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