Tourism relations marked by unease

Thai tourist arrivals in Cambodia fell 34% year-on-year in the first quarter, even as foreign visitor numbers overall increased by 14%.

Industry cooperation between Thailand and Cambodia is down but not out amid political tensions

27/06/2011

Steve Finch

Bangkok Post

PHNOM PENH : Organisers of the Thai Travel Mart Plus 2011 held in Bangkok earlier this month said Cambodian companies did not attend the regional event due to political tensions, a further sign this year's border clashes between the two countries have had a negative economic impact.

Gun Punthuhong, a spokesman for the Tourism Authority of Thailand (TAT), told the Bangkok Post by telephone from the opening of the three-day event on June 8 that the absence of Cambodian tour operators in Bangkok was due to the "obvious [bilateral] political chaos".

"There are no companies from Cambodia," he said. "Last year, they joined."

Vietnamese companies also did not attend the event, the biggest tourism trade show in the Greater Mekong Subregion (GMS).

Cambodia receives 778,467 int'l tourists in Q1, up 14%

PHNOM PENH, May 3 (Xinhua) -- Foreign visitors to Cambodia increased by an on-year 14 percent to 778,467 in the first quarter of this year, according to the statistics released by the Ministry of Tourism on Tuesday.

Of the figure, 55 percent traveled to Cambodia by air and the rest by land and water.

Among the top 10 tourist sources, Vietnamese rated first with 130,831, up 19 percent, South Korea second with 107,489, up 28 percent, and China third with 66,836, up 36 percent.

Little Profit Despite Tourism Growth

Toursists visiting Angkor Wat (Photo: AFP/Getty)

2010-11-14
Radio Free Asia

The average Cambodian citizen has yet to see the benefits of the country’s growing tourism industry.

Despite a large increase in foreign tourists and tourism-generated revenue, Cambodia’s poverty-stricken population is seeing very few of the profits, according to sources familiar with the industry.

The country’s minister of tourism, Tong Khon, said recently that the number of foreign tourists visiting Cambodia in the first nine months of 2010 had risen nearly 15 percent to 1.8 million from a year ago.

“The increase of tourists is due to our many important tourist attractions, such as the ancient ruins of the Angkor Wat complex, our beaches, and our eco-tourism, as well as attractions in the southwest regions of the country,” he said.

He also cited the rare freshwater dolphins of the Mekong River and mangrove forests of Koh Kong as large tourist draws, adding that improved road infrastructure, increased security, and economic recovery in Asia had all contributed to the growth of the Cambodian tourist industry.

A recent report from the Department of Tourism said income from tourism now accounts for 10 to 12 percent of Cambodia’s nearly U.S. $11 billion Gross Domestic Product (GDP).

Countrymen benefit

But Van Peou, president of the Cambodia-based Informal Economics, said Cambodia’s tourism industry is regulated in such a way that prevents the increased inflow of foreign tourist dollars from benefiting the population.

“The airlines, the tour bus companies, and the hotels are operated mostly by [the tourists’] fellow nationals, who are the ones to truly benefit from this increase,” Van Peou said.

“The lives of local residents who deal with the tourists haven’t improved much from the growth … The only income I can see [Cambodians earning] is from the sale of admittance tickets to see temples,” he said.

Son Chhay, a parliamentarian from the opposition Sam Rainsy Party, said that Asian tourists in particular, who make up the large majority of visitors to Cambodia, are more likely to spend their money on services linked to their home countries or that are provided by fellow nationals.

“Whatever they spend on their trips mostly flows into the hands of the companies of their fellow countrymen, such as airfare, tour bus tickets, and restaurant and hotel bills,” he said.

Chan Sophal, of the Association of Cambodian Economists, says very little of the nearly U.S. $1 billion in profits from the tourist industry goes to the state.

“Angkor Wat has been run and controlled by a private company,” he said, referring to the Sokimex conglomerate, widely believed to be linked to members of the ruling Cambodian People’s Party (CPP).

“All the airlines belong to foreign companies. Most tour companies, hotels, and restaurants are also owned by foreigners. Therefore the income does not go to Cambodia,” he said.

Little gain from increase

Workers in the tourism industry say that they have seen little gain from the increased number of visitors.

“This year it’s harder for me to make money than the previous year because there are less European tourists and more competitors who quit working in the hotels to try this business,” said Ly Kitya, a motor tricycle driver in Siem Reap.

Another tricycle driver, who asked to remain anonymous, shared a similar observation.

