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Foreign brand-hotels find home in Laos

Written by John Guzman

Tourism and hospitality industries in Laos are just beginning. Most hotels in the capital Vientiane are located along the banks of Mekong River or nearby areas. Tourists can be seen hanging out along the banks of the river at night. This week Vientiane welcomed tourists by few water games, as the country celebrates the Lao New Year called locally Pii Mai. Locals welcome their new year by throwing water at friends and passersby for three consecutive days. The three-day New Year event was celebrated from April 13 to 15.

Although foreign tourists are increasing, the number remains low compared with its closest neighbor Thailand. The link between demand for hotel rooms and tourist arrivals is inseparable.

Hotels in the capital do not offer much variations and luxury accommodations are considered rare commodities. This might be changing, as of last year, Laos was granted membership in World Trade Organization (WTO), which means the country now stands to gain benefits, through favorable trade terms and increased market access for its goods among many others.
The country can also benefit from such growth to develop its transportation sector. Currently, the only mean of transportation within the capital is a three-wheeled vehicle locally known as ‘jumbo’. Taxis are limited to airports and buses are almost non-existent.

Vientiane known for being a quiet city, with no Skyscrapers like its ASEAN counterparts. However, this could change very fast as Laos prepare for the ASEAN Economic Community in 2015.

According to Vietnam Investment Review, the Vietnamese Hoang Anh Gia Lai Group (HAGL) is set to open its second hotel in the country. HAGL invested USD 16.5 million in the venture. The four-star hotel will house a total of 185 rooms and will open its doors on the upcoming July according to schedule.

In another development, Thailand’s leading hotel operator Centara Hotels & Resorts recently announced its plans to build a five-star hotel with 200 rooms in Vientiane, a move to further expand the overseas markets. The hotel is set to open in 2017, according to Hospitality Net.

The relatively new membership in WTO, leading to more business opportunities, might be a significant game changer for the accommodation business in the country. Laos had already hosted the Asia Europe Meeting (ASEM) in 2012. This could only be succeeded by many other important and large-scale international events.

The Laos Investment Review reported, foreign tourist arrivals increased 40% in 2013, accounting for a total of 2.8 million. Statistics from the Ministry of Information, Culture and Tourism.

Laos could very well increase these numbers by offering tourists in neighbouring countries easier access to visit Laos. Where a short plane trip could be all that it takes from Thailand. Future investors in the accommodation business will also have to accommodate not only tourist seeking luxury but also foreign backpackers touring ASEAN.

–Edited by Mohamed P.Hassan

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