Laps of luxury: A woman swims at the Prince D’Angkor Hotel in Siem Reap.
While the Siem Reap hotel market will continue to expand over the next five to ten years, and the coastal resort market will inevitably go through the roof, the real surprise in development focus will be the Phnom Penh market.
Statistics are always open to interpretation and figures on the hotel room capacity for Phnom Penh and Siem Reap are a case in point.
According to 2007 figures from the Statistics and Tourism Information Department, Siem Reap has 7,695 hotel rooms in 101 hotels and while Phnom Penh has slightly more hotels – 137 – the city has less room capacity, at 6,407.
That a small city like Siem Reap, albeit a city driven by tourism, has more hotel beds than the capital is often cited as a case that the Siem Reap hotel market is close to saturation.
But in talking to the major hotel players, it becomes obvious that what these figures really mean is that the Phnom Penh hotel market is drastically under-developed, particularly at the high end.
And when those same players talk about the potential of Phnom Penh’s high-end tourism industry, phrases such as “a potential goldmine,” “going to explode,” and “set to expand big-time” are bandied about.
Patrick Murray, general manager of the iconic Cambodiana Hotel, doesn’t mince words when talking about where Phnom Penh’s high-end hotel market is headed.
“It’s headed up. It’s going to explode,” he says, adding, “In my opinion there are no five star hotels at all in Phnom Penh but I feel that with all the new hotels that are coming in, all the boutique hotels that are opening, the hotels that my owner is opening, the five-star hotel market in Phnom Penh is going to grow big time.”
Only a decade and a half ago there was only one high-end hotel in Phnom Penh – the Cambodiana. Its former glory is now a little down at the heel, but the grand old dame of Cambodian hotels is about to get a major facelift – $1.2 million has been budgeted for extensive upgrades, particularly to the rooms and facilities such as gyms, with the corporate business travel sector being targeted.
The real Cambodia
Julia Fesenberg, marketing communications manager of Raffles Grand Hotel d’ Angkor and Raffles Hotel Le Royal in Phnom Penh, said the Raffles group also is gearing up to meet the challenges of a new thriving high-end hotel surge in the capital, for both the business and tourism sectors.
She said, “The market here is a goldmine. In the past Cambodia has been a mono destination. Tourists would come to Cambodia, fly into Siem Reap, stay two days, and fly out again. But this is now changing with an increasing interest in Phnom Penh.
“It is in our interest to get this country to a stage where visitors stay longer in more destinations. Everybody in the industry is aiming for that, and that’s our overall goal.
Beyond flashpacking: Alexis de Suremain, general manager of guesthouse The Pavilion in Phnom Penh, expects greater numbers of big-spending tourists to visit Cambodia in coming years, with many likely to stay longer periods in the capital.
“Phnom Penh is very easy to promote because this is the ‘real’ Cambodia and it has hidden treasures. It is real and unique. I always compare Siem Reap to Munich in Germany. Munich is not Germany, and Siem Reap is not Cambodia – there is much more.
“We are also marketing it as a weekend destination for expatriates in neighboring Southeast Asian countries on the basis that a weekend in Phnom Penh is comparitively cheaper and offers value for money. Plus they can look at some real culture that so far hasn’t been destroyed by tourism. Look at our Royal Palace for example. Why isn’t it regarded as highly as the palace in Bangkok? Because it has not been marketed.
“We need to work on the image of the country,” she continued. “People will come here for weekends but they need to have the awareness that the Khmer Rouge are not running around outside anymore killing all of us, and that if you walk down the street there are no mines to step on.”
Fesenberg also pointed out that the Phnom Penh Raffles lived up to its “Royal” tag in February, when it played host to Queen Sophia of Spain.
A new leader
Leading the charge into the high-end hotel market in Phnom Penh is Sokha Hotels. As well as spending over US$1 billion on the Bokor Mountain project, upgrading its Sihanoukville resort, plus building another five-story, 500-room resort on a 60-hectare land tract in the region, the company has big plans in the capital.
Sokha CEO Bobby Toh told the Post, “While Siem Reap is the gateway for tourism in Cambodia, Phnom Penh is the gateway for business. It is also the seat of government and therefore we have a different type of traveler coming in to Phnom Penh compared to Siem Reap.”
To cater to that market, Sokha is drawing up plans for a 16-story, 650-room hotel with a convention centre large enough for about 1,200 delegates, car parking for about 880 cars, and specialty restaurants including a unique ‘interactive’ restaurant, specialty stores and a supper club for dancing.
“This project is now in the final stages of the architectural design, zoning of restaurants, and layouts,” Toh said.
“We are working toward starting construction sometime in June this year, and our completion date is estimated to be in about two and a half years.”
To help fill the huge increase in Sokha hotel rooms in Cambodia, in April the company will become a member of World Hotels, an offshoot of SRS Hotels, a global reservations system.
