After unveiling its first Myanmar property in Nay Pyi Taw, Berlin-based Kempinski Hotels AG will expand to Yangon by 2016, according to Thailand’s Siam Commercial Bank.
The bank announced it was lending US$60 million to transform a heritage building in Yangon into a Kempinski Hotel.
The renovation of the building will be conducted by Thai-based Kanok Furniture and Decoration and Myanmar’s JL Group.
“The renovation … is in preparation for tourism and service-industry growth in Myanmar, with the project slated for completion by 2016,” the bank said.
Its largest shareholder is Thailand Crown Property Bureau, which administers the property of the Royal House of Thailand and has holdings in numerous companies in Thailand and abroad. It has had a majority stake in Kempinski AG – which describes itself as the world’s oldest chain of luxury hotels – since 2004.
The lending contract was signed recently at the bank’s headquarters in Bangkok, with Thaug Htike Min, vice chairman of JL Group, and Supalak Foong, director of Kanok Furniture and Decoration, attending.
Kanok Furniture has provided interior decoration services to more than 200 hotel and serviced-apartment projects. With a strong portfolio of projects in Thailand, it is now stepping overseas with major projects in several countries including Cambodia, China and India. In Myanmar, it has secured three interior decoration projects – Escape Avenir Serviced Apartment, Micasa Hotel and Service Apartment and YKK Gold Hill Tower. All are in Yangon.
JL Group vice chairman Thaung Htike Min was quoted in Myanmar media recently as saying that the building was the Small Claims Court on Strand Road. He also said the hotel would open in 2017 with 239 rooms, and is expected to create about 500 jobs.
International hotel chains are flocking into Myanmar, which is drawing new investment and visitors. Low supplies mean high hotel room rates, which according to New Crossroads Asia, a Singapore-based financial advisory firm, are unlikely to fall soon.
Its report “All That Matters” showed that Myanmar’s hotel room rates, which average about US$160 per night, should remain unchanged in the medium term due to the slow completion of new properties and escalating influx of visitors. The hotel occupancy rate in the country is about 80 per cent.
According to the Ministry of Hotels and Tourism there are only five five-star hotels and 18 four-star hotels in Myanmar. Yangon has just 204 hotels, with a total of 9,000 rooms, data from the ministry shows.
Under the Myanmar Tourism Master Plan, 7.49 million tourists are expected to visit annually by 2020, more than double the 3 million expected this year. They are expected to generate more than $10 billion in revenue.