Colliers Property Report – Myanmar Hotel Quarterly Q4 2018


No new completions were observed in Yangon as of Q4 2018. Few select developments that were anticipated to open during the quarter have seen limited construction developments. In turn, increases on both occupancy and ADR levels transpired.

Nonetheless, hotel investments in Yangon continue to surge as supported by the new government policies and programmes designed to boost the tourism and hospitality sector. Given that projects and investments are still mostly geared towards the upper-scale segment, Colliers continually encourages both developers and operators to venture into the untapped potential of the midscale category instead.


Demand is forecasted to eventually improve in the long term with strong interest coming especially from Asian tourists. Improving visa conditions for Westerners would most likely help.


The supply stock totaled to more than 5,330 rooms, up by 22% yoy. Developers remain in the process of delivering new upper-scale hotels, driving the room stock to surge in 2019.


Citywide occupancy improved given the limited entry of new completion. We expect the number to further decline given the sizeable stock anticipated in the next six months.


Colliers recorded an 8% yoy decline in average daily rate. We anticipate daily rates to settle at competitive levels as supply becomes substantial in the next two years.


For more than a decade, the number of upper-scale hotel rooms in Yangon stayed limited having had an unmoved supply stock. However, historic increases in foreign tourist arrivals over the past years have led to significant growth in revenues, consequently drawing the number of foreign invested projects to noticeably rise.

More recently, the industry, for its part, is undergoing a rebalancing scheme as Oxford Business Group coined it. Following a boom in hotel construction in 2012 and continued development of projects thereafter, many in the industry are facing low occupancy rates, especially given the downturn in the number of Western visitors. Despite low occupancy rates, investment continues to rise in anticipation of future growth. According to the Ministry of Hotels and Tourism (MoHT), there are 1,676 hotels and 67,350 rooms available across the country for tourists. In 2017 there were 33 completed foreign hotel and commercial projects, creating a further 6,241 rooms. Another 11 projects were under construction and 20 received permits to progress. Most of these investors were from Singapore, accounting for 32 of the projects, with 12 from Thailand and six from Japan. The majority of new hotel builds and new room additions have remained for 4 and 5-star hotels and are mostly situated in Yangon. Examples for which are Apple Tree’s Yangon Excelsior and Accor Group’s Grand Mercure Yangon Golden Empire, which both debuted in Q3 2018 and are considered the most recent developments in the city.

Figure 1: Yangon upper-scale hotel stock, (rooms)

Source: Colliers International

As depicted, dearth of new completions was observed as of Q4 2018. Some developments that were anticipated to start during the quarter have seen limited construction progress; hence, pushing back their completion to H1 2019. In turn, the aggregate supply stock closed the year with a total of more than 5,330 rooms, up by 22% yoy. Despite the recent market condition, developers remain in the process of delivering new upper-scale hotels, driving the room stock to surge in 2019 alone (See Figure 1). In fact, around 10 upper-scale hotel developments are scheduled to be unveiled within the three-year period, translating to approximately 2,040 new rooms. For the immediate year, we expect the entry of six new developments, with approximately 80% situated in the Inner City Zone (See Figure 2). Projects such as Times City by Crown Advanced Construction Cp., Ltd., Rosewood by Rosewood Hotels & Resorts, and Sheraton Yangon Hotel by Family Business Group Hotel Ltd., are some of the notable hotels expected in the area. Also in the supply pipeline is a Downtown development (Courtyard by Marriott) by Hotel Sule Square Co., Ltd., and Naing Group Capital Co., Ltd. By the end of 2019, we expect the annual new supply to reach a record high of nearly 1,025 rooms. Overall, Colliers estimates the total stock to expand with close to 500 new keys annually in the next three years.

Figure 2: Yangon upper-scale hotel stock by location, (rooms)

Source: Colliers International


The by-laws setting out rules and regulations for the tourism industry will soon be released in Q1 2019, as announced by U Ohn Maung, MoHT Minister last December 2018. After the Pyidaungsu Hluttaw (Lower House) passed the amended Myanmar Tourism Law in Q3 2018, the ministry was tasked with drafting the bylaws in consultation with stakeholders. Under the new law, approval for licenses is decentralised to state and regional governments, ensuring a more efficient system. The law creates regional tourism committees that will examine and manage licenses, and process building and hotel applications. By devolving authority, the new law empowers regional governments to promote their own tourism industries. A key component of the new law is to ensure that tourism conforms to international practices. While the 1993 law issued four kinds of licenses for hotels, tour operators, tour guides and tourist transport vehicles, the new bill adds a fifth open licence for “other tourism-related services”, which could allow for the recognition and regulation of alternative accommodation, such as homestays or bed and breakfasts. This addresses the demand for diverse options from tourists in an era when digital applications can match travelers directly with people renting out their homes or private accommodation.

Figure 3: Hotel G Yangon

Source: Hotel G Yangon Official Website(

While the declared legalities bode well in the market, operative measures must be set in place to further guide hoteliers and lure more guests and travelers. At the same time, given that investments in the high-end scale are likely to grow stronger in the coming years as anticipated by MoHT, Colliers continually emboldens investors to swerve towards the untapped mid-scale hotel category instead. While upper-scale hotel room stock appears robust, this has left a gap in the market for more affordable accommodation, which there is high demand for. If there is one segment that must capture the attention of hotel developers in 2019, it should be midscale hotels. Regionally, hotel brands are already taking advantage of the opportunity to deliver travelers the look, feel, and experience of a modern, luxurious lifestyle hotel in an affordable package. The 3-star Hotel G Yangon, for example, has proved successful despite opening in a challenging period in Q3 2017. It would be favourable if Yangon hoteliers and operators will adopt such concept. Developers wanting to offer renewed midscale experience can introduce and incorporate modern design aesthetics, improved technology for connected travelers, and reimagined communal spaces. Midscale hotels are also attractive from an investment angle. Compared to upscale and luxury hotels, midscale properties are relatively cheaper to develop and do not require large staffs to operate, at least with Yangon’s current market condition.


As of Q4 2018, the citywide occupancy rate managed to recover and is now back above the 40% mark (See Figure 4). This can be explained by the limited entry of new supply combined with the improvement in foreign arrival levels, specifically Asian tourists. While the average occupancy lingered on the same level as from last year, the number is still well below 2012-level which hovered between 70 and 80%.

Figure 4: Yangon upper-scale ADR & Occupancy Rate

Source: Colliers International

Meanwhile, the average daily rate settled at USD103, down by 8% yoy. The entry of more modern hotels could also exert further downhill pressure on the daily rates for older upper-scale developments; with newer ones likely to set rates at competitive levels. These adjustments in ADR are likely to continue especially as supply becomes substantial in H1 2019.

After years of rapid growth, the recent moderation provides an opportunity for the industry to consider how tourism can contribute further to the overall development objectives of the country. While the government has taken steps to improve infrastructure, more needs to be done to upgrade airports, roads and public transport to ease domestic travel and extend the length of stay for many tourists.

Essentially, the tourism and hospitality industry needs to ensure that it is generating demand at the same rate with supply to combat low hotel occupancy rates. While the new visa conditions promise further arrivals from key source markets in Asia, there is no easy solution to Westerners’ reluctance to visit during a time of conflict. Improving visa conditions for these visitors would most likely help, alongside renewed efforts in the West to promote the country’s wide-ranging tourist attractions. Specifically, commencing rigorous marketing campaigns targeted towards the reshaping of the country’s tourism identity should support this endeavor.

For more information, please contact:

Deputy Managing Director| Myanmar
+95 (0) 979 573 3378
[email protected]

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