Foreign Property News | Posted by Aye Myat Thu
Foreign investment in Myanmar hotels since 1990 has reached $4.4bn, according to recent data published by the Ministry of Hotel and Tourism and anaylsed by the Myanmar Real Estate & Construction Monitor.
As of March, the ministry had granted permits for 68 hotels totaling around 13,000 rooms by foreign investors since 1990, an official told Myanmar Real Estate & Construction Monitor.
Some $600m, or 13.6%, of total foreign investment in hotels appears to have come since December 2017, indicating that investment inflow has been heavier more recently.
Hotel investment has seen strong inflows from other Southeast and East Asian countries, particularly Singapore, Thailand, Vietnam, Japan, Hong Kong and Korea.
Singapore has shown by far the most interest, contributing approximately 60% of overall FDI invested in the hotel industry, and the full breakdown by country can be found below:
* Singapore: $2.8bn for 34 hotels
* Thailand: $498m for 13 hotels
* Vietnam: $440m for one hotel
* Japan: $394m for six hotels
* Hong Kong: $188m for five hotels
* South Korea: $100m for one hotel
* Malaysia: $23m for three hotels
* UK: $14.5m for three hotels
* Luxembourg: $6.7m for one hotel
* Switzerland: $0.3m for one hotel
The official added that, as of December, the ministry had granted business licenses to 1,704 hotels and motels by local developers across Myanmar, totaling 68,167 rooms. Up to date statistics will be provided on the ministry’s website shortly, he said.
Myanmar Real Estate & Construction Monitor notes that since December 2017, the number of hotels that received a licence to operate increased by around 6%.
Hotels were mainly permitted in the following major touristic destinations:
* 404 hotels with 21,147 rooms in Yangon
* 219 hotels with 9,073 rooms in Mandalay
* 145 hotels with 4,606 rooms in Taunggyi and Inle
* 85 hotels with 3,019 rooms in Bagan and Nyaungoo
As of March, Myanmar citizen nvestments in hotel and tourism services had amounted to $778m since 1988, a sum significantly lower than the almost $3.1bn in foreign investment permitted by the Myanmar Investment Commission (MIC) over the same period.
Myanmar citizen investors fled from real estate investments in 2018, instead flocking to real estate and tourism, according to data from the Directorate of Investment and Company Administration (DICA).
While 2017 had been a record year in terms of approvals for local investment in real estate, 2018 was certainly not, with only eight projects worth a total of $28m approved during the calendar year.
In comparison, a total of 10 projects worth $471m were approved in the 2017 calendar year, a record.
Interest was low in real estate developments by local businesspeople, likely as a result of the sector's recent poor performance. Hotels and tourism, however, saw a significant amount of interest, particularly when considering the market for hotels has also been strong in recent years.
A total of 43 hotel and tourism projects were approved in 2018, worth a total of $83m.
In the initial period after economic liberalisation in 2011-12, Myanmar experienced a surge in foreign investment and interest in the hospitality sector, with a parallel jump in overseas visitor numbers.
Since then, a series of major international hotel operators have entered the market, including Accor, Hilton, Best Western, Shangri La, and Dusit International.
More recently, Anadacura Hotels and Resorts, part of the Mai-BS Hospitality group, based in Bangkok, signed an agreement with a local tourism agency to operate a hotel in Shan’s popular Taunggyi Township.
A sizeable future pipeline of new stock, particularly at the higher end of the market, is evident.
Emerging Towns & Cities Singapore is planning a five-star 300-key hotel as a component of its large-scale mixed-use Golden City, while Japanese building company Taisei is building Peninsula, the luxury 92-key hotel component of the major mixed-use Yoma Central development.
Noteworthy recent completions include the Melia-operated 430-key hotel at the HAGL Myanmar Centre, while South Korean giant Lotte is managing the 343-key Lotte Hotel under a deal with Daeweoo Amara.
Furthermore, a rating system for hotels is under planning in the country, Ministry of Hotels and Tourism director U Naing Win told the press in March. The system will be endorsed by the World Tourism Organisation, and will be based on a star system at the regional level.
The system is meant to incentivise hotel businesses to improve their services and features and to align Myanmar hospitality to international star rating standards.
Credit: Myanmar Real Estate
