Hotel sector booming in Yangon

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Trader’s Hotel in Yangon, one of the few hotels providing international standard

A 45 per cent surge in visitor arrivals in the September 2011 to 2012 period has boosted the hotel sector in Myanmar’s business capital Yangon, with room supply expected to grow by 36.7 per cent annually, according to a report by Jones Lang LaSalle.

This trend entails a tremendous opportunity for investors, the report suggested. There are currently about 8,000 hotel rooms in Yangon, of which only 1,500 to 2,500 are of international standard. This combined with the rising influx of business visitors has caused average daily rates to grow by 350 per cent from 2007 to 2012.

Furthermore, international hotel brands account for just under 20 per cent of hotel room supply in Yangon.

However, even if international hotel supply was to triple over the next few years, the Yangon market “still offers plenty of opportunities for early movers, given the severe lack of current capacity”, Jones Lang LaSalle senior vice president Andrew Langdon said in the report.

Myanmar’s new foreign investment law now allows businesses to be 100 per cent foreign-owned, and the government offers five-year income tax exemptions and 50-year land leases, with the option for further extensions, which is a strong incentive for hotel investors.

On the other hand, challenges in the short- to medium-term include the lack of consistent power generation and a skilled labour pool. Land acquisition also remains difficult, and sources of funding opaque, the report pointed out.

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Reading Time: 1 minute

Trader’s Hotel in Yangon, one of the few hotels providing international standard

A 45 per cent surge in visitor arrivals in the September 2011 to 2012 period has boosted the hotel sector in Myanmar’s business capital Yangon, with room supply expected to grow by 36.7 per cent annually, according to a report by Jones Lang LaSalle.

Reading Time: 1 minute

Trader’s Hotel in Yangon, one of the few hotels providing international standard

A 45 per cent surge in visitor arrivals in the September 2011 to 2012 period has boosted the hotel sector in Myanmar’s business capital Yangon, with room supply expected to grow by 36.7 per cent annually, according to a report by Jones Lang LaSalle.

This trend entails a tremendous opportunity for investors, the report suggested. There are currently about 8,000 hotel rooms in Yangon, of which only 1,500 to 2,500 are of international standard. This combined with the rising influx of business visitors has caused average daily rates to grow by 350 per cent from 2007 to 2012.

Furthermore, international hotel brands account for just under 20 per cent of hotel room supply in Yangon.

However, even if international hotel supply was to triple over the next few years, the Yangon market “still offers plenty of opportunities for early movers, given the severe lack of current capacity”, Jones Lang LaSalle senior vice president Andrew Langdon said in the report.

Myanmar’s new foreign investment law now allows businesses to be 100 per cent foreign-owned, and the government offers five-year income tax exemptions and 50-year land leases, with the option for further extensions, which is a strong incentive for hotel investors.

On the other hand, challenges in the short- to medium-term include the lack of consistent power generation and a skilled labour pool. Land acquisition also remains difficult, and sources of funding opaque, the report pointed out.

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