"Rising visitor arrivals, robust trading performance and positive market dynamics have put emerging Southeast Asian markets such as Vietnam, Cambodia and Myanmar back into the investment spotlight," Tom Oakden, executive vice president, investment sales, for Jones Lang LaSalle's Hotels & Hospitality Group, said at a recent industry event co-hosted with Ashurst, the international law firm.
Better infrastructure in many markets in Southeast Asia has enhanced the ease of travel and improved links to the rest of Asia, he said.
Double-digit tourism growth was witnessed in Vietnam (15 per cent), Cambodia (25 per cent) and Myanmar (55 per cent) last year, when compared with 2011.
"The affordability factor and capital growth prospects some of these markets offer, when bench-marked against other more mature Asia gateway cities that have seen huge appreciation in recent years, is also a driving factor," he said.
Oakden described Vietnam as a wonderfully diverse country with spectacular beaches, seven UNESCO World Heritage-listed sites and other cultural attractions.
Whilst the economy is in recovery mode, the medium- to long-term potential of Vietnam as an investment destination is being recognized.
This is evident in the sale of two Life Resorts properties in Hoi An and Quy Nhon to the Minor Hotel Group in February, he added.
Neighboring Cambodia, meanwhile, is on the cusp of real economic and tourism growth, with rising visitor arrivals and increasing foreign direct investment from countries such as South Korea, Vietnam and China.
With limited hotel supply in the key cities of Phnom Penh and Siem Reap and 443 kilometers of unexploited coastline, Cambodia is attracting the attention of both domestic and regional investors and developers.
The greatest potential lies in the Myanmar hotel market, which has benefited from a demand-supply imbalance to become one of the best-performing hotel markets in Asia, said the executive.
Operators are enjoying strong revenue-per-available-room growth from leisure and corporate travelers in hotspots like Yangon and Mandalay. However, until further foreign investment law is enacted and economic reform takes shape, it will be challenging to establish genuine hotel investment sales, he said.
That said, international hotel companies are doing their best to secure opportunities with domestic owners and developers. This includes Accor, which is developing three newly built hotels in Myanmar.
"As these dynamic markets undergo rapid development and growth, constant changes in the legal regulatory framework are expected, especially with regard to foreign investment.
" It will be interesting to observe how the legal regimes evolve as these markets mature and attract more interest from international investors," said Rhonda Hare, head of Ashurst's real estate and hospitality, tourism and leisure practice in Asia.