“These days, most tourists join tours. They aren’t the type of tourist traveling on their own that tend to want to see the Great Lake [Tonle Sap] or to go for a massage here and there.”

Chan Dy, manager of the Apsara Hotel in Siem Reap, agreed that visitors are far more likely to join tour groups, to the detriment of local guides and hawkers.

“Guests staying at my hotel are on the rise, but since they join tours, they don’t spend much on other things,” she said.

A source within the Cambodian Department of Tourism said that in the first nine months of the year, more than 400,000 travelers arrived via flights to Phnom Penh International Airport and nearly 500,000 to Siem Reap Airport—increases of 11 percent and 17 percent from 2009, respectively.

The department expects the number of tourists to reach 2.4 million by the end of 2010, up from 2.1 million the year before.

During a Sept. 27 speech commemorating World Tourism Day, Cambodian Prime Minister Hun Sen pledged to “continue to accelerate [tourism] sector activity in order to help develop socioeconomically and work towards achieving the United Nations Millennium Development Goal.”

The goal to be achieved by 2015 includes, among other objectives, eradicating extreme poverty and developing a global partnership for development

Cambodia will host the 30th ASEAN Tourism Forum in Phnom Penh from Jan. 15 to 21 next year.

Reported by Kim Peou for RFA’s Khmer service. Written in English by Joshua Lipes.

Airports Expect More Passengers Next Year

By Kong Sothanarith, VOA Khmer
Original report from Phnom Penh
22 October 2009

Passengers arriving to Cambodia by air are expected to increase by around 5 percent in 2010, the country's airport management company said Wednesday.

"In the past month or two, we can really feel that there is an improvement in the economic climate of the country," Nicolas Deviller, CEO of Societe Concessionaire de l'Aeroport, which operates Cambodia's airports, told reporters.

The number of flights to Cambodia is also expected to increase next year, by about 2.5 percent, he said.

Kong Sophearak, director of the Ministry of Tourism's statistics and information department, said the ministry expected a similar increase. This will be due in part to the addition of a national Cambodian carrier, Angkor Air, and new routes from foreign companies.

The ministry expects the number of visitors to reach 2.35 million in 2010, up from 2.12 million in 2008.

Souvenir sellers suffering

A souvenir vendor in the Russian Market in Phnom Penh. Fewer tourist arrivals mean tough times for market vendors. (Photo by: SOVANN PHILONG)

Thursday, 26 February 2009
Written by Soeun Say The Phnom Penh Post

Falling tourist arrivals are taking a toll on tchotchke vendors, with some fearing bankruptcy if business doesn't improve.

SOUVENIR store operators in Siem Reap and Phnom Penh may face bankruptcy if tourism does not recover quickly, with revenues down by as much as 70 percent in recent months, say vendors.

Mam Ros Chamroeun, the owner of Asian Silk Souvenir Shop in Phnom Penh, said monthly revenues have plunged from US$1,500-$2,000 in mid-2008 to only $400 a month currently.

"Our businesses have been kept alive by tourists," he said. "If tourist arrivals continue to drop, our businesses will go bankrupt."

According to Ministry of Tourism figures, 2.125 million foreign tourists visited Cambodia in 2008, up 5.5 percent from 2007.

But arrivals dropped 6.5 percent in the second half of the year after growing 12.6 percent in the first six months, meaning the government missed its target of 2.3 million visitors in 2008.

In January, Tourism Minister Thong Khon told the Post that the global financial crisis and ongoing political turmoil in Thailand - a major tourist gateway to Cambodia - were behind the downturn.

He said that the souvenir trade earned 20 percent to 25 percent of tourism sector revenue, estimated at $1.4 billion in 2008, or about $700 per arrival.

The official expected total revenues to climb to $1.5 billion in 2009, with a full recovery by 2011.

Thouch Kunthea, owner of Khmer Princess Souvenir Shop, also in Phnom Penh, said revenues had fallen between 50 percent and 60 percent in recent months.

"Now I am already considering leaving my business, and I think that the downturn will continue to get worse," she said. Lim Nam, the owner of Angkor Night Market in Siem Reap, said that the downturn had forced him to lower rents to attract operators. Sales in the market had dropped by 50 percent, he said.

"It is not like 2007," he said. "Sales have slumped since 2008, and we have been forced to decrease rentals from $150 to $100 per stand, but still nobody wants to rent because they cannot earn."

He said he was worried he faced bankruptcy if the market does not recover.

Men Sinoeun, executive director of the Artisans Association of Cambodia, a training and trade facilitation organisation, said sales were healthy in the first six months of last year but dropped between 40 percent and 50 percent over the second half.

