New Routes Into Myanmar + Limited Hotel Rooms = Soaring Prices

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Myanmar Hotel
A Burmese soldier walks past a hotel where diplomats and foreign journalists are attending a news conference in Laukkai, capital of Myanmar's Kokang region.

It's hard being the next big thing -- just ask Myanmar. As airlines add routes and more visitors flood into this once-hermetic nation, the Burmese have struggled to figure out just what exactly to do with them. Credit cards (and even creased dollar bills) are rarely accepted, ATMs are virtually non-existent and hotels, if travelers can even find one, are suddenly mind-bogglingly expensive.

After decades of isolation, "The Land of Golden Pagodas" has opened up in a big way, paving the way for massive economic and political changes. But change, on any scale, takes time.

"In reality, the scope of change right now is minimal," Jennifer Quigley, advocacy director for the U.S. Campaign for Burma, told IBTimes in July. "It appears to be so huge to the international community, but there is no sort of reckless optimism on the part of the Burmese people."

Be that as it may, change, if only in the air, is creeping down to the ground.

This week, Singapore Airlines announced new routes into Yangon, the former capital and largest city.

"Demand has been growing strongly for both business and leisure travel to Myanmar, and Singapore Airlines looks forward to serving the country for the first time," Mak Swee Wah, SIA's executive vice president for commercial flights, said, announcing the new route. The airline will commence operations in October, running 16 flights a week.

Singapore Airlines is not alone. Korean Air, Qatar Airways and Eva Air will also begin flights in October as other carriers scramble to claim limited spots at Myanmar's small international airports.

Air Asia, Southeast Asia's rapidly-expanding low-cost carrier, already flies to Mandalay and Yangon, and it increased its operations in the nation over the summer. A new local carrier, First Myanmar Investment, has planted its foot in the market, too, with its maiden flight Sunday between Yangon and the capital, Naypyidaw.

With all these new flights, officials have called on local and foreign investors to fund the construction of a second airport near Yangon. The planned Hanthawaddy International Airport, set to open in 2016 in Bago, will cover 9,000 acres (3,642 hectares), an area Tin Naing Tun, the head of the Civil Aviation Department, claims is nine times the size of Yangon International Airport.

The new flights may indeed ease the backlog both tourists and businesspeople encounter when entering the burgeoning nation. What may take considerably longer, however, is what they face on the ground.

Add a surplus of visitors, mix in a lack of services, and what you get are ballooning prices. The four-star Traders Hotel, for example, reportedly charged $320 for a room this August that went for $80 early last year.

And why not? Visitor numbers were up 26 percent in 2011 at 391,000, according to official figures. Aung Zaw Win, chief of the government's Directorate of Hotels and Tourism, wrote in a recent report that Yangon alone will receive an estimated 600,000 tourists this year, and up to 900,000 in 2013.

A country that was once visited only by intrepid backpackers has quickly become a place where visitors must book accommodation well in advance to ensure a place to stay, particularly in the major cities. Moreover, the easing of economic sanctions has lured hordes of business travelers and, because many companies block-book rooms that would have normally been occupied by leisure travelers, the shortage has been exacerbated.

Before mid-June when a new four-story mid-range hotel opened up, there had been virtually no new hotels added in Yangon for more than a decade. Now, hoteliers like Accor, Starwood and Marriott International are looking and ready to pounce.

Burma has about 26,000 total hotel rooms nationwide (compared to 50,000 in Bangkok alone). Less than half of the estimated 8,319 hotel rooms in Yangon, for instance, have facilities like air-conditioning and access to potable water, and they are considered "unsuitable" for foreign visitors. Beyond the city limits, the percentage is even lower.

"From the 1960s onward, tourism was limited by the government -- like many military or one-party states -- to selected destinations in the center of the country," explained Martin Smith, a leading authority on Burmese politics and author of the book "Burma: Insurgency and the Politics of Ethnicity." "Meanwhile, the borderlands remained closed to outside visitors and continued to be afflicted by ethnic and political conflict."

Smith said the distinctive cultures, history and geography of the country provide a great diversity of potential attractions, but cautioned that "the tourism infrastructure is very undeveloped by international standards."

The Myanmar Times reported in August that the Ministry of Hotels and Tourism expects the room shortage to ease when an additional 1,670 hotel rooms become available next year. Government officials, however, say this will hardly be enough to meet an expected surge in demand, particularly when the nation hosts major events like the Southeast Asian Games and two summits of the Associations of Southeast Asian Nations, or Asean.

The airlines can keep adding routes, but at some point, someone may need to ask the question: Where will everyone stay?

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