Ready or Not, the Tourists Are Coming

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Consult-Myanmar welcomes you to the 27th SEA Games Myanmar, 11-22 Dec 2013

“Right here,” says U Aye Kyaw, pointing to the floor of his office in downtown Yangon, where two Scandinavian tourists had to sleep after they were unable to find proper accommodation.

That was last year, when a record one million foreign arrivals put unprecedented strain on Myanmar’s underdeveloped tourism infrastructure.

The upsurge then of visitors keen to experience the country’s largely unseen attractions came with an awkward spotlight on its lack of hotel rooms, dilapidated transport systems and even the quality of its food. This year officials are hoping for 1.8 million visitors, and tourism services and infrastructure are still struggling to handle the potential windfall.

For some sectors, such as hotels, times have never been so good. “They are getting a golden egg every day,” says U Aye Kyaw of Rubyland Tourism Services in Yangon, referring to the high occupancy and steep room rates enjoyed by accommodation providers.

It’s better days for tour guides, too, as long as they don’t mind a grueling work schedule.

“I was on the job every single day from November to February last year,” said Yangon-based U Zaw Lynn, a 15-year veteran in the high-end tourism business who expects to put in the same hectic hours this high season.

“I was like a zombie,” says 24-year-old freelancer Ko Aung Soe Lin, describing his condition after working a similarly frantic schedule last year as a first-time guide.

Daily rates for top guides have increased from around US$25 a couple of years ago to between $40 and $50 now, says U Zaw Lynn. In mid-September, the Myanmar Tour Guide Association proposed that guides should be paid at least $35 a day.

To hold on to guides, some tour operators in Yangon are offering staff positions to star freelance performers, at around $1,500 a month. One of the country’s largest operators, Tour Mandalay, is also offering permanent contracts, according to product manager Marek Lenarcik.

Top guides in Myanmar are often, above all, skilled diplomats and problem solvers.

“When a car breaks down, or when a flight is delayed, when people get sick, or when there are issues of misinterpretation between tourists and locals—you have to know how to fix all these issues fast,” said U Zaw Lynn.

The guide shortage means companies are also considering hiring unaccredited persons who can offer special skills, such as languages.

“There are people without the license but who are as good as the [accredited] guides. If they do have this kind of quality, and they do have these skills, I am happy to work with them,” says Ma Dar Le Khin, director of 7Days Travel & Tour, adding that the company had not yet made a final decision on such hires.

The Ministry of Hotels and Tourism, which is responsible for accrediting tour guides, said it has added 184 certified guides since 2011, bringing the total to 3,344 as of August.

Tour operators are also hiring other staff. At Unique Asia Ticketing and Tour, an original workforce of eight has increased to 30, according to executive director U Lynn Zaw Wai Mang. Tour Mandalay employs more than 150 people, of whom about a quarter were hired in the last two years.

The tourism industry may see its greatest moment—and its biggest challenge—in mid-December, when the Southeast Asian Games will be hosted by Myanmar at the same time that the tourism high season is peaking.

Thousands of athletes, training staff, government delegations and fans are expected to descend on Naypyitaw, Yangon, Mandalay and Ngwe Saung beach from Dec. 11-22 for the biannual competition.

The website has been working with the Ministry of Hotels and Tourism to offer online tour package booking for visitors to the Games.

Oway founder U Nay Aung was quick to spot the market potential of online bookings for everything from hotels and airlines to tour operators and car rental agencies.

“My goal is to take positions that have potential for very fast growth,” said the entrepreneur who spent 16 years overseas before returning to his home country in 2011. “The travel industry, in its current form, is very poorly served.”

The rise in online bookings from abroad may leave less room for traditional operators, who can find themselves dealing with “leftovers” such as providing local transport, where fuel and driver costs mean there’s little room for profit.

“One operator told me he made between $100 and $200 total, providing local transport to a tour group,” said U Zaw Lynn. “He joked that it was better to be a guide than an owner—you’d make more money.”

The Missing Middle

Like the economy as a whole, the tourism industry is still largely catering to the high and low ends of the market, with limited space for those at the middle level.

High-end tourists can afford the top hotels, luxury private transport, the most experienced guides and the best food. Backpackers arrive with few expectations by way of conditions.

The middle market—travelers who hope to pay reasonable prices for reasonable services—are still challenged on everything from room rates to reliable transport to what to eat.

“Food is still a big issue here,” said U Zaw Lynn, referring to quality, hygiene and price. “Small restaurant fare and street food is not comparable to, say, Thailand, where you can get a decent, healthy meal for as little as a dollar. Here, a basic meal will cost more than that. And your evening curry may have been cooked in the morning, or even the day before.

“It’s a bit of a worry for us, food. We recommend good restaurants that are known to us. But if clients want to try other places, we give them the full information on the situation.”

The biggest industry challenge this year is still room shortages. For U Aye Kyaw of Rubyland, this could be ameliorated relatively quickly if the government would allow homestays, which are technically illegal under current law—a situation that looks unlikely to change anytime soon.

High-end hotels in Yangon like Traders, the Park Royal and Chatrium have reconverted former hotel rooms that they had turned into office space when occupancy rates were low.

