THE MAJORITY of foreign-owned hotels in Yangon have started complying with a government directive to scale back their exorbitant room rates, but locally-owned hotels have sniffed out a potential loophole and are starting to raise prices.

The ministry implemented a US$150 rate cap for hotels under its Foreign Direct Investment scheme on June 25, following complaints from local and international travel firms about indiscriminate room pricing (TTG Asia e-Daily, July 6, 2012).

“Relations with foreign hotels are now quite okay. But there is a problem with local hotels,” said Ma Sabei Aung, managing director of Nature Dream Travel & Tours, adding that recent rate hikes had occured at Mya Yeik Nyo, Mingalar Garden, Summer Palace, Clover and Green Hill hotels.

According to Kerstin Jung from Gracious Myanmar Travel, rates at some locally-owned hotels in Yangon were now three to four times higher than a year ago.

“I’m really not sure if (the rate hikes) are a healthy development for the tourism industry. To be honest, many local hotels just don’t want to work with (travel consultants), and some of the hotels aren’t really suitable for foreign guests,” she said.

U Tin Soe from Joyful Jupiter Tours said he had booked several rooms at Mya Yeik Nyo Royal Hotel for group tours in October and January 2013. Although he had earlier received confirmation from the hotel that the single/double room rate would be about US$70/US$80 per night, he was later informed that prices had increased significantly.

“The single room rate had almost doubled to US$120, and double rooms were now US$180. How can I do my business with these skyrocketing prices?” he lamented.