The Myanmar Times
Friday, 24 October 2014
The Myanmar Times
The Myanmar Times

Foreign hotels meet cap as local prices take off

Sedona Hotel in Yangon, one of several foreign-owned hotels that has started complying with a price cap. Photo: SuppliedSedona Hotel in Yangon, one of several foreign-owned hotels that has started complying with a price cap. Photo: Supplied

Most foreign-owned hotels in Yangon have started complying with a government order to reduce prices, following a warning from Minister for Hotels and Tourism U Tint Hsan.

The ministry on June 25 set a cap of US$150 for standard hotel rooms following lobbying from travel agents and fears that skyrocketing prices would damage the international image of the industry.

However, hotels only began complying with the notice after the minister met hoteliers, travel agents and private tourism bodies at Inya Lake Hotel on July 17 to clarify the room rate instruction released by the ministry.

“We receive contracts from Sedona and Traders Hotel with the rate announced by the ministry for the coming season, from October to March 2013. We are still waiting to get contracts from Chatrium and Parkroyal hotels. We haven’t received them yet but they say they are working on the contracts,” Ma Sabei Aung, managing director of Nature Dream Travel and Tours, said on July 26.

“We really appreciate their response with the new contracts. The situation is much better than before,” she said.

Ma Thiri Kyarnyo, marketing and communication manager of Parkroyal Hotel said the hotel was “delighted to comply with the rate proposal issued by ministry for our travel agent partners”.

“We look forward to a healthy growth in Myanmar tourism,” Ma Thiri Kyarnyo said.

“At the moment we’re preparing the contracts and they will be ready in a week time and we will be very happy to receive booking from all the travel agents.”

Ma Stella Kyaw Win, director of sales at Sedona Hotel Yangon, said the company would comply with the standard room rate cap.

“I have nothing especially to say about the issue between the agents and hotels. But I would like to say that we are giving contracts with the price mentioned by the ministry for the travel agents,” she said.

Ms Kerstin Jung from Gracious Myanmar Travel said Traders and Parkroyal had dropped prices dramatically and offered rates for standard rooms according to the Ministry of Hotel and Tourism’s guidelines.

“My biggest concern is the value of the contract,” she said, referring to whether the contracts would be honoured.

But as foreign-owned hotels began complying with the cap, some locally owned hotels responded by increasing room rates significantly.

Ms Jung said rates at some locally owned hotels were three to four times higher than a year ago.

“I’m really not sure if that is a healthy development for the tourism sector,” she added.

“Actually Yangon has many hotel rooms. But to be honest, many local hotels just don’t want to work with agents and some of the hotels are really not suitable for foreign guests. So, I really appreciate the engagement from the Ministry of Hotels and Tourism to safeguard the image of Myanmar as an attractive tourist destination,” Ms Jung said.

“Relations with foreign hotels is now quite ok. But there is a problem with local hotels,” Ma Sabei Aung told The Myanmar Times on July 27, citing large recent room rate increases at Mya Yeik Nyo, Mingalar Garden, Summer Palace, Clover and newly opened Green Hill hotels.

U Tin Soe from Joyful Jupiter Tours said he had booked rooms for group tours in October and January 2013 at Mya Yeik Nyo Royal Hotel and received confirmation from the hotel but he was later told prices would increase dramatically.

Mya Yeik Nyo is owned by construction company Zaykabar, whose chairman, U Khin Shwe, is a member of the Amyotha Hluttaw.

“They said they would send the contract later and the hotel staff said the room rate for a single room would be about $70 and a double room about $80. This is the normal price at all the locally owned hotels in Yangon. But on July 21 I received the room rate from Mya Yeik Nyo Hotel in which the single room rate had almost doubled to $120 and double room was $180. How can I do my business with these skyrocketing prices?” U Tin Soe said.