YANGON, 15 May 2012: Tour operators and foreign-owned hotels are in a standoff over soaring hotel rates that skyrocketed almost 300% and threaten the country’s long-term tourism prospects.The initial report on the dispute was reported by the Myanmar Times, but there has been evidence for some time, since the country started to open to investors, that hotels were taking advantage and trebling rates.Representatives of Yangon’s foreign-owned hotel attended a meeting chaired by the Myanmar Hotels and Tourism deputy minister, U Htay Aung, but it ended with no conclusion.
YangonRoom rate for international standard hotels in Yangon have shot up by around 300%, according to tour operators who monitor net rates they are given on volume business.There are just too many business visitors flocking to the country in a kind of gold rush to grab business opportunities as the country’s opens to democracy and sanctions are removed by the international community.It has sparked off a reaction by hotels in Yangon, mostly owned by foreign companies. They are refusing to honour contracted rates to tour operators based on an estimated production of bookings.
Tour operators identified what they called the offenders, who they alleged failed to honour contracted rates. They are: Traders Hotel Yangon, Sedona Hotel Yangon, Parkroyal Yangon Hotel and Chatrium Hotel Yangon.Tour operators claim they signed annual contracts on fixed rates based on volume and hotels are now cancelling them or demanding tour operators accept a much higher rate.
“You can raise the price when negotiating a contract, but don’t change the contract price later on. “In future, Myanmar will become a great tourist destination so we should cooperate and negotiate with each other now on these matters” said Tour Mandalay chairman, U Khin Zaw. He alleged: “Sedona and Parkroyal are refusing to take bookings from agents for the rest of the year and Chatrium Hotel cancelled a contract 5 April that was signed 2 March and contract room rates at Traders Hotel rose US$78 last year to $242 this year.
All Asia Exclusive Travel managing director, U Phyoe Wai Yarzar said it was important for the industry that room rates were stable.Myanmar Hotels International’s (manages Inya Lake Hotel) managing director, Sukhdeep Singh, acknowledged that hotel owners were driving the room rate increases.
“The increases are very high,” Mr Singh said. “We do want to give contracts to tour operators … I promise that I will keep your suggestions but of course I am not the right person to solve this. We are not the owners of this hotel.”Many of the hotels are owned by Singaporean or Malaysian hotel companies that are now adopting opportunist policies to cash in the current rise in business travel.
Representatives from hotels said “foreigners exploring for investment opportunities were driving the increase and they were already receiving bookings for 2013. Parkroyal Hotel general manager, Rum Nurani said his hotel was simply responding to demand from a “new market” that wanted “comfortable accommodation”.
