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Logo of Phnom Penh Post newspaper Phnom Penh Post - Planners welcome Siem Reap hotel boom

Planners welcome Siem Reap hotel boom

"Everywhere in the world it happens," said Sok Chenda, Cambodia's point

man for attracting investment to Cambodia. "It happens in Acapulco, in Cancun.

It happened in Shanghai, and it might happen in Bali. It will happen in Hainan -

and it will happen in Siem Reap.

Chenda was reflecting on the sudden bounty of hotels - they are expected to more

than double this year - springing up in Siem Reap, the gateway to Angkor Wat.

"At one point you have enough room. At one point you don't have enough room.

At one point you will have over-capacity," said Chenda, secretary-general of

the Council for Development of Cambodia, which is in charge of promoting Cambodia's

investment environment and approving investment projects.

Along the road to Siem Reap's airport, luxury hotels are sprouting like mushrooms.

According to the Ministry of Tourism, the number of hotel rooms will soar by 112

percent this year. At the end of last year, 62 hotels with 3,691 rooms were operating

in Siem Reap. Twenty-five new hotels with a planned 4,273 rooms are either under

construction or awaiting a license to operate, said Yang Van, director of the Tourism

Industry Department at the Ministry of Tourism. Most of the new hotels will be finished

this year, bringing the total rooms for Siem Reap tourists to 7,814.

By contrast, new hotels were added in Siem Reap at an average rate of 29 percent

a year from 1998 till 2003, the ministry said.

At least statistically, the hotels are already struggling to make money from record

numbers of tourists arriving in Siem Reap to see the ancient temples.

The average occupancy rate of hotel rooms for all of Cambodia was 45 percent last

year - approximately the break-even point for profitability, experts say.

While Siem Reap appears set for a hotel meltdown, government and business leaders

disagree about whether the boom will end in bust and about what the new capacity

will mean for the future of the hospitality industry.

Bernard Creff, director of Ecole d'Hotellerie et Tourisme Paul Dubrule, the country's

top hospitality training school located in Siem Reap, said that because hotel capacity

was increasing faster than the number of tourists arriving, "It is a big problem."

The growing gap between rooms and tourists to fill them would go "higher and

higher", he said. It could be "dangerous" for the hotel industry.

Thy Hourn, business development officer of Mekong Project Development Facility, an

agency affiliated with the World Bank, is an advisor to the fledgling Siem Reap Angkor

Hotel & Guesthouse Association. He said that association members have expressed

their concern about the possible result of an over-supply of hotel rooms - price

competition for everyone.

Thy Hourn said he believed the government should take this issue seriously.

"We need their intervention in this area," he said.

Others, however, see the hotel boom as a positive development, or at least as not

a problem.

Sok Chenda said competition will lower prices and raise standards of service. In

highly competitive conditions, "Some suffer a lot, and sometimes die because

they are not very professional and not very capable," he said. More competition

can mean benefits for tourists, he said.

"Hotels are too expensive in Cambodia. As a client, as a tourist, I'm just waiting

(for the prices to drop)," he said.

Benoit Janctoes, manager of the FCC Angkor Restaurant in Siem Reap, agreed that more

hotels would lead to increased competition. Those that can't compete, he said, would

"go away".

He predicted that room rates in luxury hotels would fall to about $50 from current

rates exceeding $100.

Vann Molyvann, a noted authority on architecture, is bullish on the hotel expansion.

Supreme privy counselor to King Norodom Sihanouk and senior advisor to the government,

Molyvann said there were not enough hotels in Siem Reap and the town "absolutely"

needs more.

Molyvann, a past president of the Apsara Authority, designed many of the country's

landmarks including the Independence Monument, the Chaktomuk Conference Hall and

National Theater, the National Sports Complex and the Council of Ministers building.

Chris Ho, general manager of the Preah Khan Hotel in Siem Reap, has worked for hotels

for 26 years in various countries. He said he would invest in the hotel sector now

if he could. With an estimated 800,000 tourists visiting Siem Reap every year, there

are not enough rooms for all of them, he said.

Regardless of whether tourists can fill all those new rooms, some are concerned that

hotel growth in Siem Reap is proceeding too fast for the town's infrastructure to

serve them.

Yang Van, director of the Tourism Industry Department of the Ministry of Tourism,

said, "We wish that the number of hotels (in Siem Reap) would not increase so

fast like this."

Because Siem Reap is small, he said, basic public services such as the water supply,

electricity and other infrastructure are lacking.

"We must not develop so fast. We should increase step by step. It should depend

on the development (of public services)," he said.

Driving the confidence of those bullish on hotel expansion is the magical appeal

of Angkor Wat.

Philip Set Kao, general manager of Borei Angkor Hotel in Siem Reap, said he believed

Angkor Wat will always bring more and more tourists. Even if it is difficult to fill

hotels now, the hotel industry is optimistic about the future, he said.

"People are looking to the next year, and the year after that, and after that.

Angkor Wat will always bring more and more people.

"Because we have Angkor Wat, everyone in the world wants to come and see this

place," he said.

* Reproduced with permission from The Searchlight, published by the Southeast Asia

Media Center, Phnom Penh, supported by the Independent Journalism Foundation in New

York. Articles are by trainee professional journalists from Cambodia, Laos, Myanmar

and Vietnam.



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