Diethelm lashes out at 'shortsighted' Myanmar hotels - TTG Asia - Leader in Hotel, Airlines, Tourism and Travel Trade News
 
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Diethelm lashes out at 'shortsighted' Myanmar hotels
Raini Hamdi, Singapore, May 4, 2012
 

DIETHELM Travel Group, a pioneer tour operator in rising destination Myanmar, has lashed out at "shortsighted" hotels in the country which are reneging on contracts as supply and demand goes out of the kilter.

 

Diethelm CEO, John Watson, said some hotels were "tearing up their contracts and re-negotiating each booking – upwards", given the current high level of demand for Myanmar from both the corporate and leisure sectors.

 

Inbound operators are unable to absorb the rate increases as they work on thin margins and rising costs, while overseas operators who supported Myanmar through the difficult years feel their loyalty is not being rewarded, he said.

 

Increasingly, hotels in Myanmar are also insisting on pre-payment of rooms for high season, which means significant changes to the current arrangement which is basically open credit, according to Watson.

 

"Inbound tour operators are hard-pressed to fund this investment from free cash flow, and will need to make back-to-back arrangements with overseas tour operators who send them business. All this leads to additional administration and cost burdens," he explained.

 

Diethelm started operations in Myanmar in early 1996 and has offices in Yangon, Mandalay, Bagan and Inle with over 50 multilingual staff.

 

 

– Read the full interview in TTG Asia, May 18, 2012 issue

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COMMENTS
The travel industry hasn\'t changed in years and never will. When there is a a need for business the operators squeeze the suppliers and when there is a lot of business the suppliers squeeze the operators. Like in employment, for the most part today, the same holds true with the supplier / operator relationship ... loyalty for the most part is NEVER rewarded. Is this right, no!! But it is a fact of life. Everyone tries to drain the last bit of profit out of the other person ... contracts, unfortunately in the travel business, have little worth if one thinks about it. I would imagine that if D Travel Agency had a contract with X Hotel and then everyone in the hotel market was lowering rates because business had soured, D Travel would require X Hotel to reduce their rates or loose the business ... but probably D Travel would keep the same package price and gain greater profits. That\'s life ... I don\'t care for it being done that way but it is. Everyone should stop complaining and get on with the business.
Posted by: Kent Maury
05-05-2012 11:14:26
I can only agree with what Diethelm says. The issue is not the increase in rates. We all understand the supply and demand situation, and it\'s only normal that rates increase. The point is that those increased rates are not guaranteed. Some hotels issue contracts then take them back. Some hotels don\'t want to guarantee rates for bookings already confirmed. The industry needs guaranteed rates for the contracted period and guaranteed rates for confirmed bookings. This should be the business practice.
Posted by: Laurent Kuenzle
08-05-2012 11:35:39
 
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