The images of the “new” Myanmar are quickly crowding out memories of a country that just a few years ago was known as xenophobic and restrictive. For many travellers, especially in Western countries, visiting Myanmar was the height of political incorrectness. But the same place that limited visas and travel for decades is rebranding itself as the soul of hospitality.
Statistics from the Ministry of Hotels and Tourism showed that in 2013, the number of foreign visitors who arrived in Myanmar reached 2.04 million, almost double the 1.06 million who came the year before. Skyrocketing hotel prices illustrate the still severe shortcomings as the country’s hospitality industry tries to cope with its status as one of the planet’s hottest new destinations.
Moreover, growing problems of land grabbing and speculation pose a big threat to the industry. Tourism experts say the country needs to take a crash course in how to develop and market its tourism products.
“The main problem here is the high rents. Everyone who is keen to invest and operate a business in the country is strongly affected,” said Suphachok Hongpu, the director of Nemita Spa, who has expanded his business to more than 10 branches throughout the country.
“Therefore the prices of the services offered to customers or tourists would be unavoidably expensive. This presents a great challenge for small and medium tourism-related businesses to start up and become profitable.”
Mr Suphachok told Asia Focus that pricing plays a big role in Myanmar’s tourism and hospitality business, especially for regional visitors.
“Because of the fact that it is very near to everywhere in Asia, people within the region will not be willing to pay as much. Many perceive it to be unreasonably expensive and would rather wait for the prices to adjust before coming here.”
Over the past few years, many hotels have raised their prices to be double or triple the original rates in response to the ever-increasing demand. Nevertheless, in many cases the standard of the services is still not up to the mark, compared to the premium prices being paid out of customers’ pockets.
Infrastructure development, particularly domestic aviation, is something that Mr Suphachok says Myanmar also needs to accelerate. Delays can be a big hindrance for travellers who have already planned their travel itineraries ahead of time.
His view is supported by Bill Barnett, managing director of C9 Hotelworks, a Phuket-based asset management and hospitality company serving the entire Asia Pacific region. He said there had been a lot of speculation on land in Myanmar, which is definitely not healthy for the market.
“The case of land value is a big thing. When you have expensive land, it is hard to invest a lot more,” he said. “A lack of capital is being seen. Investors need to attract venture capital and you can see that many of the projects offer mixed uses, where you have residential, hotel, retail and everything else in order to stay profitable.”
Mr Barnett called the fast-growing tourist arrivals to Myanmar a response to pent-up demand, adding that people want to come to the country to see what it is really like after years of hesitation. However, the challenge is how Myanmar can develop a tourism sector that is sustainable in the long run.
Singapore is an excellent case study in his view, since it manages to draw big numbers of visitors year after year, despite not having many natural attractions. Events such as Formula 1, big concerts or other festive activities are good marketing tools. Understanding international tourists’ behaviour and knowing how to create more demand for second-time visitors are crucial.
“It is like a book, where you always want to see the last page. People want to have an authentic experience,” said Mr Barnett. “However, going forward Myanmar needs to create demand generators. They need to develop arts, culture, big events and festivals, so people will keep coming back. Destination marketing is very important.”
Martin Craigs, the CEO of the Bangkok-based Pacific Asia Travel Association (Pata) expressed his concern that any businesses that grow at the rate of Myanmar’s tourism industry face the risk of not being sustainable. The result can be damage to the country’s culture, history, natural attractions and charm. It should not get stuck in the mode of bringing the vast majority of tourism traffic through Yangon, but instead should distribute the development to other areas at the same pace.
“Myanmar should develop airport infrastructure in Mandalay and Bagan so that Asian tourists can come directly to those destinations. Having Yangon as the centre of tourism would create unbalanced development for the industry,” Mr Craigs said.
In his view, Bagan is one of the most interesting destinations with great potential to develop further, with similar characteristics as the famous Unesco World Heritage sites such as Angkor Wat in Cambodia and Luang Prabang in Laos.
However, people in Myanmar’s tourism and travel business need to be aware that it will take quite some time for the country to be mature and build up all the amenities and resources.
“Taking Thailand as an example, now it is the leader in large-scale tourism and it is considered to be highly complicated market,” he explained. “You need to have good airline infrastructure, good ground services, great hotels, well-trained tour guides and everything. They have been doing it for 20 years but if Myanmar wants to achieve the same goal in within five years, it will not be easy.”
Training people is essential for the hospitality sector, especially at the present time when tourism development is still at its early stage and the demand for personnel is on the rise. Pata is pioneering a human capital development programme, focusing on getting local “rising stars” who have at least five years of experience from all parts of the travel chain, bringing them to Bangkok to be trained by professionals.
“A 360-degree view of how the industry is so interdependent and interconnected is very important and the next generation in the travel industry should be more aware of this,” he added. “There are a lot of people in the business who still have a silo mentality.”
He explained that airlines, hotels, bus services, tour guides and everyone in the chain needs to understand how they should beach should be concerned about the other. Because of the interconnectedness, if some mistakes occur anywhere in the chain, everybody will be affected and tourists will not come back again.
“Creating demand for repeat travellers is significant,” said Mr Craigs. “In Singapore, typical second-time visitors spend 35% more per day than first-time visitors because they enjoyed the first-time experience and now they know how to do it and decide to come back. Myanmar, as well, needs to work on this.”
source: Bangkok Post