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Myanmar COVID-19 Brief Part 6: Hotels & Tourism Sector

Myanmar COVID-19 Property Sector Brief


For our fourth sector brief SPS looks at how COVID-19 has impacted hotels and tourism in Myanmar. The brief begins by providing a market overview of the hotels and tourism sector prior to COVID-19’s outbreak in January. The brief will then move on to explain how the pandemic has impacted tourism in Myanmar before explaining some of the measures that have been introduced by the government to minimise damage to the sector. The brief will then conclude by exploring the future outlook of tourism in Myanmar following COVID-19.

Executive Summary

  • With tourist numbers increasing, 2020 looked set to be a strong year for tourism in Myanmar, however COVID-19 and the international lockdown quickly saw arrival numbers plummet.
  • Travel restrictions into and within Myanmar meant that many hotels were forced to temporarily, and in some cases permanently, close their doors.
  • As a result, SPS has been contacted by several asset owners looking to dispose their assets. As lockdown restrictions have started to ease, a number of hotels have started to operate once again, however, many across the country remain closed for the foreseeable future.
  • The COVID-19 Economic Relief Plan includes measures that have provided much needed support to businesses in the tourism sector.
  • The introduction of the COVID-19 Tourism Relief Plan sets out a three-stage recovery process for the tourism industry in Myanmar.
  • Tourism in Myanmar looks set to remain under pressure for the remainder of 2020.
  • Myanmar is well positioned to take advantage of demand for international travel once the COVID-19 threat passes.

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Market Overview

Myanmar’s hotels and tourism sector has gone through somewhat of a turbulent time in recent years. With demand reaching astronomical heights in 2014/15 the sector looked set to grow exponentially in the years following. The expected growth has meant that developers rushed to build hotels across the country. As the graph below displays, the total number of hotel, motel and guesthouse rooms increased by around 129% between 2013 and 2019 from 34,834 to 79,855 keys. According to the Ministry of Hotels and Tourism (MoHT) this enormous amount of supply growth has largely been concentrated in just a few key locations. In 2019 Yangon, Mandalay and Nay Pyi Taw accounted for 51% of these rooms and a sizable 30% of total rooms were located in Yangon alone. However, this huge increase in supply was not met with the expected demand as Myanmar suffered a public relations crisis on the international stage and total arrival numbers fell by 38% between 2015 and 2016. The combination of these two factors has meant that in recent years Myanmar’s tourism sector has had to deal with the issue of massive oversupply of hotels.

Slowly but surely since 2016, the total number of arrivals has been increasing to a point in 2019 where total arrivals were just 7% less than the highest point in 2015. However, it should be noted that the demographic of these visitors has shifted significantly. Between 2018 and 2019 the number of Chinese visitors increased by 152%, which saw their share of total visitors increase from 8% to 17% in just one year. As Chinese visitors tend to have a very different spending pattern to that of Western tourists, who visited Myanmar in reduced numbers following 2016, the average daily expenditure of tourists had fallen from US$ 171 in 2015 to US$ 108 in 2019. This is likely due to the popularity of Chinese package holidays that have been dubbed ‘zero-dollar tourism’ and have widely been viewed to have little economic benefit for Myanmar.

With that being said industry leaders felt that tourism in Myanmar was genuinely on the up and 2020 was poised to be a strong year. Baptiste Dauvergne, Director of Sales at Abercrombie & Kent Southeast Asia, told SPS “2019 had started to look better than previous years and 2020 was set to be a really good year for tourism in Myanmar and the wider region.” He continued “In the first two or three months of 2020 we were expecting to exceed our sales revenue from the whole of 2018.” However, as COVID-19 started to emerge in China and spread across the world it became increasingly clear that Myanmar’s tourism Sector would be hit hard.

Covid-19 Impact

Tourism in Myanmar was almost immediately affected by COVID-19 as the virus spread through China, a market that Myanmar has become “increasingly dependent on” according to Tim Buma, Director at Sanctuary Retreats. It was only towards the end of January 2020 when the threat of COVID-19 caused real international concern for travelers. This can be seen in the graph below where visitor arrivals at Yangon International Airport between January 2019 and January 2020 actually increased by around 14%. However, this year-on-year increase was short lived as international restrictions on travel came into effect in February and March and visitor numbers began to rapidly decline. In 2020, April has so far proven to be the quietest month for arrivals at Yangon International Airport, with just eighty-two individuals arriving throughout the entire month. This came as a result of the government enforced ban on commercial flights in and out of Myanmar. May saw a slight uptick with one hundred and seventytwo arrivals, however this figure dwarfs in comparison to the 96,047 visitors that arrived in May 2019.

With tourist arrivals completely drying up towards the end of March and a governmentimposed lockdown looming, many hotels and tour operators across Myanmar were forced to close their doors. According to Hasitha Manthriratne, Hotel Manager at Park Royal Nay Pyi Taw, “hotels with long-stay guests” were the only ones that could continue to operate; however, this was only with the “minimal amount of internal associates.” In Yangon this has seen hotels such as, The Rosewood, Excelsior, Strand and Savoy temporarily close, however, Tim Reus, General Manager at Savoy, told SPS, “Savoy reopened for F&B on May 25th and we’ve been pleasantly surprised by the reception we’ve received from our clients.” Reus continued “we’re exceptionally grateful to our customers and regulars and we are now accepting any Myanmar residents from June 12th onwards, thus reopening the hotel.” However, it should be noted that due to COVID-19 some hotels will struggle to reopen at all. As a result, SPS have been contacted by a number of hotel owners looking to dispose their assets.

