Amata Holding Public Company prepares to list on the Yangon Stock Exchange (YSX) to strengthen its investment in the tourism industry which has great potential for growth

27 Aug 2018

U Win Aung, CEO of Amata Holding Public Company, is preparing to list his company on the Yangon Stock Exchange (YSX) to take full advantage of the upcoming opportunities he believes lie ahead for the Myanmar tourism industry. 

“There are actually many multi-national companies looking to invest in tourism as the industry holds great potential for growth. But it is still a very immature industry so foreign investors are all monitoring the progress on the sidelines until they are ready to enter,” U Win Aung told The Myanmar Times in an interview. 

U Win Aung, CEO of Amata Holding Public Company, is preparing to list his company on the Yangon Stock Exchange (YSX) to take full advantage of the upcoming opportunities he believes lie ahead for the Myanmar tourism industry. 

“There are actually many multi-national companies looking to invest in tourism as the industry holds great potential for growth. But it is still a very immature industry so foreign investors are all monitoring the progress on the sidelines until they are ready to enter,” U Win Aung told The Myanmar Times in an interview. 

“We want to secure our position and expand our presence in this industry so we can be ready to cooperate with the big boys when they enter the country. We also changed our status to public in anticipation of the new regulations under the Companies Law which allows foreigners to invest up to 35 percent in public firms,” he added.

Amata Holding operates four hotels and resorts in Bagan, Inle Lake and Ngapali under the Amata brand. It also runs its Oriental Ballooning hot-air balloon services in Bagan, Inle Lake, Mandalay and Ngapali. 

The company, which started out as a family business in 2003, first applied to the Securities and Exchange Commission of Myanmar (SECM) to  conduct a public offering in 2016. It is now in the midst of completing the two-year process to qualify as a public-listed company on the YSX and is  one of the four companies under the SECM's List of Approval of Public Offering.

In fact, Amata Holding had initially sought a listing on the Singapore Exchange but changed its mind after YSX-listed First Myanmar Investment Company brought its tourism arm, Memories Group, to market on the Singapore bourse in January. 

“As there is already another Myanmar tourism group listed in Singapore, we decided to list on the YSX to tap investors here instead,” said U Win Aung.

Expansion plans

If all goes according to plan, Amata Holding will come to market with a fat pipeline of new hotel projects. It is now building new Amata hotel resorts of between 30 and 80 rooms at the Poni and Balar islands in the Myeik archipelago, which is expected to be complete in 2019.

It is also building a string of budget hotels in Pindaya, Kalaw, Hpa-an, Pyin Oo Lwin and Malawmyine under a new brand, Awinka. These will be complete in two years. 

Over the longer term, Amata Holding is aiming to open five Amata brand residences in Pidaya, Kalaw, Yangon, Hpa-an and Chin State . It is also planning to expand into wellness centers, bars and restaurants, sight-seeing services, booking websites and aviation.

The company is going public at a trying time for the tourism industry though. According to data by the Ministry of Hotel and Tourism, Myanmar received 1.72 million tourists as at June 30, which is a decline of over 300,000 when compared with the same period in 2017.

In an interview with The Myanmar Times, U Naung Naung Han, secretary of the Union of Myanmar Travel Association, said the number of Myanmar tour companies with a US and European client base is expected to decline by a further 30pc-50pc in the coming years as a result of the ongoing conflict in northern Rakhine. 

Amata Holding itself has seen the occupancy rate at its hotels drop by 20pc since the Rakhine crisis broke out in August last year. 

Good prospects

Still, U Win Aung is positive about the longer term prospects for the industry. “The current situation in Myanmar has no doubt been affected by the Rakhine crisis since last year but the industry won’t always be struggling over the long-term,” he said.

The way he sees it, other factors, such as political instability, natural disasters or an epidemic are just as likely to affect tourism anywhere in the world. “Whatever the case, we are always looking forward and what we see is this industry holds huge potential for growth and foreign investments,” he said. 

Even though there has been a drop in the number of western tourists, demand for hotels from Asian and Middle Eastern visitors as well as local travelers is still on the rise. “The proportion of tourists to Myanmar is usually 70pc from Asia while the remaining are from the US, Europe and Russia. And so we should not assume the entire tourism sector is declining,” he added.

What’s needed for the sector to expand further though is advanced planning and the political will to develop new infrastructure now in anticipation of a recovery in the industry in the future. 

“The tourism industry has suffered due to the unexpected Rakhine crisis in recent years but it will eventually recover. That is why the government needs to start building the necessary infrastructure now,” U Win Aung said.

In Myanmar, one of the problems for the tourism sector is that tourists typically do not stay long in the country. This is because there is a lack of activities and transport options available. “The private cannot develop this alone. The government needs to understand the situation and commit to drawing tourists into the country,” he added.

So far, the government has been taking small steps to improve the country’s railway, said U Ohn Maung, minister of the Ministry of Hotels and Tourism. “We are buying new wagons and railway locomotives to build new railroads and extend the existing system. After this is complete, we can start do conduct tourism activities involving the trains,” he said.

U Ohn Maung added that his ministry is cooperating with other government ministries to execute better options for tourists.”We are negotiating with the related ministries as some projects are hard to implement without the other departments onboard. If we can all work together, tourism in Myanmar can be a huge success within 2-3 years,” he said.

 

(The Myanmar Times: https://www.mmtimes.com/news/amata-holding-preps-ysx-listing-back-strong-tourism-potential.html )