Bangkok protest loses country 233 million dollars in tourism revenue

Bangkok, May 1, 2010
DPA

Anti-government protests that have taken over Bangkok’s chief commercial district have already cost the country an estimated 233 million dollars in forfeited tourism revenues, media reports said Saturday.

Followers of the United Front for Democracy against Dictatorship (UDD), also called the red shirts for their trademark protest attire, have been staging rallies in Bangkok since March 12 calling on the prime minister to dissolve parliament and hold new elections.

On April 3 the red shirts occupied Ratchaprasong Road in the heart of the capital’s commercial district, forcing scores of posh shopping centres and five—star hotels to shut over security concerns.

The protests, which have claimed 27 lives and left more than 900 people injured in clashes between troops and red shirts this month, are starting to have their toll on the country’s tourism sector, still Thailand’s leading foreign exchange earner, the Bangkok Post reported, citing government figures.

In March, 1.34 million foreign visitors arrived at international airports in Bangkok, Phuket, Hat Yai and Chiang Mai, down 4.6 per cent compared with March 2008, according to data compiled by the Tourism Authority of Thailand (TAT).

In April, arrivals slumped 21 per cent compared with 2008 figures. The TAT compared 2010 arrivals to 2008 figures, the most recent “normal” year for tourism, prior to last year’s downturn as a result of the global financial crisis.

Revenues for tourism expenditure fell by 7.5 billion baht (233 million dollars) during March and April, compared with 2008 expenditures, TAT estimated. TAT governor Surapol Svetasreni said the downturn will force the agency to lower its target for 15.5 million tourists this year, compared with 14.4 million in 2009 and 14.6 million in 2008. A new estimate will be announced after the end of the protest, which is nowhere in sight.

Cambodia Has to Cope With its Global Connection

Global misery: Cambodian women workers, who once benefited from foreign orders for garments, are now facing unemployment. (Photo: Anne-Laure Porée)

Once the poster child for the benefits of globalization, Cambodia is now being asked to cope with its darker side in the aftermath of the financial crisis. The four pillars of the country’s economy – tourism, garment-making, construction, and agriculture – are feeling the global pinch in their various ways, writes journalist Anne-Laure Porée. Tourism is down thanks to the global stay-at-home vacation trend. Garment-making has collapsed due to lower US demand and choosey shoppers. Construction, like the rest of the world, plummeted with knock-on effects in consumer banking as rising unemployment led to greater personal loan defaults. Even agriculture, which could still provide positive growth in 2009, faces the uncertainty of weather and the challenges of foreign investment choking off local farmers. Perhaps the only ray of light is the natural resource industry – a sector that has long promised to provide limited value-added components to the economy. The sad part of this story is that the government seems content to wait for a rebound in the global economy, hoping the rising tide abroad will lift Cambodia’s boat. But as Porée notes, to integrate fully into the world economy, Cambodia has to learn how to be more than a supplier of garments based on cheap labor. – YaleGlobal

Waiting for a rebound, Cambodia needs to be more than dressmaker to the world

11 August 2009
By Anne-Laure Porée
YaleGlobal

PHNOM PENH: Defying the gloom descending on the tourism sector brought about by the global crisis, the capital’s airport recently launched a hopeful initiative: a new airline. Cambodia Angkor Air was launched to boost tourism between the capital and Siem Reap near the famed ruins of Angkor Wat. With tourist arrivals falling sharply since late last year, this may signal a triumph of hope over reality. If anything, the hopes and fears surrounding Cambodia’s tourist revenue and garment trade underline how the fortune of the country has become intertwined with the larger world.

Since peace came to Cambodia in the last years of the last century, the country has emerged as a poster child of globalization in Southeast Asia. In the middle of this decade, Cambodia enjoyed double digit growth and even hoisted itself up to 6th place in the rank of the fastest growing economies for the 1998-2007 period.