"Souvenir markets are going to drop even further no matter what we do because potential buyers lost income when the world financial crisis happened," he said.

2008 Tourism Numbers Rise, But Disappoint

By Chiep Mony, VOA Khmer
Original report from Phnom Penh
05 January 2009

The number of visitors to Cambodia in 2008 surpassed 2007, but officials said Monday less people than hoped had found their way to the kingdom.

The global financial crisis and political unrest in Thailand had both contributed to the lower-than-expected figures, officials said.

In 2008, more than 2.1 million foreign visitors came to Cambodia, a 6 percent rise over the previous year that was about 10 percent lower than expected, Kong Sopheareak, head of the statistics department at the Ministry of Tourism, said Monday.

"First, the global financial crisis, and another thing was the political crisis in Thailand, both of which affected us," he said.

More than a third of all tourists coming to Cambodia travel through Thailand, while another third come through Vietnam and about 3 percent come through Laos, he said. The rest arrive from other countries, he said.

About 60 percent of tourists come by plane, he continued, and about 4 percent are "same day" visitors.

Tourism Minister Thong Khon said Monday the ministry was pushing for even more visitors in 2009, including promoting the country as an affordable destination for regional travelers.

The Cambodian gov’t is committed to lasting tourism

20 Dec 2008
By Ky Soklim and Romain Roget
Cambodge Soir Hebdo
Translated from French by Luc Sâr
Click here to read the article in French

On Friday 19 December, the Council of ministers adopted a new draft law on tourism which has three goals: quality, efficiency and lasting development.

The draft law, which contains 12 points and 76 chapters, was presented by the minister of Tourism and it should resolve some of the contradicting issues, such as attracting more tourists and foreign funds while preserving natural, cultural and traditional Cambodian resources. The emphasis is placed on the improvement of the welcoming quality, an issue that Cambodia still has a lot to improve on. According to the government, the draft law should also contribute to the reduction of poverty.

In 2007, Cambodia attracted 2 million tourists and brought in more than $1 billion in revenue. The government hopes to strengthen this crucial sector that is currently being threatened by the worldwide economic crisis.

Gold Coast?

Martin Kaye

11.24.08
Ron Gluckman
Forbes (USA)

"Over the past two years nearly all of Cambodia's five dozen islands have been leased, and much of the shoreline has been carved up for huge concessions."

If Martin Kaye gets his way, the Cambodian-Vietnamese coast will be known as the Indochine Riviera.

Martin Kaye has a name for the barren beaches and empty tropical islands that line the Cambodian and western Vietnamese coast. He touts this 125-mile stretch as the Indochine Riviera and envisions a sun-drenched playground for jet-setters and holidaymakers from around the world. "Just look across the border in Thailand, at Phuket and Ko Samui," he says. "It's not a question of if, but when." The Hong Kong real estate investor plans on being right in the middle of all this construction: He could be the Donald Trump of Asia's next great resort strip.

Kaye has lots of company. Investment groups from Malaysia, Hong Kong, Russia and France have raced to stake claims in what has become a gold rush. Over the past two years nearly all of Cambodia's five dozen islands have been leased, and much of the shoreline has been carved up for huge concessions. Property values have boomed around Kep, a seaside destination for the French through the 1960s, before the rise of the Khmer Rouge riddled the charming seaside villas with bullet holes that are still visible. Bigger gains are reported around Sihanoukville, the site of several beach resorts and the country's main port, after a $30 million revamp of the airport two years ago. "That was the trigger to all the growth," says Matthew Rendall, partner at the Phnom Penh law firm of Sciaroni & Associates and the country's leading land lawyer. "After that, the entire coast really took off."

Not that you could tell by looking around. Sihanoukville remains a grungy coastal town with a slew of casinos and only one high-end hotel. Yet billboards heralding planned villa projects run for miles up and down the coast.

In the past year Kaye has won the right to build vast resort communities on the two biggest chunks of this coast, though he also hasn't built anything yet. But in the Ho Chi Minh City office of Kaye's company, the Millennium Group, there are lots of plans being drawn up. Don Taylor, who designed many of Phuket's resorts, shows off the master plan for Dai Beach: 1,500 condominiums, 700 luxury villas, two golf courses, 20 hotels and resorts, a marina and lots of shops, all sprawling across 1,335 acres at the northern end of Phu Quoc. Part of Vietnam, Phu Quoc is the largest island in the Gulf of Thailand. Kaye sealed the deal for the project in April after years of discussion and plenty of local liquor consumed with the island's village chiefs.

