An increase in tourism to Myanmar is pushing up direct foreign investment in the country's hotel sector. FDI has reportedly reached $2.7 billion, Htay Aung, minister for hotels and tourism, said during a signing ceremony between Myanmar-based developer Hoang Anh Gia Lai Myanmar and Spain's Melia Hotels International, The Nation reports.
Last week, Melia and Hoang Anh Gia Lai Group announced a partnership on the Melia Yangon, part of the $550-million HAGL Myanmar Centre project, according to Deal Street Asia. The developer is reportedly Myanmar’s biggest foreign investor in the hotel and tourism sector. Meanwhile, this project is, in turn, HAGL’s largest overseas investment.
This deal is only one of many. "There are 47 hotels invested by foreign investors," said Aung.
On a whole, overseas investors poured more than $8 billion into the country, creating 150,000 jobs, said the Directorate of Investment and Company Administration (DICA) in the Myanmar Times. More than half that figure, $4.3 billion, came from Singapore.
The Myanmar Investment Commission aimed to attract $5 billion in FDI last year by promoting the manufacturing sector to create more jobs.
“I think investors are becoming more confident in investing in the country as our economic prospects improve under a strong legal infrastructure. We have made many bilateral agreements with the United States, Japan and European Union members,” said secretary of the Myanmar Investment Commission U Aung Naing Oo. “This shows that the country’s goal of becoming a middle-income country within 15 years can be met.”
Where It's Coming From
Hotel investment is largely coming from Asia Pacific, including Singapore, Vietnam, Thailand, Hong Kong, Japan and Malaysia. The UK, Luxemburg and the UAE are also players in this relatively still untapped market.
Myanmar investment in the sector was a reported $55 million in 2011 and the amount increased heavily to $553 million in 2014.
Investment by local and foreign investors in the sector is expected to top US$3 billion in 2015.
In order to spur more development and investment, a Myanmar Tourism Master Plan, which will aim to promote Bagan, Inle Lake, Mrauk-U, Yangon and other popular tourist destinations, is being developed.
Myanmar received 3.5 million visitors and generated more than $1 billion last year, according to the ministry.
And last week, as The Nation writes, the MIC gave the go-ahead for hotel projects in Kyunphila, Ngaman and Boywe islands in Myeik Archipelago, Tanintharyi Region.
"The land measurement tasks are already taking place. The Myanmar company will operate in partnership with a foreign counterpart," said an official from the Myeik Division.
The 27 companies have proposed hotel projects in Kayinkwa, Samat, Ngakhinnyo, Kyunphila, Ngaman, Ngahtweyu, Ngalonelapel, Bonetkyaw, Hlainggu, Satan, Boywe and Domel islands, according to the regional government.
Altogether 13 hotels are due to be built on these islands and the MIC has given permits on Ngalonelapel, 155 island, Kayinkwa, Ngakhinnyo, Kyunphila, Ngaman and Boywe islands.