And now the country is experiencing the downside of dependence on the world. The sectors most affected by the crisis – tourism and garment export – are the ones that have seen the most development thanks to the integration of Cambodia into the global economy a decade ago, after peace was restored in the country. At this time, the economy was opened to foreign investors, who poured money into the garment industry, taking advantage of supports granted to Cambodia such as the Most Favored Nation (MFN) and the Generalized System of Preferences (GSP). This status provided access to the American market and it enabled other Asian investors – Chinese in particular – to get round their own quotas or the Least Developed Country status conferred upon them by the United Nations.

But the happy days are now threatened by the shrinking world market. Of the four major pillars of Cambodian economy – the garment industry, tourism, construction and agriculture – three are seriously impaired by the global crisis. With 70 percent of Cambodia’s garment production going to the US, the declining American economy, choosey shoppers and stay-at-home tourists have led to job losses in Cambodia.

The figures released in late July by the Garment Manufacturers Association of Cambodia (GMAC) showed a worse than anticipated loss: exports dropped almost 30 percent and one garment worker in 6 lost her job in the first six months of 2009. Most of these workers are women who transfer a substantial part of their earnings to their family living in rural areas in order to supplement farming-based incomes. In some villages, every family has one or several members working in the garment factories based in the Phnom Penh suburbs. Some go for unpaid leaves or part time jobs, some enter prostitution, but most decide to go back to their village in order to work in the rice fields.

According to Van Sou Ieng, GMAC president, Cambodia is much more severely affected by the crisis than other Asian countries like Indonesia, Vietnam, Bangladesh or China because the industry sector in Cambodia is less competitive. “We need more time to produce than China or Vietnam,” he says. Though the government helps with profit tax exemptions or export charge reductions, there’s no miracle cure for Ieng.

Tourism – the second pillar of the economy – has suffered from the economic crisis, and the fallout from the swine flu. In Siem Reap, located next to the famed Angkor temples, a spot visited by more than 1 million tourists in 2008, the situation is described as “catastrophic” by hotel managers. The hotels’ occupancy rate has fallen 25 percent compared to the same period in 2008. Several three or four star hotels have definitely closed their doors, and the mid-range hotels have been multiplying promotional offers for months.

The drop in Western tourists’ arrivals (down 14 percent during the four first months of 2009 according to the Minister of Tourism) has a direct impact on tourism generated incomes – foreigners spent 1.6 billion dollars in 2008. The Ministry of Economy and Finance expects a drop in tourism growth of 7 to 8 percent this year.

The construction sector is also affected: many foreign investors have delayed, reduced or slowed their projects. The capital Phnom Penh started to change face in 2008 with the building of huge towers, business centers and shopping malls but activity slid in the second half of 2008, leaving workers without employment. Such trends have had significant consequences, particularly among the banking sector. The Acleda bank, which has the largest branch network in all provinces, reported a fall in profits in the second quarter of 2009 because of late payments and less lending. The Cambodians, who speculated on land as investment, are now facing difficulties because the prices of land and real estate have plunged and they can’t sell and get cash.

The hardest hit, of course, are the poorest of the poor who count each riel. For them, any drop in income, as well as any unexpected crisis, immediately results in cutting down the number of meals per day.

Agriculture, the fourth pillar of the Cambodian economy and the least exposed to global currents, could bolster the country’s 2009 growth, which is forecast at 2.1 percent. The agricultural sector (with 4.3 percent growth expected in 2009 depending on weather conditions) is essentially based on rice farming and fishing.

But the part of agriculture that has drawn foreign interest proves to be a mixed blessing.

In northeastern Mondolkiri province, plans by a French company to set up a rubber plantation have created a conflict that symbolizes the double edged sword of globalization. For several months, Bunong, a Montagnards ethnic group, has been fighting against the project – as their farmland gets swallowed up by the rubber company that has an agreement with the Cambodian government. The company is expected to make huge profits, a part of which could return to the community via the salaries of the plantation workers and the development of a new city.

