Investment Opportunities In Hotel Industry in

Presentation by:

Mr. Aung Myo Min Din Chairman of Myanmar Hotelier Association Tel and Fax: 09-5506609, 01-502906 ~ 7 E-mail: [email protected] Website: www.myanmarhotelier.org

International Air Routes to Myanmar

1 Air Asia 2 Air China 3 Air India 4 Air KBZ 5 All Nippon Airways 6 Bangkok Airways 7 Biman Bangladesh Airlines 8 Cathy Dragon Air 9 China Airlines 10 China Eastern Airlines 11 China Southern Airlines 12 Emirates Air 13 Himalaya Airlines(H9) 14 Hong Kong Express Airways 15 Jet Star Air 16 Korean Airlines International Air Routes to Myanmar

11 China southern Airlines 17 Malaysian Airlines 12 Dargon Air 18 Malindo 13 Jet star Asia 14 Korean Air Myanmar Airways 19 International 15 Malaysia Airlines 20 Myanmar National Airlines 21 16Nok AirMyanmar Airways International TigeTige AirAir 22 17QatarNok AirwaysAir 23 18ScootQatar Airllines Air 24 19Silk AirSilk Air 25 20SingaporeSingaporeAirlines Airlines 21 Thai Airways 26 Thai Air Asia 22 Thai Air Asia 27 Thai Airways International 23 Thai Smile 28 Thai Smiles Airways 24 Tige Air 29 25Thai LionVietnam Airlines Airlines 30 Vietjet Air 31 Vietnam Airlines Domestic Flights in Myanmar Myanmar National Airline Operate to Domestic Airport ATR-72, ATR-42, MA60, Beech 1900D, ERJ 190 - MannYadanarpon Airline(since 2013) Operate to Domestic & International Airport ATR 72-600 Airways (since 1996) Operate to Domestic Airport ATR-72 Air KBZ (since 2010) Operate to Domestic Airport ATR-72 Asian Wings (since 2010) Operate to Domestic Airport ATR-72, A321 FMI Air (since 2012) Operate to Domestic & International Airport CRJ200,ATR 72-600 Golden Myanmar (since 2013) Operate to Domestic Airport Airbus A320 - Air (since 1994) Operate to Domestic Airport ATR-72, ATR-42 Apex Airline(since 2015) Operate to Domestic Airport ATR 72-600 Visitor Arrivals List

Cambodia Malaysia Myanmar Philippines Singapore Thailand 2017 Jan-Jun Jan-May Jan-Jun Visitor Jan-Aug Jan-Jun Arrivals:Jan-Aug AOR:2016 Visitor Arrivals 2,662,679 10,820,000 1,760,000 4,470,880 11,734,650 17,323,640

AOR(%) N/A 72.80 44.0 66.08 90.00 75.97

Room Comparison of the countries Cambodia Malaysia Myanmar Philippines Singapore Thailand

Area 181,03598km2 330,803km2 676,578km2 300,000km2 7,191km2 513,120km2

Hotel Rooms As at Dec 2016 As at Sep 2017 As at Dec 2016 As at Dec 2016 As at Dec 2016 As at Dec 2016 Accredited Hotels Supply Only

Total no. of Hotels 647 3,264 1,432 482 413 9,287

Total no. of Hotel 36,236 241,350 56,429 55,638 63,850 390,000 Rooms International Visitor Arrivals to Myanmar 2017 Name Of Entry Points 2013 2014 2015 2016 (Jan-August)

Yangon Entry Point 817,699 1,022,081 1,180,682 1,180,144 728,010

Mandalay Entry Point 69,596 90,011 107,066 128,387 96,921

Mawlamyine/ Myeik/ Muse// 1,024 271 47,841 25,429 Myawaddy/ Tamu/Hteekhee

Nay Pyi Taw 11,842 19,261 13,835 16,224 11,024

Border Tourism 1,144,146 1,949,788 3,379,437 1,634,611 1,417,854

TOTAL 2,044,307 3,081,412 4,681,020 2,907,207 2,279,238

GROWTH 93% 51% 52% -38% 22% Hotels, Motels and Lodging-House Business Licenses

Hotel Apartment Rooms

Local Investment 1486 54595

Foreign Investment 27 4842

State Own Hotel 21 968 (Lease Out)

J.V 6 1137

Total 1540 61542 FDI Hotels in Country –wide (Total)

Project Rooms Investment Sr. City USD in Million 1 Yangon 43 9072 3648.2044 2 Mandalay 3 618 81.7300

3 3 106 46.5310 4 Tachilake 3 290 37.2500

5 Nay Pyi Taw 1 88 9.0000 6 1 127 22.0000 7 Myeik 4 440 51.5800 8 1 800 125.0000

9 1 155 16.0300 10 Kalaw 1 80 5.52 Total 61 11776 4042.8454 Permitted FDI Hotels

Sir. Projects Rooms Investment US$(m) Remarks

1. 33 6241 1749.772 Completed

2. 11 2296 993.4454 Under Construction

3. 17 2670 1299.4088 MIC Permitted

61 11776 4042.4854 FOREIGN INVESTMENT IN HOTELS AND COMMERCIAL COMPLEX

Number of Project Investment Remark Sr. Country (USD in million)

