
Authorities in Burma have introduced a US$150 maximum price foreign-owned hotels can charge for the basic room per night. The move has proved unpopular and been contested by hotel groups, some of which are refusing to comply with the new regulations.
The Ministry of Hotels and Tourism has placed a ceiling on the basic hotel room rate, applicable to all foreign-owned hotels in the industry. The introduction of a $150 cap was sparked by rapid inflation in the hotel sector as hotel groups took advantage of Burma’s new popularity as a tourist destination (the country saw around 390,000 foreign tourists in 2011), with room rates increasing by as much as 200% in some cases.Many hoteliers have responded to the new cap in the basic rate by increasingly classifying rooms as “luxury,” since the cap does not apply to these. Critics say the move will only discourage investment in Burma and that instead the government should tackle the problem of a shortage of rooms in the market by expanding supply. Currently there are 25,358 registered rooms in Burma.Saman Sarathchandra, General Manager of Singaporean-owned The Sedona Hotel Yangon, is facing extradition after refusing to comply with the new measures and continuing to charge up to $220 a night for the basic room. Some general managers on the other hand have welcomed the move, saying the tourism industry as a whole was suffering from the prohibitive higher prices.