The crisis has forced the government to pay attention to those left behind by globalization. “We thought that the private sector could solve every problem but we have to reconsider the role to be played by the State in order to palliate the deficiencies of the market,” says Hang Chuon Naron, Secretary General of the Ministry of Economy and Finance.

The crisis has also led the leader of political opposition Sam Rainsy, former Economy Minister, to call for injecting government funds into the economy and for pushing reforms, in particular against endemic corruption. But the government would rather let the storm blow over, waiting for growth to come back in developed countries, hopefully pulling the country out of its recession in the process.

In the meantime, some hopes turn to the mineral, oil and gas resources development. But the revenues from these productions will be mainly derived from exports of raw materials with no local added value, whereas imports of manufactured goods will increase. Even after growth returns, Cambodia will still have to figure out how to hitch its industry to the global economy profitably rather than be a supplier of garments produced by cheap labor. Cambodia is beginning to learn the challenge of being part of an integrated world.

Anne-Laure Porée is a journalist based in Phnom Penh. She can be reached at
alporee@hotmail.com.

Cambodia tourist numbers disappoint

Tourists explore the grounds of Cambodia's popular Angkor Wat. [Reuters]

Sunday, January 04, 2009
ABC Radio Australia

Cambodia's tourism minister says the global financial crisis and political protests in Thailand were behind a less than expected rise in tourist numbers in 2008.

In the first half of last year arrivals soared 13 per cent, and the Ministry of Tourism projected continued growth in the second half of the year.

AFP news agency reports official figures, however, show tourist arrivals were up just eight per cent.

Tourism minister Thong Khon says the global financial crisis affected the forecast.

He also says protests at Bangkok's two main airports in late November had a significant impact, closing a major transit hub to Cambodia for over a week.

Thong Khon says about 31 per cent of tourists enter Cambodia via Thailand.

Altogether, just over two million people visited Cambodia in 2008.

Angkor Wat: A Temple to Tourism?

Tuesday April 22, 2008
By Susan Postlewaite
Business Week

Elephants sway in the steamy heat, carrying tourists along the jungle paths around the ancient stone temples, while overhead the occasional hot air balloon or helicopter goes by, taking other visitors on an aerial tour of Angkor Wat and nearby ruins.

Inside the temples tourists from all corners of the world clamber over the stones, shoot video and fan themselves in the midday sun. When dusk comes the crowds climb onto their tuk tuks, bikes, and buses to make the eight kilometer trip back to the town of Siem Reap.

Not long ago a dusty village with a few dozen tour guides and guest houses, Siem Reap now hosts several thousand tourists a night in the high season as Cambodia launches itself in the mass tourism market. Ten years ago, with the country still emerging from decades of civil war and tumult, Cambodia received 217,000 visitors. "Last year we got 2.1 million," crows Tourism Minister Thong Khon. "Almost 50% of them came to the temples," he adds. By 2010, Thong Khon expects the number to reach 3 million.

Although Angkor Wat and the dozens of other temples built between the 9th and 14th centuries are the main attraction, the industry has moved astonishingly quickly to bring in the extras that will keep the tourists in town more than a day or two: spas, shopping boutiques, handicraft markets, galleries, ice cream shops. There's a special road called Pub Street lined with international cafes and trendy art bars, golf courses, upscale dining, horseback riding tours, cooking classes, convention activities, a night market, temple-side dinners for two or for dozens, and nature tours.

Rebuilding Since Khmer Rouge

The rustic guest houses where 10 years go visitors risked getting tropical fever from a mosquito bite are gone, replaced by five-star architectural gems and multi-story, mass market hotels with buffet lines and door-to-door bus tour packages. "What's fascinating to me is that the most demanding customer can find anything he wants in this little village that has boomed in only five years because of its cultural heritage," says Julia Fesenberg, marketing communications manager for Raffles, the Singapore-based chain that operates the French colonial era Grand Hotel d'ngkor in the center of town.

