YANGON -- These are anxious times for Myanmar's tourism industry, as the country's international reputation takes a battering.

But shares in Myanmar tycoon Serge Pun's Memories Group -- which includes hotel construction and travel management services -- have defied the uncertainty.

The company's shares have risen 12.3% since their January 5 debut to 0.32 Singapore dollars on Monday, giving a total market capitalization of S$110.66 million ($83.8 million).

However, the company's successful stock market launch comes amid deepening shadows over Myanmar's tourism industry.

The country appears to be heading towards renewed isolationism as it denies access to United Nations' investigators keen to investigate accusations of human rights abuses against the Rohingya Muslim minority in Rakhine State.

News reports showing more than 655,000 Rohingya fleeing to Bangladesh in recent months, and growing international condemnation of the country's once widely admired de facto leader Aung San Suu Kyi, are believed to be deterring many westerners from visiting Myanmar.

The International Monetary Fund in November last year projected gross domestic product growth for the 2017/18 fiscal year at 6.7%, only slightly down from its previous forecast, but reflecting "uncertainties related to the Rakhine State crisis, particularly for tourism."

Despite the still-bullish forecast, Myanmar's tourism industry is worried. Some of the hoteliers, tour providers and travel agents that have enthusiastically entered the country since 2011 reported bookings down between 20% and 30% in the current tourist season, which runs from October to May, compared to a year earlier. Western tourists, increasingly, are staying away.

Pun's business, however, relies not only on Western tourists, but also courts visitors from Asian countries such as China, Thailand and Japan.

"It has always been our strategy to diversify and we take a systematic approach to penetrate the markets. Having successfully captured the West, we are now moving forward with our next phase and that is to penetrate Southeast Asian and East Asian markets," Memories Group director of sales and marketing Brenda Ho told the Nikkei Asian Review.

It was important to cater to diverse expectations in terms of food, attractions and the pace of travel, she said, adding that the company communicates with clients in their local language, even down to the variations of Chinese used in Singapore, Taiwan, Hong Kong and mainland China.

Human rights record

The wider tourism industry is also seeking to attract more visitors from markets seen as undeterred by growing western criticism of Myanmar's human rights record.

Much is at stake. Since Myanmar emerged from decades of military rule in 2011, tourist arrivals have grown 20% to 25% year on year, according to Oxford Business Group, a research and consultancy company.

The industry now accounts for 6.6% of GDP and created 800,000 jobs in 2016, according to the Myanmar Tourism Federation. It is also a vital source of foreign currency reserves for the government.

In August last year, Myanmar's military launched a brutal crackdown against the Rohingya Muslim minority in the wake of attacks by militants in northern Rakhine State. After reports of murder, rape and arson by security forces -- widely denied by the government -- both the U.S. and the UN accused Myanmar of "ethnic cleansing."

The violence is far from popular tourist destinations, including commercial hub Yangon, ancient capital Bagan, and scenic Inle Lake. But arrivals from Western Europe and North America at Yangon International Airport -- the country's main gateway for tourists --were down nearly 20% in December from the same period in 2016, according to the Myanmar Tourism Federation.

Phaung-Daw-Oo pagoda is illuminated at Inle Lake in Shan State in Myanmar.   © Getty Images

The decline could be attributed to concerns from tour operators about being associated with Myanmar's alleged human rights abuses, according to Oxford Business Group's Yangon-based editorial manager Tiago Coelho.

"As the UN, international media, and Western governments continue to condemn Myanmar's handling of the crisis in Rakhine State, the sector is at risk," he said. While 61% of visitors to Myanmar are from Asia, Western visitors tend to stay longer and spend more, he noted.

Industry members, however, told the Nikkei Asian Review that visitors from China, South Korea and Japan were holding steady, or increasing, as business from the West dropped off.

Around 65,000 more Asians arrived in Myanmar through Yangon International Airport in 2017 compared to 2016. Two major Myanmar travel agencies told the Nikkei Asian Review they had served more Asian customers in the last few months.

Ctrip, one of China's largest travel operators, said Chinese tourists were looking to experience the ancient Buddhist sites of Myanmar and the country's cuisine.

May Myat Mon Win, a vice chairperson of the Myanmar Tourism Federation, said Yangon's burgeoning nightlife -- with high-quality restaurants serving regional cuisine and glitzy karaoke bars -- was tempting Asian tourists.

More Japanese visitors

The number of Japanese visiting Myanmar continues to rise as more high-end accommodation opens, the number of flights increases, and Japanese tourists look towards new "frontier" destinations, according to an official at the Japanese Embassy in Yangon who declined to be named.

The Japanese had a "different" way of viewing the Rakhine crisis compared to Europe, he said.

Coelho from Oxford Business Group put the contrasting attitudes in the West and Asia partly down to different "cultural and political values," with Asian societies typically showing more respect for social hierarchy and the state, rather than the individual.

"In terms of politics, Asian countries subscribe to national sovereignty and non-interference. These are two founding principles of the Association of Southeast Asian Nations," he told the Nikkei Asian Review.

Travel consultant and writer on Myanmar tourism Jaffee Yee said tourists from Asian countries do not necessarily weigh up moral issues about human rights abuses when choosing their vacation destinations.

The Chinese "care more about security. If it is safe to go there, they are fine."

At a China-Myanmar tourism promotion workshop hosted by the tourism ministry in Yangon late last year, Khin Aung Htun, vice chairman of the Myanmar Tourism Federation, said the impact of the Rakhine crisis would take years to overcome, according to local media reports. So the target for tourists had shifted to China and Southeast Asia, he said.

His colleague May Myat Mon Win urged the government to extend its visa-on-arrival program to more Asian countries. Visits from ASEAN countries, except Malaysia, are currently visa-free for 14-day trips.

She also urged the government to develop cultural attractions and theme parks, and spend more on marketing in Asia.

In December, regional ministers from five of Myanmar's states went so far as to urge the government to allow casinos to operate in their states -- banned under the country's 1986 Gambling Law -- with the aim attracting high-end tourists from China, Japan and Thailand.

Government officials appear increasingly aware that the Rohingya crisis is damaging the country's image, and poses risks to the tourism industry. They have stepped up denunciations of what they term "fake news" on abuses in Rakhine.

"Those who are concerned with tourism are obliged to refute fake news that can damage the image of the country, as the development of the tourism industry depends upon the image of the country," Vice President Henry Van Thio told state media in December.