“This is a group of 500 world class hotels and our two hotels already here in Cambodia will be members. The group has 30 international sales offices, and about 200 sales staff working around the clock to market the hotels worldwide,” said Toh.
Sokha also has another project for Norodom Blvd that will be launched in Phnom Penh on March 9.
Toh said the plan is to open the “first international-standard private club in Phnom Penh. It is the first of a new brand for Sokha, the Sokha Club Lodge. It will have 16 guestrooms, two restaurants, a spa and a karaoke lounge.”
He said the target clientele is local and international businessmen who want to have an outlet for entertainment and relaxation along with the potential for networking.
“In the future there will be a lot more of this brand around Singapore and Cambodia,” he said.
While there is a long list of big-brand hotel groups tipped to eventually enter the Phnom Penh market, there is also a new niche opening for upscale tourism in the boutique hotel market.
Fit for a PM: Hun Sen’s suite when he stays at the Sokha Hotel in Siem Reap (L) covers 320sqm, has four bigscreen LCD TVs, a massage room and costs $2,000 a night.
Leading the race in this is the FCC group, which is about to open two new boutique hotels in Phnom Penh.
Michelle Duncan, operations manager of Food and Beverage Solutions, which also owns the FCC Cambodia and Pacharan restaurants, agrees with Patrick Murray that Phnom Penh is desperate for much more high-end hotel development.
“There is a big need here for quality, modern hotels – that kind of urban business hotel that you get in any capital city,” she said.
“There are a lot of corporate business needs here. If you try to book a hotel room, everything suitable is booked out and it’s very difficult for the business traveler to find a good hotel here, so there’s definitely a need.”
Duncan sees a need for boutique hotels to fill a bourgeoning niche market, especially for the seasoned-traveler, Western baby-boomer market seeking an escape from the confines of large-chain five-star branded hotels that are essentially the same worldwide.
“I think there’s a niche market here, both in Siem Reap but also in Phnom Penh, for people who want something casual and nice rather than the big hotels with 300 rooms and such,” Duncan said.
“I think the relevant word is lifestyle. Something a bit more familiar and a bit more Cambodian but still with the quality that such travelers need.”
FCC established a footprint in the boutique hotel market in Siem Reap four years ago, but is now ready to create a presence in the Phnom Penh market.
She said the Quay on the riverfront was initially scheduled to open in February but now will open at the beginning of April. It bills itself as a hotel where “designer comfort meets social responsibility.”
It will offer wifi and wheatgrass-infused juice, and it will be a leader in local “carbon-friendly tourism,” according to Duncan, who said the hotel is committed to becoming carbon neutral and plans to secure a Green Leaves rating. Similar to the five-star system, the Green Leaves system scores hotels on their carbon friendly status.
FCC Phnom Penh, and its parent company Indochina Assets Ltd, last year also bought the historic “Old French mansion” – the iconic and ornate colonial-era villa behind the FCC, across the road from the national museum. The villa will be restored to become a 24-30 room luxury hotel, as yet unnamed, with a structural link to the FCC restaurant.
“Again this will be boutique high-end,” said Duncan, adding that the group is still looking at expanding into the coastal area as well.
“Once areas like Sihanoukville are more developed, I think people will have to stay in Phnom Penh a couple of days more and then they will travel down to the beaches so for us, it’s trying to develop each of those core areas: the coast, Phnom Penh and Siem Reap,” she said.
The new style accommodation market in Phnom Penh is also being driven by Alexis de Suremain at The Pavilion, who is quick to point out that he is positioning himself in yet another new niche, the upmarket guesthouse niche.
He said his company is developing more accommodation outlets in Phnom Penh but is also set to expand into the coastal region. He is also enthusiastic about a “three destinations” push, linking Siem Reap, Phnom Penh and a more developed but eco-friendly coastal region.
Suremain said developing the three destinations policy will bring more high-end tourists to Cambodia and get them to stay longer in the Kingdom, including a longer stay-over in Phnom Penh.
Like the FCC, he says the environment-friendly tag will become increasingly important to the future of Cambodian tourism, particularly the upscale end of the sector.
Philip Set Keo, president of the Cambodian Hotels Association, also agrees that the economic and business boom has made high-end hotel development in Phnom Penh an immediate imperative.
He says, “There should be an improvement in Phnom Penh. More corporate people are coming as business is prospering and Phnom Penh needs more rooms in the medium class and high class sector.”
But he also identifies a new niche market that will boost hotel occupancy rates in not only Phnom Penh but also Siem Reap and the coast.
The new niche is the conference and seminar business. Most of the new hotels in Siem Reap now have meeting rooms.
Overall, the startling makeover of the high-end hotel landscape in Phnom Penh will help earmark the capital as one of the newly emerging cosmopolitan metropolises of Southeast Asia.
“It is the new tendency of multi-corporate businesses to combine leisure and meeting in a new environment,” said Keo. “Cambodian locations are perfectly suited to that.”