Myanmar’s Tourism Destination Dreams Fade Amid Empty Hotels

With its sweeping view of the Shwedagon Pagoda, a glittering golden stupa and Myanmar’s top cultural attraction, the Esperado Lake View Hotel should be in an enviable spot. Yet, just two years after it was built, this four-star hotel sits half-empty for many months at a time, according to manager Nero Kyaw Wai. “We aren’t seeing the demand in Myanmar,” he said.

When the country opened to the outside world in 2011 after decades of military rule, the former British colony held promise as one of the world’s hottest tourist destinations, a last frontier for adventure travel. With its lush landscapes and ancient temples, government planners hoped tourism would become a big part of the development equation, just as it has been for neighboring Thailand.

But it hasn’t worked out that way. A construction glut has flooded Myanmar with unused hotel rooms, and poorly regulated building has damaged national treasures like the archaeological site of Bagan and scenic Inle Lake, which is becoming clogged with silt and garbage.

“It’s a massive challenge for the country to develop such a complex sector where they have no experience,” said Paul Rogers, a tourism consultant and adviser to the Myanmar government.

Change has come quickly since Myanmar’s emergence from isolation. A democratically elected coalition led by Aung San Suu Kyi —the former political prisoner and Nobel laureate — formed a new government last year, pledging to end ethnic conflict and open the economy. 

In recent years, foreign investment has poured in, bringing the first Western fast food restaurants, a Coca-Cola Co. bottling plant and cellphone service. In 2016, the country clocked one of Asia’s fastest economic growth rates, according to the International Monetary Fund.

Still, the country remains one of the world’s poorest, the military still holds powerful sway, and ethnic violence persists. The United Nations in February said members of the army and the police had likely killed hundr of Rohingya Muslims, and forced nearly 90,000 from their homes during a crackdown last year against the minority group. A government adviser who had called for religious harmony was shot and killed outside Myanmar’s international airport in January.

“There is no safe travel in the northern part of the country and the country gets a lot of bad press,” said Thet Lwin Toh, chairman of the Union of Myanmar Travel Association.

The Ministry of Hotels and Tourism in 2013 drafted a Master Plan for the industry, targeting 7.5 million visitors by 2020, a near 10-fold increase compared with the final year under military rule. The plan projected $10.2 billion in revenues, a huge growth driver for an economy that the World Bank currently estimates at about $63 billion.

Those goals now seem like a fantasy, especially after the ministry in February cut its visitor tally amid criticism it had been padding the statistics by including hundr of thousands of day trippers in the numbers.

The new data showed visits to Myanmar had actually plunged 38 percent in 2016, falling to 2.9 million from 4.7 million the year before. (Unreliable data comes with the territory in developing countries. In December, the quality of Myanmar’s banking statistics was called into question by the World Bank.) The tourism ministry didn’t answer telephone calls during business hours or respond to emailed request for comment.

“It’s been an open secret that the figures were purposely inflated,” said Alexander Scheible, general manager of the Rose Garden Hotel in Yangon, the country’s biggest city.

A gold rush mentality encouraged too much building, according to Rogers, the government adviser. The number of hotels nearly doubled to 1,300 in the five years through 2015, with foreign businesses agreeing to hotel investments totaling $2.7 billion in that span, the latest data from the tourism ministry shows. French hotel operator Accor SA and U.S. based Hilton Worldwide Holdings Inc. are among Western chains in the country.

At Hilton’s two Myanmar properties, occupancy-rates and profit have grown by double-digits each year since 2014 when they opened, Hilton’s Asia-Pacific President Martin Rinck said in an email, without providing specific numbers. The company has three more hotels planned for the country, he said. Accor didn’t respond to emailed requests for comment.

Evidence of over-development is particularly glaring in the capital of Naypyitaw. Built almost overnight in the 2000s, when the former military government moved the capital from the colonial-era Yangon, the city is now a ghost town with empty 14 lane highways, closed-up shops and, according to the Union of Myanmar Travel Association, 5,000 mostly-unused hotel rooms. A TripAdvisor review from a lodger at one of the city’s luxury hotels last fall says, “the only guests are lonely consultants’’ working for international aid organizations.

Even outside the capital city, hotels sit empty. Occupancy rates nation-wide last year were under 40 percent in the wet months of spring and summer, according to separate figures from the Union of Myanmar Travel Association. In the peak, dry season between November and March, the numbers weren’t much better: about 50 percent.

In September, the tourism ministry said it would restrict new hotel projects in several major tourist spots, including Yangon.

Still, the Department of Civil Aviation is pushing ahead with an expansion of Yangon International Airport, which by next year will be able to accommodate 20 million passengers annually, about the same number of travelers that flow through airports in busy destinations like Bali. Meanwhile, there are plans to build a second international airport just 37 miles away, with initial capacity for another 12 million passengers.

To be sure, the success of neighboring Thailand suggests there’s plenty of room to grow. Thailand is expected to host about 34.5 million international visitors this year, and the tourism industry accounts for roughly 11 percent of the nation’s $395 billion economy, according to official data. (The number is about 4 percent in Myanmar, according to the latest figures.)

Still, unregulated development may damage Myanmar’s ecology and diminish the country’s allure even before tourism has a chance to really take off, says activist Oliver Esser Soe Thet.

The owner of a boutique hotel at Ngapali Beach, a palm-treed stretch on the west coast, he says developers have been carting away truckloads of the beach’s sand for years in order to make cement for nearby building projects. Authorities don’t enforce laws against sand mining. “They just let it go,’’ he says.

At Inle Lake, a popular tourist spot where traditional fishing villages sit on stilts above the water, a large swath of shoreline forest was bulldozed for new roads and buildings in 2012, and now erosion chokes parts of the waterway. “There is a real danger the lake may actually disappear,’’ says Oscar Haugejorden, director of a Norwegian environmental group at the lake.

Not all of the blight can be blamed on the rush for development since 2011. Myanmar’s former military dictatorship built an 18-hole golf course and dozens of hotels in the middle of the sprawling Bagan archeological site, a complex of thousands of temples dating back to the 10th century. An earthquake in 2016 added to the damage, and hotels are still being built in the monument zone.

“The current government is very keenly aware of these problems, and the damage they do to Myanmar’s brand,’’ says Sean Turnell, a government economic adviser and professor at Sydney’s Macquarie University, “but tourism has huge potential for the country.’’