The tourism industry this year went beyond expectations despite the sudden outbreak of violence in the northern Rakhine State that gave the country a negative image, but the sector is expected to face a more challenging environment next year.
Tourist arrivals in the first 11 months this year was 20 per cent higher compared with the same period last year, and it is likely the government’s expected target for the whole year can be achieve.
Government data showed that from January to November tourist arrivals reached 3.1 million, already topping the 2.9 million visitors that arrived in the country last year. Its target for 2017 is 3.5 million.
The Rakhine crisis erupted a one month before the start of the peak season and that initially dampened the expectations of the tourism sector.
The crisis started on August 25, when Arakan Rohingya Salvation Army (ARSA) fighters, which the government labelled as terrorist organisation, attacked dozens of government security outposts in northern Rakhine State that led to clashes which resulted in the killing of hundreds of people.
The fighting also forced more than 650,000 Muslim residents to flee to neighbouring Bangladesh to escape the violence.
Western tourists, which used to be the primary target of the local tourism industry, began to avoid Myanmar as the crisis unfolded, opting for other destinations in the region.
But the industry quickly shifted its focus to Chinese and Southeast Asian tourists, which paid off quickly, offsetting the decline from the western and European markets.
Also boosting the 2017 tourist arrivals was the fact that tour operators have sold their packages within the first six months of the year so the impact of the Rakhine crisis was not yet fully felt.
But the real fallout from the Rakhine crisis likely be felt next year, according to industry players.
“It would be trouble during first four months of 2018,” U Phyo Wai Yarzar, vice chair of Myanmar Tourism Federation told The Myanmar Times.
“We clearly know the tourist arrivals number from January to March would be down, due to the impact of the Rakhine conflict. We can’t expect much,” he added.
The foreign media, especially from western countries, strongly criticised Myanmar over the alleged human rights abuses perpetrated by government forces during clearance operations against the terrorists, scaring off western and European travellers from the country.
There were 90 percent cancellations in Rakhine’s Mrauk-U itinerary and some impact in Ngapali too within two months of the uprising, according to tourism operators.
“If there would be more negative reports in the foreign media and there would be more unfortunate events that might occur, we would have to wait for two or three more years for market stability,” U Thet Lwin Toh, chairman of Union of Myanmar Travel Association, said.
The most notable decline in the western market are those from Germany, Italy and the United Kingdom. Fortunately the number of visitor arrivals from the South Asia and ASEAN countries increased.
According to the Ministry of Hotel and Tourism data, visitors from the Philippine and Vietnam rose 70pc and Singapore registered a 26pc increase.
The tourism market developers are preparing to extend potential market destinations in South Asia and ASEAN rather than in Western and European markets.
“We are preparing for the best in 2018. We will start market promotions for green season (low or rainy season) from February. Now we intend to extend promotions to the Philippine, Vietnam, Thailand, Singapore, India, China, Japan as our main market targets,” Daw May Myat Mon Win, chair of Myanmar Tourism Marketing Association said.
Myanmar tourism is trying to break into the Chinese market and hopes to attract about one million Chinese visitors in the next two years.
China is the biggest market in the world and Myanmar is just its neighbour. Thailand attracted 10 million Chinese visitors in 2016. Chinese travellers like to shop, U Pho Wai Yarzar said.
“We have to prepare for many shopping places right now if we want to target the Chinese market and I suggest we target the high-end Chinese tourists,” he said.
The domestic aviation sector has yet to be impacted by the Rakhine conflict but things can change quickly if some unforeseen negative events happen in 2018.
“We haven’t received booking cancellations until today and hope this good fortune will continue through 2018,” Daw Aye Mra Tha, general manager of Air Kanbawza airlines said. “We can’t change the current situation but hope for the best and prepare for the worse.”
The country’s main tourist attraction sites like Bagan and Inle Lake recorded 20pc decline in international tourist arrivals but this was offset by the rise in the number of local tourists.
According to Domestic Pilgrimages and Tour Operators Association’s statistics, local numbers are expected to reach 7.5 million end of the season in April. The association also noted an increase in the number of independent domestic travellers, which is not recorded in the association’s statistics.
Despite the negative impact of the Rakhine unrest on the country’s image, foreign direct investment (FDI) in tourism sector is increasing, especially in the hotel sub-sector – a testament in the long-term viability of the country as tourist destination.
According to the ministry’s statistics, FDI worth US$4.37 billion (K5.97 trillion) were channelled into 64 hotel project as of November, much higher than the $3.08 billion investments registered in the entire 2016.
As of November 2017, there are 1, 575 hotels with 63, 336 rooms operating in the whole country, the ministry added.
The tourism industry hopes the government makes good its promise to really work hard to achieve peace not only in the northern Rakhine State but throughout the country.
“We hope that 2018 would be a peaceful year. Peace and tourism is intertwined. ‘Tourism is for peace’,” U Thet Lwin Toh said.
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