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Logo of Phnom Penh Post newspaper Phnom Penh Post - People returning with more money to spend

People returning with more money to spend

The impressive Hotel de la Paix.

HOW the times do change.  There was a grim feeling in the air this time last year.  Central Siem Reap lives and breathes tourism and the vital oxygen of tourists with money to spend was limited.

Traders held their breath as they observed some businesses struggle. In August last year some hotels were temporarily closing their doors for “renovations” and putting permanent staff on part-time contracts and by October some bars and restaurants could not survive.

Last year was a tough one for businesses in Siem Reap.  

Now, approaching the end of 2010 and the beginning of the next tourist season, that picture is starting to change and things are definitely looking up. Strong tourism growth predictions for the Asia region appear to be bearing out for Cambodia and the number of visitors continues to rise rapidly.  

In 2009 businesses struggled, not because there were too few tourists (there were actually more than the boom year of 2008), but because those who were here were watching their spending. At an average of 6.45 days, they were also staying for a slightly shorter period of time compared with 2008.

The problem for industry was that once here, they were dispensing with luxuries and sticking to the bare essentials.  Hotels such as the FCC noted at the time that although their customers were willing to pay for good quality accommodation, they weren’t making trips to the spa like they did before, for example.  

This year is different.

“Although the crisis might not be finished, things are picking up”, says Benoit Jancloes, general manager of the Foreign Correspondents Club, Siem Reap.  “People are coming back and they’re looking to their luxuries like they did before.”   

He says the traditional markets were still strong.

“We’re still seeing a lot of English speakers, from England, Australia and New Zealand, although the American market and some of the European markets have dropped a little.”

For him, an important development is the strengthening Singapore market, which represents free and independent travellers who like to spend money on luxuries.    

“Everything is better this year than last year.  Unless there is another crash, we are definitely over the downfall.  Now, we’re moving back up the high slope.”  

Tourist numbers are already up on last year and the tourist season hasn’t started yet and the number of businesses catering to them also continues to expand.

And Siem Reap is also offering many more things for tourists to do as an alternative to the temples. If you want to go up in a balloon, ride a horse, a micro-lite, a quad-bike, push-bike or motor bike and visit the many restaurants and the village life, you can.  

The nature of the market is changing, away from the low-budget backpackers to a more middle class core that likes to spend on extras.  Hotels continue to open and the most notable recent openings in Siem Reap were the Frangipani and Karavansara hotels.

Both are highly stylised boutique hotels, signifying considerable investments in the growth of the middle class market that is looking for high quality, albeit still at reasonable prices.

“Occupancy for the destination is returning, driven by markets in the two- to four-star hotel categories. Five-star occupancy is improving although a little more time is needed for the Europeans and Americans to start visiting again in numbers,” says Gregory Anderson, general manager of Le Meridien Angkor.  

The trend towards a savvier, more involved traveller has been taken good note of by the industry.  Olivier Marchesin, general manager for Exotissimo Cambodia, notes: “Visitors don’t want to be just an audience watching the show. They want to be an actor in their trip themselves.”

Peter Foster is the area director of sales and marketing representing both the Phnom Penh Raffles hotel and the Raffles Grand Hotel d’Angkor in Siem Reap, and believes the typical customer is somewhat of an explorer.

“They want to be able to take home stories about the people they meet, the food they ate, the local sights they saw, what is happening in the local community and so on.”

Both Foster and Marchesin reflect the general feeling that this year will be a good year for traders involved in tourism.  The main fears seem to lie in whether or not the world may fall back into recession.

Le Meridien is an example of the rapid transformation in the tourist industry in Siem Reap.  It was voted Cambodia’s leading hotel for the fourth time at the World Travel Awards this year.  Another award winner is the Hotel de la Paix, which made it on to the Sunday Times “Best Hotels in the World” list for 2010, as well as being highly selected by Travel + Leisure Magazine.  

As comfort for smaller traders, you don’t necessarily need to have extensive marketing budgets to make your business work.  Siem-Reap based travel specialist AboutASIA puts its strong growth down to word of mouth recommendations, noting that the onus is on the business to maintain high standards of customer satisfaction. 

“We are running at an all time high for new bookings”, says founder Andrew Booth, “and naturally we are looking forward to this coming season.”



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