With most tourists arriving from Bangkok, Siem Reap tourism is hit hard by Thailand's political troubles, as well as global economic worries

SIEM REAP

Photo by: PETER OLSZEWSKI

Angkor Palace Resort and Spa general manager Weng Aow says his resort won’t be offering discounts despite a substantial decline in tourist arrivals.

THE world economic crisis coupled with the tumultuous political climate in Bangkok could profoundly affect tourism in Siem Reap,  and the city's business leaders are re-evaluating their strategies.

Pascal Deyrolle, general manager of La Residence d'Angkor hotel, said the imperiled stock market would affect some travellers, and the negative news coverage of the political situation in Thailand would have an immediate and direct effect on tourism. 

"We had the temple, then we had the problems with the prime minister for three weeks, and now you have fighting in the streets," he said, "And because almost everyone flies to Siem Reap via Bangkok, it is our bloodline."

Deyrolle, also vice president of the Cambodian Hotel Association and president of Siem Reap's division, said fewer vacationers coming to Siem Reap could have a snowball effect.  "Flights will then be consolidated.  This will make it even more difficult and expensive for people to come here, resulting in even fewer people."

Declining international arrivals

Ministry of Tourism figures show the number of travellers entering Siem Reap by air this year is already down by about 25,000 visitors compared with last year.  Although there were more travellers entering Siem Reap by land and sea, and more business travellers entering Phnom Penh, a decrease in those coming to Siem Reap by air would affect higher-end hotels, Deyrolle said.

"Between the global crisis and Bangkok, now is not looking very flush," he said.  "For the luxury hotels, the first and second quarters of the year may have been better than last year, but the third and fourth quarters can''t be, because we just don't have the people arriving from Siem Reap International Airport."

Angkor Palace Resort and Spa general manager Weng Aow said international arrivals have been steadily decreasing since April, compared with last year's numbers.

He offered figures from the airport that show that international arrivals at Siem Reap dropped to 54,000 visitors in April, compared with last year's 57,000.  In May, there were 44,000 international arrivals, a 3,000-visitor drop from a year ago.  By June, there were 34,000 international arrivaIs, as compared with 43,000 in 2007, the biggest year-to-year decrease to date.  In July, international arrivals dropped from 44,000 last year to 39,000 this year; in August, from 54,000 to 47,000; and in September, from 44,000 to 38,000.

Some major hotels have yet to feel the effect of the downturn because many guests have booked package deals months in advance. But an increasing number of travellers are now booking online, and this decreases the lead time needed before planning holidays.

Going with the flow

"We'll have to see whether these people decide to wait out the current economic situation and save their money," Deyrolle said.

The economic unpredictability also concerns smaller operators. Charlie Kumar, manager of the tourist hot spot Angkor What? bar, said, "We'll have to go with the flow. This kind of business is always risky.  We've got to keep our fingers crossed and hope everything goes well."

Hotel de la Paix general manager Nick Downing said, "The natural flow is that the higher-end hotels are more insulated from economic fluctuations.  Our supplier travel agencies are not expecting a major shift down.

"But if the temple issues continue to flare up, that could be a major problem for us.  From our side, we'd like those issues to clear up and not be blown out of proportion either."

Downing also asserts that even if high-end hotels don't suffer directly when it comes to bookings, the businesses won't be immune from what is happening around them.

He said, "We can't be shut off from the community around us.  If they struggle, we struggle.  If the restaurants struggle and their quality suffers, our guests suffer, and it affects the whole country."   

According to some hotel managers, travel agencies are beginning to panic because they reserve seats on flights to sell package deals, and now they cannot find customers.  These agencies are looking for airlines and hotels to find ways to attract more customers, but there are no easy solutions.

'Lower rates won't help'

Weng Aow believes that cutting costs is not the answer for hotels.  "I think our hotel, and most of the bigger hotels, will be able to weather the current situation," he said.  "We are more conscious of cost, but we do not engage in cost cutting that will compromise quality."

Didier Lamoot, general manager of the Sofitel Phokeethra Royal Angkor, said that lowering hotel rates will not attract more guests to the higher-end hotels.  "That's like telling Louis Vuitton to give rebates because we have an international crisis.  This is not a good sign to give to the market.

"We are in a situation that is incredible, and we must have the flexibility to change to get business.  We must focus on every segment of the economy to get business."

Lamoot also believes that an open-sky policy will create cheaper airfares into Siem Reap.  The route from Bangkok to Siem Reap is dominated by a monopolist, which artificially increases the price of plane tickets.

Deyrolle said hotels will now look for niche markets that aren't so adversely damaged by the stock market crash. "You need to go to the mega mega rich because that market can only go up."