The hotel market in Yangon is set to continue its record growth in 2014, following a 46 percent y-o-y increase in international visitor arrivals in 2013, according to the latest report from property management company JLL. Their findings indicate that occupancy for the upscale and luxury segments increased from 45.8 percent in 2009 to a record 80 percent in 2013.
The strong demand for international standard accommodation, which is predominantly driven by visitors from Thailand, Japan, China and Korea, is currently outpacing supply with less than a third of Yangon’s 9163 rooms considered to fit the criteria of International Standard. Despite this, there are signs that the imbalance is being addressed with 4,518 rooms expected to enter the market in the next five years, of which 95 percent will be international standard – more than doubling the supply in Yangon.
Andrew Langdon, Executive Vice President, Thailand and Indochina, JLL’s Hotels & Hospitality Group.
Andrew Langdon, Executive Vice President, Thailand and Indochina, JLL’s Hotels & Hospitality Group commented, “Ever since Myanmar embarked on its journey to democracy in 2011, Yangon has seen an incredible improvement in hotel market performance as demand continues to outpace supply. Over the past 12 months we’ve seen a number of International hotel operators, including Accor and Hilton, take advantage of these conditions with key projects slated to open later in the year.”
Along with the sharp rise for occupancy in upscale hotels, the RevPar also dramatically increased, growing more than 7 times to USD 126 over the past five years. Due to the increase of supply planned for 2014, occupancy is set to remain stable at 80 percent throughout the year, while ADR is forecast to be USD 173, up 10 percent from 2013.
Mr Langdon continued, “Recently unveiled plans from the Asia Development Bank coupled with the expansion of the existing international airport and the opening of a new airport near the city in 2018, means we don’t expect any let up in the growth of tourist arrivals to Yangon. With the majority of future supply concentrated towards upscale and luxury, this presents a strong opportunity for the mid-scale brands where the market remains relatively untapped.
“Looking beyond 2014, we expect occupancy to stabilise at current levels while a continued increase in supply will see the ADR start to moderate. The future remains bright for the Myanmar hotel market and opportunities await for investors and operators who are willing to take them,” he concluded.
The first Hilton Hotel in Myanmar is slated to open in Yangon later this year.