Southeast Asia has become literally a hotspot for winter sun seekers from northern climes.
It all started in Thailand with resorts, such as Phuket and Krabi. Then Malaysia and Vietnam became popular and more recently Cambodia's relatively untouched southwest coast with resorts like Sihanoukville.
Now Myanmar has come to the fore since the military junta transferred power to the civilian government in 2012. In that year, tourism arrivals exceeded one million for the first time, and in 2013, a Tourism Master Plan was drawn up, targeting 7.5 million arrivals by 2020.
Four beach resorts in Myanmar standout as coming destinations for those in search of the next exotic Asian tropical getaway, according to a research report from C9 Hotelworks, a Phuket-based consultancy.
Each resort has its unique features and seems to be charting an individual course.
Arrivals climb by over 30%
According to C9 Hotelworks’ "Ngapali Beach Tourism Market Review", Ngapali received over 70’000 visitors in 2016, which was an impressive 31% year-on-year increase.
Most travellers arrive on domestic flights to the gateway Thandwe Airport from Yangon, Mandalay, Bagan, Heho or Sittwe. According to local authorities, Thandwe is currently in advanced discussions to launch direct international flights in the near future.
Myanmar’s growing aviation sector has provided more airlift to Thandwe which boosted arrivals by 28% in 2016, especially increasing visitation during the low (summer) season.
The high season in Ngapali goes from October to May, with peak months in December, January and April.
Since the present Thandwe hotel zone is becoming crowded, the government is expanding the zone to the south by 7 km. The initial phase of the expansion involves putting in place infrastructure for the area, such as roads, electricity and other public services.
A supply-constrained hotel market
Rates at international hotels remain strong given limited supply.
The market-wide average daily rate for international standard hotels is US$191, while year-round occupancy averaged 65% in 2016 with the peak period achieving between 85% and 90%.
One key addition to the market has been the arrival of the Hilton brand.
To date, the hotel supply in Ngapali has been relatively limited, with only 26 establishments offering a total of 878 keys. Nevertheless, room capacity has already increased at a rapid rate – almost doubling since 2011.
Domestic guests come during the monsoon
In terms of guest segmentation, 69% of demand comes from overseas travellers, but domestic tourism is rising at a faster pace.
Access through improved transport links remains the key to growth of the hotel sector.
The leading incoming markets in 2016 were: Germany, UK, France, Switzerland, and Italy.
High-spending European tourists are certainly the key driver of high average daily rates for beachfront hotels.
However, due to the seasonal presence of foreign tourists, the government has emphasised growth of the domestic market in order to make Ngapali a year-round destination.
With total inbound flights up by 19% in 2016, arrivals of domestic travellers in tourist accommodations grew 79% compared to only 11% for foreigners over the same period.
This has resulted in more hotels operating during the rainy season, from June through September.
Couples account for approximately 85% of hotel guests, followed by families and a growing demand from corporate incentive groups. Tour operators generate 70% of hotel bookings which is common in resort destinations.
Room count to grow by 60%
The active hotel development pipeline now includes 10 properties with 516 keys, which implies an increase in room count of almost 60% over the next couple of years.
Comparing the four resorts
Each of the four key beach destinations in Myanmar – Ngapali, Kawthaung, Ngwe Saung and Chaungtha - offers a distinctly different experience.
The latter two, given driving access to Yangon are clearly more attractive to the surging domestic market and are more mass tourism volume-driven destinations.
Meanwhile, Kawthaung is rapidly evolving as a tourism hub for the Mergui Archipelago and the connection to the nearby Thai market of Greater Phuket via Phang Nga and Ranong offers some synergies.
“With Ngapali, escalating land costs are likely to see a series of internationally branded luxury resorts coming up in the next two years,” remarks C9’s Managing Director, Bill Barnett, who adds that, “With high room rate and mounting demand, it’s not hard imagine that Myanmar’s big four beach destinations are going to be attracting a significant amount of attention from both domestic and international hospitality players.”