Although COVID-19 has been hugely damaging for hotels and tourism across Myanmar, it is perhaps a slight relief that the crisis struck towards the end of the high season. As a result, whilst some hotels in Yangon and other high priority sites may choose to reopen and take advantage of pent up domestic demand, those properties in more seasonal areas such as Ngapali and the Mergui Archipelago will likely remain closed for the remainder of the rainy season.

Government Response

The COVID-19 Economic Relief Plan (CERP), released on April 27th, was quick to highlight how the MoHT would support tourism related businesses through this crisis. The CERP outlined low interest loans, tax breaks and an array of other measures that were aimed at reducing the damage on the tourism sector as much as possible. These actions lead many in the sector to praise the MoHT for acting swiftly and decisively in support of tourism related businesses. Tim Buma, Director at Sanctuary Retreats, told SPS “the MoHT have been very lenient on some of the hotels in Yangon by providing large lease breaks on government owned land. This would have allowed the hotels to keep as many of their staff on the payroll as possible so I’m happy to say the MoHT has been proactive in helping some of the players in tourism.”

Just last week the MoHT followed this up by releasing the COVID-19 Tourism Relief Plan (CTRP), which has also been supported by other organisations such as the Ministry of Health and Sport (MoHS) and Myanmar Tourism Federation (MTF). The CTRP outlines a three-stage roadmap from April 2020 to January 2021 and is aimed at rebuilding Myanmar’s tourism sector.

The first stage has already been implemented from April to June and included actions such as; relaxation of taxes, waive licence fees and lease fees for hotels and tourism businesses. This stage also included stimulus packages such as guaranteeing “50% of new loans made by banks to Myanmar enterprises.” Furthermore, this stage looked to ease the impact on tourism professionals and staff by providing a variety of free online training seminars and classes to those employed in the industry.

The second stage, which focuses on reopening tourism in Myanmar, will run from June to August. This stage will focus on encouraging domestic tourism as well as working with regional partners such as Laos, Cambodia and Vietnam to boost tourism in Myanmar. The MoHT are hoping to achieve this by promoting “COVID-19 free destinations” and building traveler trust by providing regular updates on the situation and health and safety guidelines. The third stage, which will run from August to January 2021, will focus on relaunching international tourism in Myanmar. This will include the relaxation on visas and travel restrictions, as well as incentive programs that will look to boost investment in the tourism sector. According to the CTRP, one such incentive will be a “tax holiday for new investments in [the] tourism sector.”

However, at the time of writing this article Myanmar remains closed to foreign tourists and the international flight ban has been extended from June 15th to June 30th. Until such restrictions are lifted, the tourism sector in Myanmar will have to rely on the domestic market.

Future Outlook

Over the coming months, as restrictions on international travel remain in place, hotel and tour operators in Myanmar will need to adjust their business models to focus on the domestic and regional markets. A number of companies have already done this by offering flash sales and prepaid specials for bookings scheduled at a later date. One such company that has been offering flash sales across all five of their hotels in Myanmar is Memories Group. Yan Naing Soe, Director of CEO Office at Memories Group told SPS that “there are domestic customers that are desperate to travel and so this is the market we will initially target.” Yan Naing Soe continued; “I think that international tourism is going to be slow to return to Myanmar. We don’t expect the European and US market to pick up until next year. So, for the remainder of this year we will mainly be focusing on the local and regional markets.”

Although the remainder of 2020 is likely to be quiet for many hotels across Myanmar, there is a sense amongst those working in the sector that Myanmar could see a significant increase in demand after the COVID-19 storm passes. Tim Buma, Director at Sanctuary Retreats, told SPS that “following COVID-19 it’s likely that people will be looking for low density, ‘off the beaten track’ destinations and Myanmar is perfectly positioned to take advantage of that.” Buma continued, that “after COVID-19 passes, mass tourism destinations, such as Phuket, will struggle to make up the viable number of arrivals required, whereas Myanmar could benefit from being a smaller market and bounce back more easily.” The idea that Myanmar could become an increasingly popular destination was further supported by Forbes, who list Myanmar as one of the seven countries that have the potential “to become major tourist destinations in a post-COVID world.”

There are those in the tourism industry that believe this current period provides an opportunity for investors and developers that have the means to take advantage of the uncertainty. Grigorios Ntarlantanis, Managing Director at Lagom Advice, a hospitality management and consultancy company based in Yangon, told SPS that “individuals with access to capital and an interest in tourism in Myanmar should be looking to start projects now so that they can take advantage of increased demand in two or three years’ time.” Furthermore, the introduction of the CTRP means that investors could enjoy tax breaks among over incentives if they choose to proceed with tourism related developments in the coming months.

In Yangon, up-scale developments such as The Okura Prestige at Ycomplex and The Courtyard by Marriott are still due for completion in the second half of this year. The completion of these developments will see five hundred and ninety keys added to the Downtown Yangon market. Upscale hotels in Downtown Yangon will have to deal with further competition in 2022 with the completion of YOMA Central. The landmark development will encompass both the Westin and Peninsula Yangon. The Peninsula will be located in a beautifully restored colonial building on the corner of Sule Road and Bogyoke Aung San Road which was the former headquarters of the Burma Railway Company.


The hotels and tourism sector is likely going to experience further grievances in the short-term, as restrictions on international travel limits the amount of tourist activity that can take place in Myanmar. With that being said, if the COVID-19 threat begins to subside, measures introduced by the MoHT through the CTRP should help ease some of those grievances and allow for international demand to increase and return in 2021. Myanmar has the potential to perform very well in the post-COVID-19 tourism market with unspoilt landscapes and a rich cultural heritage. Investors should look to develop sustainable tourism options that will nurture and enhance these features of Myanmar.

Contact SPS to find out more about hotel properties for sale in Myanmar and how COVID-19 impacts your real estate assets.

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