Solid strategy could lift Myanmar's tourism sector to new heights

19 August 2016

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. 

Myanmars tourism industry is in a sweet spot

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.

Tourism in Myanmar

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.


Women remain underrepresented in UK's hospitality industry leadership

12 April 2019

Female engagement at the top level of the UK hospitality industry is still lagging, with the vast majority of decision-making roles continue to be held by men. Only 7% of the industry’s FTSE 350 CEOs are women; however, the pay gap in hospitality and leisure is far better than in other industries, at a median of approximately 7%.

The hospitality, travel and leisure (HTL) sector is one of the UK’s largest employers, with 3.2 million people working in its segments. Despite a poor 2018 in terms of tightening consumer spending, the industry is still one of the top sectors in terms of economic activity, hitting £130 billion last year – besting the UK’s automotive, pharmaceutical and aeronautical sectors’ combined activities.

While the industry is one of the country’s largest employers, it still faces considerable issues around diversity at the top. New analysis from PwC has explored the matter, as well what initiatives the industry has engaged to open up its top ranks to a more diverse background.

Female representation at board level for UK companies and HTLs

According to a survey of CEOs, Chairs or HR Directors of over 100 of the most significant leisure businesses across the UK, the hospitality industry has a relatively male-dominated top level. This lags behind the FTSE 100, where companies have female board level representation at 32.2%. Meanwhile, the figure for the combined executive committee and direct reports stands at 28%. This is well above FTSE 250 levels, where female board level representation stands at 22.4% and executive committee & direct reports stand at 27.8%.

For the hospitality industry as a whole, board level representation came in at 23.6%, with FTSE 350 for the industry performing slightly better at 25.1%, while non-listed companies performed considerably worse at 18.2%. The firm notes that the figures hide that while some companies are making strides to improve equality, others are not moving forward – with the positive result reflecting more often the good work of some, while others are not taking the issue seriously in their agenda setting.

Blind spot

The study states, however, that while the overall numbers are relatively strong, the industry has a number of acute weaknesses. These include CEO numbers, with only 7% of HTL FTSE 350 companies helmed by women and 11% of non-listed companies led by female CEOs. Meanwhile, female chairs at FTSE 350 companies for the sector stand at zero. In terms of wider diversity representation, only 1 in 33 leaders at industry companies is from a BAME background.

Pay gap for HTL and hospitality

The report noted discrepancies between FTSE 100 companies and FTSE 250 in terms of improving the number of women at executive level. The majority have met the Hampton-Alexander Review target of 33% women at board level, up from around 25% in 2016. However, the remaining ~40% are not on target, and are unlikely to meet the target by 2020. A similar trend is noted when it comes to executive committee and direct reporting numbers.

Jon Terry, Diversity & Inclusion Consulting Leader at PwC, said, "To make real progress in diversity and inclusion, businesses need to elevate it onto the CEO’s agenda and align diversity & inclusion strategy to the fundamentals of the business."

Tracking progress FTSE 250 level

However, one area where hospitality travel and leisure companies are outperforming other companies in the wider UK economy, is the mean and median pay gap between men and women. PwC found that the median of the wider UK economy comes is approximately 14% – with upper quartile companies noted for a gap of low 20%, and lower quartile companies noted for differences of around 2%.

The median pay gap for HTL comes in at well below 7%, with the median close to parity. There are considerable differences, however, with hospitality at 7%, while travel comes in considerably higher, at 22%. The latter figure reflects fewer women in higher paid pilot and technical positions within the industry.