The government, seeing the potential for major tourism revenues, has been working for a decade to get international development agencies and donors like Japan to rebuild roads, bridges, and airports to recreate the tourism industry that was decimated in the early 1970s during the U.S. bombing of Cambodia and then by the Khmer Rouge and their radical Maoist takeover. The strategy has worked so well that tourists now come year round, although the crowds are much smaller in the April -- September low season.

In the high season, when the weather is cooler and dry, wealthy South Americans come in private jets, and rich Russians come on charter flights. Hundreds of thousands of Korean, Taiwanese, Chinese, Japanese, Vietnamese, Thai, European, and American tourists come on direct flights from places like Singapore and Bangkok. "Everyone is happy. The government is happy, the prime minister is happy, in terms of the international arrivals," says Mohan Rao Gunti, tourism consultant for the Cambodian Association of Travel Agents.

No Longer a Dangerous Place

In the late 1990s, much of the temple area was still hazardous. There were land mines and bandits, and the five-hour boat trip up the Tonle Sap from Phnom Penh could be dangerous: Sometimes boats sank and there was occasional sniper fire. The surrounding low mountains visible from the temples were under the control of the Khmer Rouge. Now the news from the town is about new golf courses, the crackdown on littering, and the opening of Swensen's ice cream.

Raffles was the first of the world-class hotels to get back into Cambodia, when it took over the crumbling colonial-era hotels Le Royal in Phnom Penh and the Grand in Siem Reap. The Grand, which had hosted Charles De Gaulle and Jacqueline Kennedy Onassis in the 1960s, is again the place for the elite to stay. Last year Bill Clinton stayed there. Pop star Ricky Martin visited recently.

Many of the high-end hotels that entered the market a few years ago are already expanding. Amanresorts International, the Singapore company, opened a 12-room resort inside a walled compound in 2002, and in 2006 added another 12 $700-a-night suites, each with a private pool. The rooms are new, but the property itself is historic: Aman took over the former guesthouse of retired King Norodom Sihanouk and converted it to suites. What is now the dining room used to be where the king, an art-movie director, showed films.

Keeping the City Clean

Another architectural gem in the center of town is Residence Angkor, a 55-room boutique hotel built of exotic hardwoods. Run by Orient-Express Hotels (OEH), it caters to Westerners and is expanding by adding a spa, business center, and more dining space. Victoria Angkor Resort & Spa, with 130 rooms, does promotions with a nearby golf resort. Meanwhile, on the road to the airport, dozens of four-star multi-story hotels have sprung up to cater to Asian tour groups. And even more are being built.

Although tourists are coming in big numbers, there are challenges for the town. "We must keep the city clean," says Khon, the minister. That means getting the rubbish out of the riverside area, improving the bumpy dirt road that leads out to the Tonle Sap lake tours of floating villages and the bird sanctuary, and developing sports, such as kayaking or sailing on the Western Baray, a lake area near the temples. "We want to develop this as a satellite destination. It is helpful to the hotel industry if the tourists stay longer," he says. He envisions more options for all cultures. "You know the Europeans like swimming, the Americans like to do sports. The Chinese, the Asians, like to go shopping. So we have to develop all the markets."

Developing the Rest of the Country

The government is also looking to capitalize on the popularity of Siem Reap to develop other parts of the country. For instance, it is planning more golf courses for the Sihanoukville beaches, which the government says will be Cambodia's next tourism cash cow. Several new beach resorts, including a casino resort, are also under development.

Other areas of the country are also opening for tourists. Ecotourists are making their way to the jungle areas of Mondulkiri in northern Cambodia and Koh Kong in the south. Mondulkiri is marketing elephant treks through a small project known as the Elephant Valley Project, which works with a nongovernmental organization that cares for mistreated elephants. Hill-tribe treks can now be found in the northern province of Rattanakiri, and in the south, the little-explored Cardomom Mountains have hard-core trekking. "We want quality tourists, but our policy is we welcome any kind of tourism, luxury or not," says Khon.

Hun Sen warns against int'l tribunal for ecological crimes: Guess why?

