Interview: Chali Sophonpanich
What risks do hoteliers face in expanding operations in emerging countries such as Myanmar? How can these risks be managed?
CHALI SOPHONPANICH: There are three areas of risk, all of which are well handled by leaders of the country, the first of which is political. Myanmar is becoming more settled, as evidenced by the previous and upcoming elections. I believe that the country is moving in a very positive manner. People have freedom of expression, and the government is willing to support such change.
The second risk is social stability. Myanmar is very diverse in terms of culture and ethnic groups, so there is a major challenge in dealing with minority issues. The current style of giving more authority to individual states has assisted in managing these issues.
Thirdly, on the economic side, the risk I would identify is related to infrastructure. The economy is growing very quickly, and urbanisation is causing bottlenecks in power supply, traffic and housing. There is a shortage of accommodation, clean water and other elements that make for comfortable living. Urban areas attract people because there are more employment opportunities and better lifestyles. Yangon must move faster to facilitate the change, particularly with utilities, transport and better education for Yangon residents.
As the room rate rises from $50 to $80 to $200 or more, many people want to build new hotels. The concern is the falling quality of hotels that still have high room rates. Customers will have bad experiences because the products are not good and the prices are high. Customers need to be satisfied with the rates they pay, and therefore quality control needs to be put in place. Providing high standards is essential to the growth of the hotel industry in Myanmar.
What is your outlook for the hotel industry in Myanmar, compared to the rest of South-east Asia?
SOPHONPANICH: Myanmar is a big country with an interesting history, landscape, arts and culture. The outlook is bright. Evidence of its potential growth can be seen in tourism arrivals, which numbered 750,000 in 2011, 1m in 2012 and 2.04m in 2013. The target of 7.5m by 2020 is achievable, but it needs to be planned well. Myanmar must focus both on new industries’ foreign direct investment and tourism. There should be an emphasis on the development of core areas that will also supplement the tourism industry. Areas that need attention include quality of education, English-speaking skills, clean water, utility and transport capacity, and the high cost of land.
I see potential for growth similar to that which Thailand experienced over the last 20-30 years in the tourism industry. Myanmar can use Thailand as an example when planning for the future: expanding the airports, connecting roads with formerly inaccessible attractions, and adhering to a “green” policy. Previously foreigners only visited a limited number of places, but now many beaches and resorts in Thailand are well known because of the government’s commitment to tourism investment. Myanmar’s government can learn from this by opening up more areas and privatising some of its beaches and mountains for tourism. This can generate revenue that can be used to finance construction efforts. These goals can be achieved whilst adhering to environmental initiatives.
What steps can the industry take to prolong stays and encourage greater spending per visitor?
SOPHONPANICH: Myanmar’s natural beauty has the potential to draw large numbers of tourists for extended stays. The country should seek to promote lesser-known areas and improve surrounding facilities. Travellers want to have unique experiences and broaden their understanding of the world.
To encourage visitors to lengthen their stays, Myanmar must focus on improving the ease of travellers’ convenience and comfort. Improving travellers’ ability to immerse themselves in the local culture could also allow visitors to explore more areas of the country, stay for longer and contribute more to the local economy.
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