In the last five years, travellers and the tourism trade complaint that the boom of tourism in Myanmar was not accompanied by a quantitative and qualitative increase in hotel supply. Mediocre quality, high prices turned Yangon to one of the most expensive cities to stay. Since 2015, rates are down as a flux of new hotel accommodation opened in the former Burmese capital.
In a report published last year, Colliers International indicates that Yangon’s upper-scale hotel supply stock increased by over 1,200 rooms last year, the highest annual addition recorded to date. In just a year time, supply was up by 55%. Last year, branded hotels such as Novotel Yangon Max and Sedona Hotel either opened or expanded their operations while independent first class properties such as the Rose Garden or the Jasmine Palace Hotel came into the market. According to Colliers, 2016 and the three following years will see at least 1,000 new rooms opening on average each year. In total, Yangon records a total of 16 upper-scale hotel projects.
Most of the new or expanded properties will be located within Yangon core districts, in the historical city centre, with many brands being represented in the country’s largest metropolis. Among the newcomers are Centre Point Grand, Sheraton Yangon Hotel, Melia Hotel, Lakeside Shangri-La, Pan Pacific, Wyndham or Summit Park.
Among the top luxury hotels are the planned opening of a Kempinski Hotel and a Peninsula Hotel. The Kempinski Yangon is due to open in 2017 with 239 rooms. It will be located along the prestigious Strand Road and has taken over the colonial-era former Police Commissioner’s Office with its distinctive facade punctuated by columns. The other prestige project in the former capital is a Peninsula Hotel property located in the former headquarters of Burma Railways. The 19th century structure is a heritage-listed property and is due to host the fiv e-star property in a prime downtown area. However, the project has been stalled for two years and started only this year. It might be able to open to the public by 2018.
With the number of new hotels opening, occupancy is sharply down for upper-scale hotels. Colliers noticed that occupancy -which stood at 81% in 4th quarter 2012 declined to 55% a the end of last year and will further weaken to 52% this year. However, mid-scale hotels fared better with an average occupancy rate of 78%. the majority of the upper-scale hotels had to lower their room rates, resulting in to an average daily rate of US$151 at the end of 2015, down by 17% compared to the same period of 2014.