Starwood Hotels & Resorts Worldwide, the corporation behind the Sheraton brand, has announced its first Myanmar outpost will open in 2017.
The Sheraton Yangon Hotel will be the country’s first of its kind, as US sanctions had previously deterred Starwood from doing business in Myanmar.
The hotel’s construction – including the price of land – on U Htun Myat Road near Kandawgyi Lake will come to about US$50 million, funded in full by the property’s owner, Family Business Group Hotel Limited. Meanwhile, Starwood’s Asia Pacific branch signed an agreement in January with the local Myanmar firm to build and run the hotel, according to the company.
Family Business Group Hotel Limited first laid the foundation on the U Htun Myat Road property in 2011, according to U Ko Ko Latt.
However, the company struggled to find the right operator for the future hotel. It hoped to partner with Starwood, but the US-based company could not enter Myanmar under sanctions, according to U Ko Ko Latt. The situation changed as restrictions eased, and Starwood became more comfortable with the partnership after it completed due diligence.
“Starwood inquires about the director’s biography. Who is … an ex-government officer or what?” he said. “They check backgrounds and then they support our project.”
This past January, Starwood Asia Pacific Hotels & Resorts Pte Ltd and Family Business Group Hotel Limited signed an agreement in Singapore which established Starwood as the hotel’s manager. It will receive operator fees but has no equity stake in the hotel.
Construction is under way on the property and due to wrap in January of 2017. The hotel will open its doors six months later on July 1, according to its website.
The 5-star, 16-storey hotel will offer guests – often European business travellers, according to U Ko Ko Latt – 375 rooms, plus two restaurants and a lounge bar, the website said. Starwood will supply the employees needed to run the establishment.
The company’s announcement comes as Myanmar gears up for banner years in its burgeoning tourism sector. Four million people have visited the country in 2015, according to a Starwood press release.
The firm views Myanmar as an untapped market, which could offer avenues for expansion. Starwood’s current footprint in the Asia-Pacific region includes 73 hotels and 37 resorts, according to a press release.
“Touted as Asia’s final frontier, Myanmar presents immense potential for rapid growth,” said Lothar Pehl, a Starwood Hotels & Resorts Asia Pacific senior vice president, in a statement.
Family Business Group Hotel Limited is also exploring its options for expansion. The company has bought more than 8 acres of land in Chaungtha beach resort and has considered moving into Mandalay as well, with both areas offering prospective sites for more Sheraton hotels.
Looking ahead, U Ko Ko Latt predicts that the American brand’s arrival on the scene could increase wider confidence in the Myanmar market and drive further investment.
“Other investors will also have trust because Starwood is already in Yangon,” he said. “They’ll say, ‘Sheraton is here, why aren’t we going there?’ So this is one thing that is also very good for the country.”
Source: Myanmar Times