increase when investors [find out about the project] and start buying the land. We have already faced that kind of problem in Dala and Kyeemyindaing [townships],” he said. “But we will help to solve that land problem.”

He also said the ministry should encourage not only foreign businesspeople but also Myanmar nationals to invest in the hotel sector, particularly in mid-range properties.

He said the capacity of the water and electricity supply networks also needed to be considered when approving hotel projects. He said the Ministry of Hotels and Tourism estimates that about 50 gallons of water is needed each day for a hotel room in Yangon. “So for a 100-room hotel, we need to make sure we can supply the 5000 gallons a day.”

A spokesperson from Shangri-la Group, which also operates Traders Hotel, confirmed it would open the first phase of its “twin tower” project near Kandawgyi Lake in 2013.

The development was shelved in the late 1990s following the Asian Financial Crisis.

“We have restarted this project because of the demand” for hotel rooms in Yangon, the spokesperson said.

In an interview with The Myanmar Times earlier this year, the then-general manager of Traders Hotel, Mr Craig Powell, said the 240 rooms opening under the first phase of the Kandawgyi project would be serviced apartments.

“The timing’s right I think [because] there is high demand for quality serviced apartments and a major shortage. Clearly we can see there’s an opportunity there and that’s why we want to start them up again, or rather finish what we started,” Mr Powell said. “That’s going to transpire very soon.”

Yangon has just 1850 international-standard hotel rooms, all of which were opened before 1999, Colliers International said in its Yangon (Myanmar) Property Market Report 1st Half 2012.

Despite the likely addition of several thousand more rooms in the next three years, “the hotel market in Yangon still has significant room for growth in the future as Yangon develops as a business hub and tourist destination”, the report said.

Source: Myanmar Times

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