As other international hotel chains embark on new projects, just under a thousand new international-standard hotel rooms are expected to be ready in Yangon by the end of the year, according to property firm Jones Lang Lasalle.

Nationwide, the Ministry of Hotels and Tourism says there are 859 licensed hotels and guest houses, offering more than 31,000 rooms. That is up from 731 licenses in 2011, with about 28,000 rooms.

Enterprising newcomers are also entering what for the moment is an attractive hotels market.

Ko Ye Man Thu, a 25-year-old Yangon resident, will this month open the 28-room Grand Empire Blazing Hotel in Bagan, where last year some hapless tourists who couldn’t find rooms slept in local monasteries and even in cemetery grounds.

“I think I can help the tourism industry,” he said in September as hammers pounded and electric drills whirred at his unfolding hotel site.

Here Come the ‘Happy Police’

One innovation set for this year is a 175-person strong tourist police force charged with servicing visitors at tourism hotspots including Yangon, Mandalay and Bagan.

Mark Wilson, an American colonel with 40 years of law enforcement experience, most recently in training police in Afghanistan, Iraq and Jordan, has been enlisted by the Ministry of Home Affairs to train the force.

Part of the challenge, he says, is “demilitarizing” the cadets. “So now it’s a new day, a new Myanmar, and I’ve got the happy police. Instead of the gray shirts with the very military-looking uniforms, we’re putting them in yellow polo shirts that say Tourist Police on the back, and telling them to smile and talk to people and wave.”

He added, “I’ve been training them more as Disneyland security guards than as police.”

By mid-September, the tourist police had their own Facebook page, but staff at the Pansodan Road head office in Yangon still appeared unready to handle walk-in queries from foreign visitors. When approached by this reporter on two separate occasions, the officers on duty were unable to answer a few simple questions in English.

“It’s going to be an interesting season,” said Mr. Wilson, who also teaches basic “police English” to the officers three times a week. “With the influx of people for the SEA Games, and visitors coming to watch the games, and the regular tourists, it’s going to be a big season. A lot of challenges.”

Though annual tourist arrivals have risen steadily since 2011, and the strain has shown, there is little danger of Myanmar being overrun with visitors just yet.

The numbers coming here are still tiny compared to the 22 million tourists that neighboring Thailand sees annually. Even Laos, with a population of 6.5 million, welcomed 3.4 million visitors last year.

But the government has big plans: 3 million annual foreign arrivals by 2015 and 7.5 million by 2020. The Ministry of Hotels and Tourism is planning to coordinate nearly $500 million in spending on the sector through 2020.

In turn, the ministry expects revenue from tourism-related services to rise from $534 million last year to more than $10 billion in 2020.

Slowly but steadily, linkages within and outside of Myanmar are being improved.

Domestic airline Air KBZ will deploy two more commercial planes starting this month, and hopes to put another on the tarmac before the end of the year, nearly doubling the carrier’s current fleet of four.

Myanmar Airlines International is also expanding links with regional destinations, while Thai carriers such as Nok Air and Bangkok Airways are introducing direct international flights to tourist destinations such as Mawlamyine and Mandalay, as well as to Naypyitaw.

In the east, four entry points on the border with Thailand were opened in late August to overland travel by foreigners for the first time.

Most of the 465,614 visitors entering Myanmar through land gateways last year were Thai citizens who stayed for less than one day. Foreigners entering the gateways with a visa can now stay for up to 28 days and travel onwards.

U Aye Kyaw, who is a board member of the Union of Myanmar Travel Association, said the UMTA will send representatives out to the region this year to provide tourism-related training.

“We are responsible, as an association, to train those people in how to handle the tourists,” he said.

Meanwhile, new and perhaps surprising players are readying to capture segments of the market.

In September, Saw Lah Lel, manager of the newly opened Moe Ko San Travel and Tour Company—owned by the Karen National Liberation Army’s 7th brigade—sounded an optimistic note to Karen News.

“When the gates are opened, foreigners will be able to go in and out of the country freely. The rate of visitors to [Myanmar] will increase dramatically,” the budding entrepreneur told the publication.

Improving the experience of travel to previously inaccessible areas will take time, however, as 7Days Tour’s Ma Dar Le Khin can attest. During a mid-September attempt by a client to travel to Thailand via the Myawaddy crossing, impassable roads required that the traveler abandon the tour car and enlist a motorcycle to carry him the remaining 40 miles to the border.

Marcus Allender, a British national who came to Myanmar as a tourist in 2010 and returned last year as an entrepreneur to set up a tourism-related website, journeyed in August to formerly off-limits parts of Tanintharyi Region.

“The railway down to Dawei, it’s scarcely believable, but it was built, according to Wikipedia, in 1998,” he said. “In fact, it would be bad by 1898 standards.”

But while the trip—which involved long hours atop a truck on poor roads—was at times dangerous, uncomfortable and energy-sapping, it was also “utterly fascinating”—for the landscape, the “sheer unfamiliarity” of everything and the welcoming Mon people.

Said Mr. Allender: “It was more than worth the effort.”

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