Cambodian PM warns eco-court can curb tourism

PHNOM PENH, March 7 (Xinhua) -- Cambodian Prime Minister Hun Sen has warned that government ministers should be cautious before offering support for a proposed international tribunal for ecological crimes, the Cambodia Daily newspaper said Friday.

Cambodia should not allow new environmental restrictions to curb the increasing number of planes that deliver increasing volumes of tourists to Cambodia, Hun Sen was quoted by the newspaper as saying.

Cambodia was not alone responsible for climate change, he said, adding that climate change is a new, complex issue that required further study before Cambodia could take any actions.

Hun Sen said Cambodia expected to receive 2.3 million tourists this year, a 15 percent increase over 2007 level.

It was unclear which proposed international body the premier was referring to, however the Inter Press Service news agency reported in September that UN diplomats had expressed renewed interest in creating such a tribunal, a long-standing proposal, the newspaper said.

Meanwhile, World Wildlife Fund Program Manager Bas van Helvoort said Thursday that Cambodia was not among the world's largest polluters, but it likely would not suffer from the creation of such a court.

Tourism Needs Transparency, Agent Says

By Sok Khemara, VOA Khmer
Washington
04 March 2008

The Cambodia Association of Travel Agents is committed to creating more transparency and sustainability in the tourism sector, the president of the association said Monday.

Cambodia is experiencing an expansive growth of tourism surrounding the temples of Angkor Wat, and their gateway city, Siem Reap, and the association is quick to remind government officials that the sector must be open, said Ho Vandy, president of the association, as a guest on "Hello VOA."

Siem Reap now has more than 10,000 hotel rooms, he said, but still there is a shortage, with annual tourists reaching 2 million, he said.

"We have to find a way from now through the next ten years to promote the tourism industry services," Ho Vandy said. "Otherwise, we will lack a lot."

Tourism revenue for 2007: $1.4 billion

Saturday, January 18, 2008
Everyday.com.kh
Translated from Khmer by Socheata

Thong Khon, the minister of tourism, indicated on 17 January that the revenue from tourism rises from $1.04 billion in 2006 to $1.4 billion in 2007. Thong Khon said that among the 2 million of tourists visiting the country, 60% visited Siem Reap, 35% stayed in Phnom Penh, 10% visited Cambodia’s seashores, and a number of others visited Cambodia’s northeast and other regions. Thong Khon said that, in average, each tourist stays 3 to 4 days and spends about $770. In 2007, the largest number of tourists came from Korea, followed by Japan, the USA, Vietnam, Taiwan, etc… The tourism industry provides more than 200,000 jobs.

As Tourists Flock to Cambodia's Angkor Temples, Preservations Fear for Its Survival

While tourism to the Angkor Wat temple is flourishing and helping Cambodia from an economic standpoint, the environmental concerns of the tourists' impact make it a difficult issue to tackle. Only five years ago, visitors to the world-famous Angkor Wat temple were only a few hundred a day. Now the number of tourists has increased to more than 10,000 per day, which is good for the Cambodian economy but a disaster for the 800-year-old temple area. The increased number of visitors demands that measures be taken to preserve the temples of Angkor Wat. (TANG CHHIN SOTHY/AFP/Getty Images)

July 4, 2007
ABC News (USA)

After years of neglect threatened to destroy the temples of Angkor during the brutal regime of the Khmer Rouge, this wonder of the world is now at threat for a different reason too much interest.

The temples were built between the ninth and 15th centuries and now face the modern threat of tourism, as millions of visitors arrive to see the more than 100 Hindu and Buddhist monuments spread across 50 square miles in Cambodia.

"The ruins of Angkor are one of the marvels of the world," John Stubbs of the World Monument Fund told ABC's Mark Litke. "There's no doubt about that."

Stubbs is at the forefront of a global effort to preserve and restore Angkor, and has spent 15 years in Cambodia to help piece together a vast archaeological jigsaw puzzle.

Crowding the Ruins

While Stubbs' work has helped to save Angkor and turn it into one of the world's premiere destinations for cultural tourism, the location's salvation may ultimately turn out to be its curse.

