International hotel chains have descended on Myanmar but that has not deterred one local chain, Clover Hotels Group, from aiming to open 15 hotels in 10 years.
“Most of our hotels will be opened in Yangon but we hope to open at least one hotel in each of the major tourist destinations,” managing director Nay Zaw Aung told The Nation.
From three hotels in Yangon now with a combined 206 rooms, the group plans to expand its network to Mandalay, Bagan, Taunggyi, Kayah State, and a beach – either Chaungtha or Ngwe Saung.
The fourth Clover hotel is slated to open in mid-2016, adding 153 rooms to the group’s portfolio.
Nay Zaw Aung’s father opened the Panda Hotel in Yangon in 1998. After graduating with a degree in medicine, Nay Zaw Aung entered the hotel industry in 2009 when he started working at the hotel.
He decided to start his own business a year later with family funding, and the first Clover hotel opened in June 2011 under a boutique hotel concept.
“Late 2011, Daw Suu [Aung San Suu Kyi)] was released from the house arrest and Myanmar’s political landscape started to change a bit. It was the perfect timing to start the brand,” said Nay Zaw Aung.
Since its opening, the first property in Bahan Township has enjoyed an occupancy rate of over 95 per cent, as international investors and travellers flock to the country.
The result was encouraging for the young entrepreneur. And luck was on his side, allowing him to buy land on 32nd Street in Yangon at the back of the Sule Shangri-La Hotel. The second property, the 82-room Clover City Centre opened in October 2012. It was designed to lure guests pursuing convenience at economical prices.
The third property, the 74-room Clover City Centre Plus, opened in April 2013 on the same street. It targets long-stay guests.
The properties’ average occupancy rate in the high season from November to February is about 90 per cent, peaking at 99 per cent. From March to September, its occupancy rate is between 40-60 per cent.
This year’s occupancy rate has fallen by about 15 per cent from last year, as the nation’s economic activities slowed ahead of the general election on November 8.
Nay Zaw Aung is not shy about trying new things. The fourth property, slated for launch late this month, will offer 33 serviced apartments and 20 hotel rooms in the first phase. It will feature facilities like a gym and a swimming pool. Upon completion, it will offer 153 rooms.
“All our hotels are doing really well. We aim to attract both leisure and business travellers. Currently, about 90 per cent of our guests are foreigners,” he said.
He admitted that the standard room rate of 50,000 kyats (Bt1,374) a night is a bit too high for most locals at the moment. But he is optimistic local purchasing power will rise in tandem with economic growth.
He is also optimistic about his own venture, which reaped up to US$3.5 million (Bt125 million) in gross revenue last year.
The revenue should rise by 15 per cent next year, he said, thanks to the better political climate after the Suu Kyi-led National League for Democracy won the election.
He is looking at ways to fund the business expansion with new financing means, aside from creating a franchise and management model.
He believes quality, consistency, and concept are the keys to success, aside from location and service quality.
“A good location cannot be substituted with anything. As a local businessman, we know the best location. If we have a land plot in a good location, then we can fully concentrate on service quality,” he said.
“Local knowledge is our significant strength. We need to create a brand image first. And we need to be consistent.”