International tourist arrivals into Cambodia have soared in the past year, with arrivals into Siem Reap up 30 per cent in the first eight months of 2012 over the same period the previous year.
The tourist industry was hit hard by the global economic crisis in 2008 and 2009, but has recovered well in the last three years, with the Kingdom expecting over three million arrivals by the end of 2012.
With the ever-increasing numbers of tourist arrivals, experts say resorts are now becoming an exciting investment opportunity in Cambodia.
Traditionally tourists head to Siem Reap, attracted by the Angkor temples, and to a lesser extent to Phnom Penh. However, in recent years the Ministry of Tourism has pushed to diversify Cambodia’s “Tourism Trail” and encourage the development of the coastal region as a new destination. In 2011 Sihanoukville was admitted to the prestigious “Most Beautiful Bays in the World Club”, raising its profile internationally.
Figures from the Tourism Department of Sihanoukville show that the majority of visitors to the coastal region are Khmer, with some 82 per cent of the total visiting in the first quarter of this year being local visitors. As such, much of the hotel accommodation in Sihanoukville is aimed at the Cambodian market. Many of the hotels are basic, with few amenities and services and an there is undersupply of high-quality resorts.
But with the increasing numbers of international visitors, there is more demand for western style boutique and resort style accommodation. According to global real estate giants CBRE, the first quarter of 2012 saw a 51 per cent increase in international visitors to Sihanoukville. This increase has been partially driven by the introduction of the first flight into Sihanoukville from Siem Reap: part of the government’s plan to connect the temples of the north with the beaches of the south. With 5,741 passengers into Sihanoukville in the first six months of this year, it is proving to be popular, especially for more affluent travelers on short breaks, CBRE says.
A resort that has stepped in to meet the demand of the increasing international elite traveler in this region is the award-winning Song Saa Private Island. Opening in March 2012, it offers five-star villa accommodation, with a focus on sustainability and environmental awareness. The resort also offers villas for sale for private ownership, with the owner’s returns based on the success of the resort, allowing for 30 days usage each year and a guaranteed yield of 8 per cent for the first five years. CBRE, who are the agents for the villas, says three villas were sold in August 2012 alone, and only a limited number remain, with the majority of investors being western nationals living in Asia.
Sihanoukville and the surrounding region has seen many large-scale property development plans in recent years. Most investment has come from China, with the Union Group development in Koh Kong and the newly announced Hainan Ruijin development, named Sihanoukville-Hainan City. Each will feature a number of casinos, hotels and resorts (along with residential, leisure and retail property), largely aimed at the Chinese market. The Hainan development alone will reportedly cost $5.8 billion.
Other developers that have been attracted to the region are KPIG on the Morocot Island development and Queenco Leisure, who have a number of plots of land close to Sihanoukville’s up-and-coming Otres Beach. A number of the surrounding islands have been bought by developers and are now seeking investors to build resorts and infrastructure to support the influx of visitors. CBRE says they are currently working with the Royal Group in attracting investors to the Gulf of Thailand.
Royal Group have also signed a 99-year lease with the Cambodian government for Koh Rong, to develop the island into what they are calling “Asia’s first environmentally planned resort island” and initiate upscale international tourism on Cambodia’s coast. The key attributes to this island are its location, size and natural beauty, with the construction of an airport planned in the first phase of development. Koh Rong is only approximately an hour’s flight from Bangkok and Singapore.
To contact the reporter on this story: Rupert Winchester at [email protected]