The Tourism Master Plan brings sector goals into focus

In June 2013 the Myanmar Ministry of Hotels and Tourism unveiled its Tourism Master Plan, which aims to set clear guidelines for the development of the tourism sector over the next seven years. The government is hoping to channel the industry’s short-term growth into long-term benefits for the country.

The master plan, developed with the help of the Norwegian government, the Asian Development Bank (ADB) and a team of consultants, contains an analysis of the country’s tourism assets and provides a framework for their development and sustainability at a projected cost of $486.8m.

Along with the Responsible Tourism Policy, the master plan intends to “use tourism to make Myanmar a better place to live in”, promising to develop employment and business opportunities in the tourism sector in a way that will conserve the country’s diverse natural and cultural heritage.

Setting Goals

The plan focuses on six main areas: strengthening the institutional environment; building up human resources; strengthening safeguards; developing quality products and services; improving infrastructure; and building Myanmar’s brand as a tourist destination. It is split into a long-term plan to guide the sector through 2020 and a short-term action plan that extends until 2015. The latter intends to align goals for tourism development with the Framework for Social and Economic Reforms, outlined by President U Thein Sein shortly after he took office and began the sweeping reforms in 2011.

Infrastructure improvement is the most expensive aspect of the plan, projected to cost $251m, or 44% of the total. These improvements will include road and rail upgrades, which will better connect different parts of the country. However, the largest development in terms of brick-and-mortar infrastructure is the $1.5bn Hanthawaddy Airport expected to commence operations in 2019 just outside Yangon. A consortium led by South Korea’s Incheon Group dropped out of the contract to run the project in 2014. The airport will accommodate 12m arrivals per year in its first phase, with an eye to eventually take on 30m – over 10 times Yangon’s current capacity. Given the current space restrictions at Yangon International Airport and the tourism sector’s growth trajectory, a new airport will undoubtedly be a necessity in the coming years. In late October 2014 a consortium consisting of Singapore’s Yongnam Holdings, Changi Airport Planners and Engineers, and JGC Corporation of Japan were awarded the contract to complete the construction of the international airport. Yangon’s existing international airport is also undergoing upgrades. The Yangon International Airport is due to be upgraded in partnership with Pioneer Group to accommodate 6m passengers annually by 2019, over twice the current 2.7m.

Digitisation

Apart from hard infrastructure there are a number of service upgrades included in the master plan, some of which have been delivered. In October 2014 Myanmar began issuing e-visas to visitors from 43 countries, including the ASEAN nations, in an attempt to boost inbound numbers and facilitate easier passage into the country. The lengthy bureaucratic process has been replaced by an online application procedure that can deliver a tourist visa within five or six days. Furthermore, additional online platforms such as the Ministry of Tourism website, local flight and travel booking websites and numerous tour operators have a strong web presence as part of a digitisation push in the sector. As the country’s new telecoms operators begin rolling out their services and improving domestic connectivity, more businesses will adopt the online consumer-facing features on which many travellers have come to rely.

Driven By Quality

The master plan is quality-driven, focusing on increasing the value and yield of tourism rather than simply driving up visitor numbers. This involves diversifying the product base that the country has on offer. While Myanmar remains primarily a cultural destination, more luxury products are beginning to take hold. Many well-known international hotels such as Hilton, Kempinski and Shangri-La have begun to take a keen interest in the country. Land cannot be owned by international parties, however, meaning a local partner is necessary for foreign firms to operate within Myanmar. Some key partnerships between international groups and local operators could thus change the landscape of Myanmar’s attractions dramatically. The prime heritage buildings in Yangon and other cities could offer a launch pad for such initiatives.

In the centre of downtown Yangon, near the existing five-star Shangri-La hotel, an old colonial railway office building has been undergoing renovation since mid-2014. Local conglomerate Serge Pun Associates has confirmed the Landmark Project, as it is known, will involve investment from Japan and Hong Kong to the tune of $400m. The 4-ha plot is the largest and most prominent heritage site to be developed to date, and is being transformed into a luxury hotel.

The Workforce

As the tourism landscape changes, certain threats to long-term stability are emerging. Across the country, effective development is hindered by a lack of expertise; due to a lack of quality hospitality education in the country, many hotels and touristfacing facilities offer sub-par service. Politicians are urging Myanmar nationals to return to their motherland to help the country realise the growth opportunity it now has, but it is recognised that a longer-term solution is needed in the form of established university courses and training schools. “There is not yet a ministry-led institute for tourism,” Daw Kyi Kyi Aye, a senior advisor at the Myanmar Tourism Federation, told OBG. “More skills are desperately needed.” To this end, Yangon University has begun offering run a tourism course, which is now in its second year and produces 80 graduates per year. A group of smaller privately run tourism training institutes are also attempting to fill the gap for hoteliers and restaurant managers. However, these do not offer courses of consistent quality, meaning that new hotels poaching staff from existing businesses is a more common solution.

Financing

Of the master plan’s $486.6m budget, $215.6m (44%) is designated for the six key areas and spread over 21 projects. The plan gives details on how this amount is split among the six categories but omits exactly how it will raise the funds.

Given the government’s capacity and accountability issues regarding tax collection and public finance management, it is likely that a number of public-private partnerships will support the plan.

The economic and social benefits tourism can bring are within Myanmar’s grasp, but more financial and technical support will be necessary for the tourism sector to reach its growth potential.

Further investment in diversification efforts and an emphasis on sustainable tourism development will be necessary in order to accommodate the increasing number of foreign visitors – and to ensure they continue to view Myanmar as a compelling destination.

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The Report: Myanmar 2015

Tourism chapter from The Report: Myanmar 2015

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