Myanmar hotels set for record growth in 2014

Ancient temple in Bagan after sunset , Myanmar
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The burgeoning hotel market in Myanmar's capital city Yangon is set for another year of record growth in 2014, according to property research firm Jones Lang LaSalle.

JLL analysts forecast the surge in visitor arrivals to the Southeast Asian country - which only opened its doors to foreigners in recent years.

"Ever since Myanmar embarked on its journey to democracy in 2011, Yangon has seen an incredible improvement in hotel market performance as demand continues to outpace supply," said Andrew Langdon, executive vice president of Thailand and Indochina for JLL's Hotels & Hospitality Group.

"Over the past 12 months we've seen a number of International hotel operators, including Accor and Hilton, take advantage of these conditions with key projects slated to open later in the year," he added.

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Myanmar's economy has been on the up ever since western sanctions were lifted in 2012 opening the door for foreign investment, following 50 years of direct military rule.

Western countries had previously shunned Myanmar due to the government's heavy-handed treatment of its citizens, but changed their view following the election of pro-democracy leader Aung San Suu Kyi in 2011.

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Last year visitor arrivals increased by 46 percent on year, JLL said, while the occupancy rates for upscale and luxury hotels surged to 80 percent from 45.8 percent in 2009.

JLL expects other developments this year to continue boosting Myanmar's hotels market, including the expansion of its international airport and the opening of a new airport in 2018.

Further steps being taken by the Asian Development Bank to open up Myanmar's economy are also expected to boost conditions. For example, earlier this month the ADB relaxed rules on international business money transfers from Myanmar by guaranteeing letters of credit from Myanmar's CB Bank, the Myanmar Times reported.

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JLL said opportunities for investors lie in the mid-scale segment of the hotels market, given that the majority of future supply will be concentrated in the upscale and luxury end of the market.

Beyond 2014, however, occupancy rates are expected to stabilize as an increase in supply will help moderate average daily hotel rates, the analysts said.

"The future remains bright for the Myanmar hotel market and opportunities await investors and operators who are willing to take them," added Langdon.