Northstar

TRAVEL WEEKLY ASIA O F F I C I A L D A I L I E S www.travelweekly-asia.com 16 27 October 2017 YANGON'S SUPPLY BOOM Contibuted by Georgienne Lee, Consultant, Horwath HTL Singapore For more information, contact Howarth HTL Singapore at: glee@horwathhtl.com +65 6735 1886 With several new infrastructural plans being implemented to support urbanisation of the city, the Yangon tourism sector is expected to grow in the mid- to long-term. In 2016, Yangon accounted for approximately 37 percent of all visitor entries into Myanmar. The city not only serves as a business hub but also a popular destination for leisure travellers and religious tourism. In the past two years, there has been a relatively large increase in non-government organisations in Yangon. Writer's Picks: IN Entrance of international brands Continued efforts to improve overall infrastructure Increasing direct air accessibility Positive outlook for the long term OUT Current oversupply and price war Market undergoing correction Reduced investor confidence due to cost of risk Current supply growth outstripping demand growth. Hotels need to remain highly competitive. From 2011 to 2013, the opening up of Myanmar resulted in potential investors flocking to Yangon to assess the market. Corporate demand in hotels experienced positive growth and with minimal supply increases then, occupancy reached a five-year high of about 67 percent in 2013. However, investor interest started to dip in 2015 upon realisation that the cost of risk is high in Yangon with increasing real estate prices. This resulted in Since the transition into a democratic government in 2011, Myanmar has opened its doors to tourism. Yangon remains the most used entry point into the country and thus has a significant influence on the overall tourism performance in Myanmar. a negative growth of 7.5 percent in demand for hotels in 2015 YoY as corporate travellers started to pull out of the market. Furthermore, the double-digit growth in supply from 2015 did not help the cause. Despite renewed confidence in 2016 where hotel demand saw a growth of about 16 percent YoY, the increase in supply was too large to overcome. Competitive Hotel Market Historical Performance Nationality Mix, 2016 SEA dominates the market Southeast Asia was the main feeder market for Yangon in 2016 on the back of higher flight accessibility and relative proximity compared to Europe and the Americas. Majority of the international flights into Yangon are from Southeast Asia. 12 airlines operate the route between Thailand and Yangon, which translated into 19 percent of total international visitors arriving from Thailand in 2016.

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