The traditional business model that they have been following for decades is not working for travel and tourism companies in Myanmar anymore. As telecommunication sector is improving and internet is becoming readily available to the people of Myanmar, local tours and travel companies are finding it hard to compete with the websites offering online bookings. Most of these websites are foreign owned, and they are making a huge dent into the market share of local companies. Foreigners prefer booking online in advance as they do not like relying on local tour and travel companies.
The huge discounts provided by the websites are a big factor responsible for this paradigm shift. Hotels are more willing to give higher discounts to websites as they provide a much higher volume of business. They are reluctant in offering similar discounts to local travel agencies and sometimes the difference in price can go as high as 40 percent. A major cause of concern for the tour and travel agencies located in Myanmar is that the cost of accommodation and other related services here is surprisingly higher than the neighboring countries such as India and Thailand. Most tourists have become accustomed to inexpensive hotel stays in south Asian countries and the higher prices in Myanmar come as an unpleasant surprise to them.
The price of accommodation and food in Myanmar is comparable to that of a developed country like Japan. That is why most people who visit Myanmar try to cut down the costs as much as possible by checking out the different options online. Some of the local travel companies have built somewhat of a reputation for themselves by being in business for years. These companies might be able to withstand the competition from foreign websites but for the new companies it has become very difficult to survive.