Welcome to Burma – 2011's hippest holiday destination

Travellers are poised to return after Aung San Suu Kyi's release

Despite the lure of its gleaming pagodas, fabled cities and pristine beaches, military-ruled Burma has been off the tourist map for years, shunned by conscientious travellers who feared that visiting the country would help only to prop up one of the world's most oppressive dictatorships. But with the release late last year of the pro-democracy leader Aung San Suu Kyi, whose calls for a tourism boycott have long kept holidaymakers away, travel industry experts are cautiously hopeful that foreign visitors might once again beat a path to one of south-east Asia's unspoilt gems.

Accolades such as being named Wanderlust magazine's "top emerging travel destination of 2011" should help to propel Burma from a tourism backwater to an exciting new destination – although activists warn that the nation needs to make a lot of progress before becoming a guilt-free holiday paradise. "Burma needs to be visited with care. But those who do visit carefully... inevitably return with exceptional memories," said Wanderlust in its award citation. "There are the sights, natural and man-made – the stupa-studded plains of Bagan, Yangon's giant golden pagoda, the floating gardens of Inle Lake – but it's the resilient and welcoming Burmese people who create the lasting impression."

Burma – still in the grip of dictatorship, despite holding its first elections in 20 years last November – has far to go if it is to seriously compete with its Asian neighbours as a tourism destination. Last year, more than 300,000 tourists visited the country, according to the Bangkok-based Pacific-Asia Travel Association. That was nearly a 30 per cent increase on the year before, but still a trickle compared to the 15 million who visited Thailand and 17 million who went to Malaysia.

Ms Suu Kyi's National League for Democracy (NLD) party first called for tourists to boycott Burma – or Myanmar as it is officially known – in 1995 in response to the junta's "Visit Myanmar" campaign and amid reports of forced labour being used to build new airports and luxury hotels. The boycott campaign was particularly effective in Britain, where travellers were happy to bypass Burma in favour of Thailand, Laos and Cambodia – a sentiment that was reinforced by the bloody suppression of the Burmese monks' protests in 2007, followed by the regime's callous response to the devastating Cyclone Nargis in May 2008.

But the release of Ms Suu Kyi from house arrest last year, following a peaceful, albeit fraudulent, election, has already improved Burma's image in the eyes of tourists, those in the industry say. "The release [of Ms Suu Kyi] and peaceful elections has given tourism quite a substantial boost," said Brett Melzer, an Australian who, with his Burmese wife, owns Balloons Over Bagan, a private company that takes tourists on hot air balloon rides over the ancient temple city. "We are seeing an increase in numbers right across the board, but big increases from the US and the UK – which were traditionally opposed – and the emerging markets of Russia, Brazil, Mexico and Australia from almost zero a few years ago."

Since her release, Ms Suu Kyi says she is no longer in favour of a total boycott and that some tourism could be beneficial. While package tours and cruises should not be encouraged, she believes, "individuals coming in to see, to study the situation in the country might be a good idea".

Those who do come to Burma find gentle, hospitable people and a wealth of attractions: Rangoon's fading colonial grandeur, the romance of Mandalay, windswept beaches on the Bay of Bengal, stilted villages on Inle Lake and the stunning temples of Bagan on the banks of the Ayeyarwaddy River. Burma's relative underdevelopment and the absence of global brands, cash machines and fast internet, is marketed as a "step back in time" or "a glimpse of authentic Asia". Most Western tourists try to avoid government-owned hotels in favour of family-run establishments, following the advice given in guidebooks such as Lonely Planet, so as to hand as much of their tourist money as possible to ordinary Burmese, who are not associated with the government. But with hotel taxes, admissions charges and airport duties, it is impossible to visit Burma without paying something to one of the world's most brutal regimes.

One of the largest domestic airlines is owned by Tay Za who, according to the US Treasury Department, is "an arms dealer and financial henchman of Burma's repressive junta". Nor can tourists avoid being corralled into a fairly small number of sites, as much of Burma remains off-limits, such as the sensitive border areas inhabited largely by ethnic minority groups and the Ayeyarwaddy Delta, the area that took the full force of the 2008 cyclone.

Mark Farmaner, director of the Burma Campaign UK, which highlights abuses by the regime, said: "No one should be under the illusion that the release of Aung San Suu Kyi means that there is any positive change in Burma, there isn't. Horrific human rights abuses continue to be committed by the dictatorship."

Nevertheless, visitors are often surprised by the warmth and friendliness of locals and their willingness to talk and joke about the deficiencies of their government. It is far from the downtrodden, repressed image that many have of Burmese people.

"We don't want to be cut off from the world," said Htay Oo, an unofficial tour guide and taxi driver in Rangoon. "We want people to come. We can learn from them and they can learn from us. If they stay in their country, how does that help?"

what the guidebooks say

The Rough Guides group, which unlike Lonely Planet refuses to publish a guide to Burma on ethnical grounds, says it has no plans yet to reverse its stance.

"We're greatly heartened by the release of Aung San Suu Kyi and hope this will ultimately help open Burma to travellers. However, we think it is too soon for a complete change of mind," said Clare Currie, the company's publishing director. "We are not currently planning to publish a guidebook to Burma – such a guide would really depend upon sustained improvements in the political situation as well as on a proven and robust travel infrastructure."