There's literally been a tourist invasion. In the 1990s, Angkor attracted just a few thousand visitors a year; by the end of 2007, a total of 2 million are expected to climb up, down and through the ancient ruins.

They arrive by planeload, busload, on motorbikes and even on elephants.

Visitors once had to hack through jungles to reach Angkor. Now, the route to the temples is packed with traffic jams, especially by the end of the day when more than 3,000 people assault the highest temple in the complex to watch the sunset.

In the adjacent town of Siem Reap, there were just two hotels a decade ago now, there are more than 102, along with shopping malls, pizza joints and massage parlors.

It's hardly the serene Angkor experience some tourists might expect, as one woman told ABC News, "I think it takes away from it, I do."

But, another visitor said, "I don't. I feel that the importance of this place deserves people to watch it, see it, witness it."

Balancing Preservation With Greed

Angkor tourism has brought jobs and millions of dollars to one of the world's poorest countries, but some Cambodians fear greed is now winning out over preservation.

The scenery was even used as an exotic location for Hollywood films including "Lara Croft: Tomb Raider" not quite what the preservationists had in mind.

Stubbs said there was a need for constant vigilance as interest grew for Angkor. "There's not a minute to waste in looking after this precious place. & Because, without a doubt, it could be ruined by some wrong decisions."

But he's hopeful that Cambodians will eventually strike the right balance.

After all, they were the ones who created this magnificent, majestic site in the first place.

Plane Crash Prompts Concerns on Dodgy Travel Packages [for Korean tourists]

Jun.27, 2007
Chosun (South Korea)

Questions about the safety of discount package tours to Southeast Asia and China are on the rise following Monday's fatal plane crash in Cambodia.

According to the Ministry of Culture & Tourism, the number of Koreans who traveled to Southeast Asian countries more than doubled from 3.32 million in 2000 to 7.32 million in 2005. The number of travelers to Cambodia, famous for its Angkor Wat historical ruins, increased 15-fold during that period, from 2,046 to 33,072.

With tourism booming in Southeast Asia, some travel agencies are offering discount package tours in a bid to attract customers. While the victims of the accident each paid W599,000 (US$1=W938) for what was intended to be a six-day, four-night Cambodia trip, similar packages can be had for around W270,000 in some places.

In order to offer those bargain-basement prices the agencies sometimes contract with transportation companies that use older buses or planes, and that is becoming a threat to the safety of tourists.

Still, the accident seems to have persuaded few Korean tourists from traveling to Southeast Asia. Three hundred people on Tuesday canceled trips to Cambodia with Hanatour Service, the agency that put the tourists on the plane that crashed. But many tourists booked with other travel agencies left according to schedule.

In order to fill plane seats that they have already booked, travel agencies offer cut-rate tours during the low-demand season, up to one third the price of tours in the high season. Depending on the season, the price of a five-day, three-night tour to Cambodia can vary from around W300,000 to W1.1 million.

Some travel agencies offer tours including food, accommodation and local travel for less than the cost of the plane ticket, but travelers often end up complaining of hidden fees and disappointing tours.

"Choi" paid a local travel agency W500,000 for a five-day, three-night golf trip to Thailand in July of last year, but later filed a case with the Korea Consumer Protection Board requesting for compensation.

"I couldn't get to sleep at the hotel I stayed in the first night because of the noise, and a 'shrimp and pork barbecue' that was supposed to be provided as a special meal was not there. I had a car accident on the way to the airport on the last day and arrived late. The guide didn't direct me through the departure procedures, and I barely got on plane," Choi complained.

Tourism insiders warn that more fatal accidents could happen as agencies are booking cheap airlines to lower their costs.

"Many of the cheap packages to Southeast Asia that are currently on sale are on airplanes that are in poor condition," an official in the tourism industry said. "Because there's a lack of substitute planes, only one or two planes transport all the passengers, and in some cases small airlines with just a few years of domestic flying experience are operating on international routes."