At the time, investors were focused on Phu Quoc after Vietnam unveiled new policies to promote foreign land ownership and promised to expand the airport for international use. But the expansion has been delayed, along with many of the plans for resorts. "Until the infrastructure is in place, especially the new airport, I am happy to sit," says John Goodyear, who runs a boutique resort in Tasmania and has leased land for another on Phu Quoc. Indeed, with the recent slowing of the Vietnamese economy, money is now moving across the border into Cambodia, says Bernard Lang, of First Indochina Group, a Vietnam consultancy. "Cambodia offers a fantastic investment environment."

Kaye's other site is in Cambodia, so he has horses in both races. He found it quite by accident. Parked on a deserted beach in Phu Quoc in October of last year, he was enjoying a surfing break after winning the initial agreement for the land. But like any Hong Kong wheeler-dealer on holiday, he couldn't resist thinking ahead to the next deal. Soon he was browsing the Web. Using Google Earth, he spied an island only 40 miles away, big as Hong Kong island, but a place he'd never heard of or seen on maps. Chartering a helicopter, Kaye was soon circling above Koh Rung, Cambodia's biggest island, his eyes bugging out of his head. Even now his pulse accelerates as he describes how he soaked up the sight of Koh Rung's emerald hills, teeming jungle and mile after mile of crystalline white beaches. "This was uncharted territory," he recalls. "Totally pristine."

But not for long. In September Kaye won a commitment from the Cambodian government for a project that makes his gargantuan Phu Quoc development seem minuscule. He now controls the entire island and plans luxury resorts by the score, an airport, parks, even a university. The total investment could top $12 billion and play out over decades. "This is the chance to do Phuket or Ko Samui all over again, but do it right this time," says Kaye, sweating profusely between cigarette breaks at his office in Phnom Penh. "This is a chance to do something truly special."

Kaye is scurrying to find $200 million in financing to start on Koh Rung, but he's running headfirst into the global credit crunch. "Real estate debt financing has dried up," he says. He's focusing his fundraising in the Middle East, but it's proving a tough slog. His Cambodian partner for the project, Phnom Penh tycoon Kith Meng, says there's interest in Kuwait, Dubai and Qatar, and Kaye says there's also interest from Chinese and Japanese investors and British funds. "People will come to Cambodia because this is where you can double, even triple, your money," says Kith, whose Royal Group is involved in hotels, telecoms, banking and development.

Kaye says the financial crisis could set the project back by six to nine months. For now he expects to start clearing the site by the third quarter of next year, "but if it drifts into 2010, that's no problem; this is a 20-year project and we want to do it right." He doesn't think the crisis will have a long-term impact on his two Indochine projects: "Tourism growth has been phenomenal, and that will continue."

The 41-year-old Kaye comes from a real estate family. Born in Hong Kong, he grew up yachting: "That where the concept of mixing real estate and my love of sailing really started me with resorts," he says. After climbing the ladder as a young sales agent, he set off on his own in 1999, forming his Hong Kong firm, and became involved in several projects on Phuket.

As Kaye gears up to develop his islands, other projects are springing up along the coast. In September the Sokha Hotel Co., which runs Sihanoukville's only five-star hotel, the Sokha Beach Hotel, broke ground on a 500-room resort on the town's Ochheuteal Beach. Sokha is also behind the $1 billion renovation of the Bokor Mountain Lodge, which will add a pair of golf courses and five-star resorts to an old French colonial hill station overlooking the coast.

Tourism Helps, But How, Expert Asks

By Mean Veasna, VOA Khmer
Phnom Penh
19 May 2008

Tourism remains an important sector for the development of Cambodia, but officials say they are unsure where the benefits go.

“It creates between 250,000 and 300,000 jobs,” Tourism Minister Thong Khon said.

Around 2 million visitors came to Cambodia in 2007, he said, bringing in $14 million.

Meung Son, president of Eurasia Travel and Tourism Association, said a lot of visitors came, but it is not clear where the $14 million goes.

“We do not know exactly how to count the $14-million benefits,” he said, as a guest on “Hello VOA” Thursday. “Tourism is giving jobs to many people, especially in the hotel and restaurant and transport sections.”

The expansion of hotels is driving job growth, he said. For every hotel with 100 rooms, 200 people will be hired.

But there remain dark spots, including beggars at sites disturbing visitors, he said.

It remains unclear how money and development in the sector, especially in Siem Reap, will affect this year’s election.