T

HE capital's Hotel Sofitel Cambodiana is laying off 100 staff in the wake of a

dramatic drop in its occupancy rate, a source close to the management said.

The hotel is now only 30 percent full, down from a peak of 90 percent of

a few months ago, said the source, who blamed the current upsurge in fighting

between the government and Khmer Rouge guerrillas for deterring

tourists.

General Manager Guy Lucas, admited occupancy rates have reduced

in the last few months, but attributes it also to the start of the rainy season

and unwarranted bad press worldwide about the country.

"It is difficult

to pinpoint the reason for the fall," he says. "And it is wrong to take an

exception as a trend."

But he also admitted that "a small fraction" of

the employees will be "laid off temporarily" to help manage this crisis. "We

have to adjust all staffing to the given situation," he said.

The

Cambodiana employs about 600 people and has been in operation for two years. It

is the capital's premier hotel and charges $168 a night inclusive of taxes for a

single room

Lucas said that those laid off will be re-hired if the

situation changes in accordance with Cambodian labor law.

"The hotel

business is investment-heavy, labor intensive and depends on volatile clientele,

but I am sure things will improve here," he stressed.