Logo of Phnom Penh Post newspaper Phnom Penh Post - Big city hotels beg for government help

Big city hotels beg for government help

Big city hotels beg for government help

Some of the capital's top hotels have approached the government for financial assistance in the wake of the global economic slowdown, the war in Iraq, and most of all, the fall-out from the SARS virus that has kept travelers from the region.

Although operators said they were optimistic the current poor environment would improve, the city's main hotel association said it asked the government for help last month.

And Kong Chheng Lee, the coordinator at the main hotel association in the tourist town of Siem Reap, said hoteliers there "were not sure yet" whether they would do the same.

The Phnom Penh Hotel Association (PPHA) asked for financial relief in a May letter to the Ministry of Tourism. The association asked for an easing of hotel taxes, which are set at around 15 percent, and called for rentals due on properties leased from the state to be postponed.

"We haven't had a positive response from the government yet," said Tek Ket, the PPHA's vice-president. "At the moment, I don't expect the government will help us repeal the tax."

Tek Ket said rental payments could be postponed without the approval of the National Assembly, but said the lawmaking body would have to meet to repeal the hotel tax.

The Minister of Economy and Finance, Keat Chhon, was out of the country, and the two secretaries of state refused comment on the matter. However the Minister of Tourism, Veng Sereyvuth, said he was sympathetic to the association's request.

"We agree that some of the requests are reasonable and we have forwarded them to the government," Sereyvuth said. He added that it was clear that help was needed, and said that the sooner that assistance came, the better.

The Hotel InterContinental and the Sunway Hotel have been running at about 15 percent capacity since the SARS virus spread around the world earlier this year.

Edwin Bucher, the general manager of the InterContinental, said bookings had fallen to around 1,400 rooms a month against capacity of 10,400. He felt the Iraq war had made little impact on the decline in the numbers staying at his hotel.

"The war didn't really affect us that much," he said. "Most of our business originates from Asia, [so the effect of SARS has meant that] nobody travels."

The Cambodiana Hotel, which is running at 23 percent capacity compared to an expected 55 percent for this time of year, has already shut two of its five stories, said resident manager Pierre Bernard. Both floors were re-opened for the ASEAN Regional Forum, but will close once delegates leave.

Despite the current gloom, the PPHA's Tek Ket said hoteliers were confident that business would soon begin to return to normality.

"We expect the situation to improve in September because ASEAN has announced that there is no SARS in ASEAN countries, and it will be the high season for tourism," Tek Ket said.

The InterContinental's Bucher warned that the expected recovery could start slowly.

"Tourists need to be convinced that SARS is under control. It will take a little while to regain consumer confidence," he said.

The airline industry has been similarly hurt, with operators' flights to Phnom Penh slashed by half in April. A board member at the Airline Operator Committee (AOC), a trade association, said the AOC planned to ask for help from the government soon.

DragonAir, which operates between here and SARS-affected Hong Kong, cut the number of its flights from four a week to just two in April. Alfred Sung, the country manager for the airline, said those 158-seat planes were practically empty "but now they are full".

Sung said that DragonAir hoped to reinstate its four flights a week at the start of July.

"Everything will be decided in the next week. It would be hard for us to make a decision at the last minute because we have to tell our passengers about it," he said.

Tek Ket said it was too early to say how much the SARS virus had cost the hotel sector. Tourism was worth $576 million last year-about 20 percent of GDP-and government figures showed that as of early May the SARS virus had already cost the country $10 million.

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