John Low, a Partner at international consulting firm Roland Berger, reflects on how Myanmar can fully harness its tourism potential.
At 10 percent of the world’s GDP (or $7.9 trillion), global tourism is already a major economic generator in Myanmar. It continues to be driven by the growth of the middle class and the expansion of low-cost carriers. And nowhere in the world, are these growing faster than in right here in Asia.
Myanmar is geographically located at the centre of the action. Its tourism industry is in a sweet spot, with clear advantages such as vast latitudes and a diverse natural environment. And whilst its tourism industry is the smallest in size regionally, the anticipated growth rate at 8.5 percent (2016 - 2025) is the fastest.
While there has been tremendous interest in visiting a country that has recently eased tourist linkages, this – and other factors buoying growth – does not automatically spell positives for Myanmar’s tourism industry. Like every other tourism player, Myanmar’s attractions and tourism infrastructures will have to upgrade, hone and innovate in order to compete for visitors.
The country needs a big boost in its infrastructure to improve its connectivity and will to quickly train a sizable pool of tourism frontliners to overcome issues such as high indirect costs, trained tourism knowledge workers and addressing language barriers.
An analysis of the tourist lifecycle indicates that technologies that ease convenience are the backbone for beckoning tourists. From planning itineraries and booking accommodations, to capturing and sharing holiday memories instantly, connectivity and digital infrastructure are paramount. Using technologies, they can also communicate through translation apps, pay without the hassles of cash, or review an attraction on the spot.
This means that stakeholders must invest in their online presence, and not be afraid to experiment and learn from what will convert online interest to tourist Kyats. Their venture into cyberspace should not be merely confined to digital marketing, but digital sales too. Businesses must simplify the customers’ journey to purchase. For SMEs, leveraging technologies will not only help them reach more tourists – thereby raising revenues – it could make them more efficient, reduce costs and provide improved services.
There are clear guides that indicate revenue streams are not fully tapped. For instance, last year, almost two-thirds of arrivals in 2014 were day-trippers from neighbouring countries. If the right infrastructures and incentives are there, longer stays could be more common. Tourists from high-income nations – such as the UK and the US – constitute only a small percentage of tourists (3 percent and 5 percent respectively).
Additionally, to capture full potential, campaigns and promotions must target a diverse mix of tourists across all seasons. This could mean targeting tourists from Europe and Oceania to visit during their winters and tourists from tropical climates to visit during Myanmar’s cooler season, as examples. Last year, nearly half of tourist arrivals were driven by only six countries; this is a clear indication that large addressable markets have not yet been captured. Widening the mix of tourists also reduces risks from localised economic lulls.
Industry players must rally stakeholders beyond the current usual suspects, to get the most out of what Myanmar has to offer. Its cultural and natural assets must be put on a pedestal. Its traditional food must thrive and be lauded loudly. Its natural environment must be preserved, but at the same time managed sustainably, to capitalise on booming interest in ecotourism.
Finally, Myanmar’s tourism authorities and associations must collaborate with the private sector and neighbouring countries to develop distinct tourism corridors and linkages to Myanmar’s pristine countryside. The infrastructures must be made available to give tourists the opportunity to experience what’s been untouched for the last few decades. Extending tourism cross-country will have an added effect: it will traverse the trickle-down economics for the whole country, benefitting both rural and urban businesses and residents.
Above all, the sustainability of its tourism industry – whether in tourist numbers or quality of attractions – must be systematically planned centrally to avoid common mistakes, such as duplication of efforts and attractions, inefficacies and overdevelopment. Myanmar has diverse and extensive cultural, natural, and historical assets, which must be protected, particularly in the context of very high tourist growth rate (more than 50 percent growth 2014 - 2015).
There is much potential for Myanmar’s tourism to harness. If its long-term strategy and country positioning are well articulated and execution well timed, the tourism industry could be a large contributor to SME growth, spur job creation and foster inclusivity. If this sounds like a desirable pillar of growth for the country, then tourism authorities must plan ahead and book the best deal possible.
John Low works across Roland Berger’s Southeast Asia offices in the areas of tourism, digital and public sector consulting.