Quarterly Business Magazine

Tourism

The Golden Land, the Next 'Promised Land' for Tourism?
Posted :

The first signs of Myanmar’s economic reforms were manifest in one industry – tourism.

Ever since hitting the one million mark in 2012, tourist arrivals have been growing; so much so that government officials are aiming to triple the figure to 3 million arrivals by 2015. It may appear an ambitious number at first glance, but a fortunate series of events are lined up to put the country in the global limelight. The World Economic Forum is in June, followed by the SEA Games in December, and two ASEAN Summits in 2014 during Myanmar’s tenure as Chair of ASEAN.

The tourism boom does not come without concerns. Many question whether the country has the capacity to accommodate the increased demand in hotel rooms, tourism services, flights, and in-country travel. Around 787 star rated hotels exist in Myanmar, a total of 28,291 rooms, with Yangon being home to 204 hotels with 8,915 rooms. Trailing behind Yangon are tourism hotspots Mandalay (79 hotels, 3,374 rooms) and Bagan (75 hotels, 2,196 rooms), and the capital Naypyidaw. With such a modest number of rooms, booking for accommodation can at times be a nightmare. But supply is racing to catch up with demand. Statistics from the Ministry of Hotels and Tourism indicate that over 6,700 rooms are to be added from 36 hotels and commercial complexes, coming solely from foreign investment – the total invested in the projects is US$ 1,416.92 million. New “hotel zones” are also underway, with current ones located in Yangon, Naypyidaw, Bagan, Mandalay, Bago, Rakhine, Taunggyi, Ngwe Saung, Chaungtha, Mawlamyaing, and the Golden Triangle. A more liberal foreign investment law is only likely to increase the number of hotels, with continued development in hospitality services.

Additionally, more air traffic has also expedited plans for the construction of a new international airport in Hanthawaddy near Bago, about 80 kilometers north of Yangon. Last year, foreign passengers took up around 60% of occupied seats in direct international flights to Yangon and Mandalay. Consequently, renowned carriers, the likes of Singapore Airlines, Qatar Airways, ANA of Japan, and Korean Air have all either started or resumed routes to Yangon, and Yangon International Airport is straining under full capacity. The once famous transit hub and Asian aviation destination of the 50s has not grown much since then and is currently struggling to accommodate arrivals every hour from 6am to midnight with its 5 gates and one runway.

Domestic travel, perhaps, is better facilitated. Notwithstanding isolated cases of air emergencies and minor delays, domestic flights can be relatively convenient if planned and booked in advance. Local air lines such as Yangon Airways, Air KBZ, Air Bagan, Asian Wings, and Air Mandalay have also begun competing for the lowest prices, though it is still a long way to budget air travel. But demand is certainly putting the pressure on the competition. Myanmar's only international airline, Myanmar Airways International, is now in code sharing agreements with Korean Air and Australian budget airline Jetstar.

Tourism services are also on the rise. The record number of tourists may soon be accompanied by a record number of tour guides. A total of 110 trainees are on the latest roster for the 2-month long basic course for tour guides conducted by the Ministry of Hotels and Tourism. Fresh graduates with foreign language degrees are finding it easier to seek employment. There were 3,353 licensed tour guides listed in the Ministry statistics in 2012. English speaking guides lead the pack, followed by Japanese, French, and German. Doubtless, the figure will be much higher this year.

According to Ministry statistics, a total of 1,026 licensed tour companies were in operation in 2012, with 1,008 of them being local and the rest either foreign owned or joint-ventures. Small and medium sized tour agencies are emerging and battling to offer the best tour package deals. Local companies are also profiting from increased domestic travel in tourism; distributors are importing more coach buses and cars – Scania buses full of tourists are ubiquitous. A Yangon day-tour company, Journeys Nature and Culture Exploration is set on a joint-venture with globally known PEAK International Travel, a subsidiary of TUI AG, the world's largest travel and tourism multinational which is also listed on the Frankfurt Stock Exchange.

But can Myanmar truly live up to its tourism potential? The 1 million plus tourist arrivals for the Golden Land pale in comparison to the 25 million that neighboring Thailand is expected to receive this year, a number that will earn the kingdom more than US$ 38 billion in revenue. Continued success in Myanmar's tourism industry is dependent on improvement in three areas: financial transactions, communications, and security.

Annual Revenue from Tourism

"Inconvenient" would be an understatement, when US dollars brought into the country has to be in the form of crisp, almost brand new 100 dollar bills. Yet tourists still have to carry unscratched high-denomination notes for currency exchange. But the financial system is changing. The US dollar was declared "legal" for use in the country just over a year ago and 18 private banks are now authorized to trade in foreign currency. Western Union is setting up branches for wire transfers and Visa, Mastercard, Japan Credit Bureau (JCB), and China Union Pay (CUP) are rapidly signing deals with local banks. ATMs have been installed in and around banks, commercial complexes, and major retail outlets. Credit cards are still rare and the use of debit cards remains mostly limited to cash withdrawals from ATMs, but that is changing fast. Myanmar Payment Union (MPU), a network of 20 domestic banks, has signed agreements to allow JCB and CUP bank cards to allow cash withdrawals at ATMs in the country. By 2014, MPU card holders will in turn be able to swipe their plastics in foreign countries.

Improvement in financial transaction methods is also accompanied by development in communications. SIM cards that used to cost around US$ 1,500 now cost around US$ 100. Recently, low-cost SIM cards were introduced via a lucky draw for as little as 1,500 kyats – less than US$ 2. Two new joint-ventures between local and foreign telecoms companies are also set on providing affordable cell phones. Internet access is more widely available and network providers are speeding up 3G connections. Phone lines have less static and overseas calls can now be made via VoIP. Continued progress in telecommunications is crucial for tourists to remain on the grid while traveling within Myanmar, both to stay connected to their lives back home and for security reasons.

Security is a priority for any traveler in a foreign land. In response to the increasing number of tourists, the Ministry of Hotels and Tourism established a help hotline for tourists. Compared to other countries in the region, Myanmar is considered a very safe place for foreigners. The concern lies more in keeping locals, especially children and the underprivileged, safe from abuse and exploitation. The government, private sector, and civil society are all fully aware of the dangers that often accompany tourism booms, and learning from mistakes of fellow ASEAN members Thailand and Cambodia, have been quick to advocate "responsible tourism". Those involved in the tourism industry know for a fact that business cannot thrive without a safe environment. Recently, a company called Myanmar Polestar became the first travel and tour company in Myanmar to join The Code of Conduct for the Protection of Children from Sexual Exploitation in Travel and Tourism. Such precedent should be welcomed and swiftly imitated by the rest of the industry.

The US$ 534 million tourism revenue earned in 2012 will continue to grow, but only parallel to the development in hotels, tourism services, domestic and international transportation, financial system, telecommunications, and security. Myanmar's very first Tourism Master Plan, drafted with assistance from the Asian Development Bank and the Norwegian government, will be unveiled at the World Economic Forum to be held in Naypyidaw in June. The goal for 3 million visitors by 2015 will likely be reached, but it remains to be seen whether Myanmar will live up to the hype as the destination for tourism in Asia.

Tourists to Myanmar


 

Powered by Drupal