1. Singapore 31 2712.4834 2. Thailand 12 486.1610 3. Vietnam 1 440.0000 4. Hong Kong 5 187.7000 5. Korea 1 100.0000 6. Japan 4 73.6650 7. Malaysia 3 23.1360 8. United Kingdom 3 14.5000

9. Luxembourg 1 5.2000 Total 61 4042.8454

Top 10 Visitors by Nationality in 2011

No Country Pax %

1 CHINA 62018 15.85 2 THAILAND 61696 15.77 3 MALAYSIA 23287 5.95 4 KOREA 22524 5.76 5 JAPAN 21321 5.45 6 TAIWAN 15542 3.97 7 SINGAPORE 15391 3.93 8 INDIA 12318 3.15 9 HONGKONG 3280 0.98 10 BANGLADESH 1988 0.51

Source: www.myanmartourism.org Top 10 Visitors by Nationality in 2012

No Country Pax %

1 THAILAND 94342 15.90 2 CHINA 70805 11.93 3 JAPAN 47690 8.04 4 KOREA 34805 5.87 5 MALAYSIA 30499 5.14 6 SINGAPORE 26296 4.43 7 TAIWAN 22060 3.72 8 INDIA 16868 2.84 9 HONGKONG 4826 0.81 10 BANGLADESH 1737 0.29

Source: www.myanmartourism.org Top 10 Visitors by Nationality in 2013

No Country Pax %

1 THAILAND 139770 15.53 2 CHINA 90550 10.06 3 JAPAN 68761 7.64 4 KOREA 54934 6.10 5 MALAYSIA 39758 4.42 6 SINGAPORE 39140 4.35 7 TAIWAN 30699 3.41 8 INDIA 21042 2.34 9 HONGKONG 7874 0.87 10 BANGLADESH 1981 0.22

Source: www.myanmartourism.org Top 10 Visitors by Nationality in 2014

No Country Pax %

1 THAILAND 198229 17.52 2 CHINA 125609 11.10 3 JAPAN 83434 7.37 4 KOREA 58472 5.17 5 SINGAPORE 47692 4.21 6 MALAYSIA 46534 4.11 7 TAIWAN 32664 2.89 8 INDIA 32306 2.85 9 HONGKONG 8522 0.75 10 BANGLADESH 3654 0.34

Source: www.myanmartourism.org Top 10 Visitors by Nationality in 2015

No Country Pax %

1 THAILAND 204539 15.71 2 CHINA 147977 11.37 3 JAPAN 90312 6.94 4 KOREA 63715 4.90 5 SINGAPORE 45125 3.47 6 MALAYSIA 40852 3.14 7 TAIWAN 31735 2.44 8 INDIA 34628 2.66 9 HONGKONG 4237 0.33 10 BANGLADESH 2913 0.22

Source: www.myanmartourism.org Top 10 Visitors by Nationality in 2016

No Country Pax %

1 THAILAND 243443 19.13 2 CHINA 183886 14.45 3 JAPAN 100784 7.92 4 KOREA 64397 5.06 5 SINGAPORE 50198 3.94 6 VIETNAM 48869 3.84 7 MALAYSIA 43931 3.45 8 INDIA 38537 3.03 9 THAIWAN 36118 2.84 10 PHILLIPPINE 16421 1.30

Source: www.myanmartourism.org

Myanmar Investment Commission Notification No. 13/2017 (1st April 2017) In exercise of the power conferred under section 43 and sub-section 100 of the Myanmar Investment Law, the Myanmar Investment Commission has prescribed the investment promoted sectors with the approval of Union Government

Classification of Promoted Sectors 1. Providing services by construction of hotels and resorts (ISIC 55102) 2. Transport services for tourists and sight-seeing (ISIC 5011) 3. Eco-tourism business (ISIC 50111) Procedures /salient points for FDI in Hotels and Related Businesses

 100% foreign owned Build-Operate-Transfer (BOT) System.  Hotel Business can be done in JV with Government Organizations/ local citizens  Land Lease Period: Initial (50)yrs + extendable (10) yrs x (2) times with MIC’s permission  Construction Period: (2) to (3) yrs for phase 1 (2) to (3) phases  Land Use Premium: Depends on Location and Area of Land  Annual Land Lease Rental Fee: (5)% of Gross Income (or) Minimum Guarantee Payment whichever is higher. Procedures /salient points for FDI in Hotels and Related Businesses

 After having the agreement between the investor and government organization (or) private sector on the terms and conditions, the both sides have to draft B.O.T Contract and Lease Agreement.

 The draft BOT Contract- To be submitted to the Union Attorney General’s Office for legal advice.

 Need to submit proposal of the promoter to make foreign investment in Myanmar to MIC with the draft B.O.T Contract, Lease Agreement and other required documents. Procedures /salient points for FDI in Hotels and Related Businesses

 After having the Permission of Myanmar investment Commission, the BOT Contract and Lease Agreement shall be signed by the both parties.

 Apply for prior permission to establish Hotel Business from Ministry of Hotels and Tourism.

 Implement the construction of project.

 Obtain the license to operate the hotel business.