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Business flocks to tourist town

An employee at a silk farm checks on silk worms before transferring them to fresh leaves in Siem Reap
An employee at a silk farm checks on silk worms before transferring them to fresh leaves in Siem Reap. RUTH KEBER

Business flocks to tourist town

While Phnom Penh clearly remains home to the Kingdom’s strongest central business district, the booming tourism industry continues to fuel business growth in Siem Reap.

According to preliminary results of the country’s intercensal economic census released yesterday by Japan International Cooperation Agency (JICA) and the National Institute of Statistics (NIS), there were 37,000 registered business establishments in Siem Reap this year, up 34 per cent from 27,000 in 2011.

“The vast majority of new business establishments are simply from the service sector, which is continually trying to cater for the country’s tourism industry,” Ly Visal, office manager at the Federation of Associations for Small and Medium Enterprises of Cambodia, said.

The data released yesterday, which come after the first full economic census was conducted in 2011 and before the next in 2021, found the total number of non-streetside businesses operating around the country increased to more than 514,000 as of March this year, up from 463,000 in March 2011.

In Phnom Penh, the number of businesses increased 16 per cent during the past three years to more than 98,000.

But while the data indicate how tourism dollars are fuelling economic growth in Cambodia’s tourism capital, Ho Vandy, co-chair of the Private and Public Sector Tourism Working Group, says that
the increase in business activity is not being met with adequate infrastructure to service the demand.

“If that growth figure continues into the future at such a rapid rate, it will surely impact negatively on the environment and overburden the existing infrastructure of Siem Reap,” he said, calling for more attention to be paid to waste disposal, new and better roads and tourism transport facilities.

International tourist arrivals in Siem Reap surpassed 2.2 million last year, up 38 per cent from 1.6 million in 2011, according to Ministry of Tourism data. Meanwhile, the ministry reported there to be more than 390 hotel and guesthouse businesses, 178 restaurants, 49 massage parlours and 17 karaoke bars registered in the city.

“More bars and guest houses in the town centre are not necessarily the answer in Siem Reap. During the low season, there is very high competition for tourist business,” Vandy said. “There is understandably a concentration of these businesses in the town, but we wish to see more business activity in the outskirts and other areas of the province, which give tourists a reason to see more and spend their money more widely.”

While new businesses continue to flock to tourist hotspots and the nation’s capital, lesser known provinces such as Kep, Stung Treng, Pailin and Kampong Thom are seeing only marginal growth.

In the past three years, Kampong Thom saw the smallest increase in business establishments. Registered businesses there totalled 21,000, up just 1.8 per cent from 2011.

Kep, meanwhile, which has the least amount of establishments of all of Cambodia’s provinces, registered about 1,600 operating businesses, up from 1,450 in 2011.

ADDITIONAL REPORTING BY CHAN MUYHONG

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