Fear­ing over­sat­u­ra­tion, govt puts hold on new ho­tels

The Min­istry of Ho­tels and Tourism has clar­i­fied that the govern­ment is en­forc­ing a tem­po­rary halt on new ho­tel pro­jects in ar­eas deemed to be suf­fer­ing from over­sup­ply.

The Myanmar Times - - Front Page - – Trans­la­tion by Zar Zar Soe

IN light of an ac­com­mo­da­tion sup­ply glut in sev­eral of the coun­try’s tourism hotspots, the govern­ment has an­nounced a tem­po­rary sus­pen­sion of new ho­tel de­vel­op­ments in some of Myan­mar’s most pop­u­lar vis­i­tor ar­eas.

Seek­ing to clar­ify lo­cal me­dia re­ports this week of a blan­ket ban on new ho­tel con­struc­tion in a hand­ful of key re­gions, the Min­istry of Ho­tels and Tourism held a press con­fer­ence on Septem­ber 20 an­nounc­ing that it was ap­ply­ing tighter con­trols on new devel­op­ment re­quests from lo­cal in­vestors in ar­eas they said al­ready had an over­sup­ply.

“From Oc­to­ber 30, 2016, we won’t just hand out ho­tel per­mits any­more in ar­eas that are al­ready con­gested,” U Ohn Maung, the min­is­ter for ho­tels and tourism, said.

“We will al­low the con­struc­tion of new ho­tels in places where there is more de­mand, like in Chin, Kayin and Kayah states,” he said.

A re­cent study by the min­istry found that av­er­age oc­cu­pancy rates were just 54 per­cent in Yan­gon, 51pc in Man­dalay, 28pc in Nyang Shwe and 18pc in Kalaw. Some lo­cal in­vestors have loans from banks at 13pc in­ter­est rate, U Ohn Maung said. “That’s why we need to look at de­mand and sup­ply, so that do­mes­tic en­trepreneurs, as well as for­eign in­vestors, in the tourism in­dus­try can get a re­turn on in­vest­ment.”

Un­der the new direc­tive, ap­pli­ca­tions would be re­viewed by re­gional gov­ern­ments, who would then make a pro­posal to the Min­istry of Ho­tels and Tourism for fi­nal ap­proval, he said, ad­ding that de­ci­sions would be made with an un­der­stand­ing of mar­ket needs.

“We are not re­strict­ing all ar­eas for ho­tel con­struc­tion. They will be granted in ar­eas where there is tourist de­mand,” U Ohn Maung said.

In­dus­try bod­ies, who joined govern­ment of­fi­cials at the press con­fer­ence, said that even with in­ter­na­tional tourist num­bers in­creas­ing by 50pc each year, there was still an over­sup­ply of lodg­ing on the mar­ket.

“We have no con­cerns with room prices, which have al­ready come down, even at some well-known five star ho­tels’ said U Yan Win, chair of the Myan­mar Tourism Fed­er­a­tion.

But more plan­ning is re­quired to en­cour­age con­struc­tion in ar­eas of higher de­mand, he said.

The news was echoed by of­fi­cials in Man­dalay, who at­tempted to al­lay any ner­vous­ness in the in­dus­try.

“Our min­istry needs to work with hote­liers, tour com­pa­nies and tour guides through ne­go­ti­a­tion,” said U San Yu, deputy di­rec­tor of the Min­istry of Ho­tels and Tourism for Man­dalay Re­gion. “There is an in­crease in rooms but guest num­bers are still low, so some ho­tels can’t pro­vide good ser­vices, and if ho­tel ser­vices are poor, it may cause an in­con­ve­nience for guests,” he said.

The in­dus­try would ben­e­fit from more care­fully planned devel­op­ment, he said.

“There are al­ready enough ho­tel rooms in Inle and Taung­gyi, but short­ages re­main in other ar­eas,” he said. “Be­cause there are too many rooms on the mar­ket, ho­tels don’t get the cus­tomers they ex­pected.”

Min­istry of­fi­cials said the new direc­tive would not af­fect any per­mits al­ready ap­proved.

Photo: Staff

A worker at a con­struc­tion site in Yan­gon un­rolls ca­ble.

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