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With herd immunity likely in 2022, is Cambodia ready to reopen for tourism?

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Biding time . . . Angkor Wat lies in wait for tourists who are expected in the fourth quarter of this year. Hong Menea

With herd immunity likely in 2022, is Cambodia ready to reopen for tourism?

The government aims to inoculate 80 per cent of the target population by June next year, giving it a head start among regional peers to reboot the sector but first, it has to do a few things to up its game

A sign on a glass counter in Phnom Penh’s latest Korean cafe and bakery chain Paris Baguette in the plush district of Boeung Keng Kang I or BKK 1, as it is locally known, tells customers that “only fully vaccinated customers can dine-in”.

It caught a few by surprise as they were asked by the staff to produce their vaccination cards if they wanted to dine in after ordering their food while some left with their merchandise, assumedly for not possessing such documents.

“Thank goodness my friends and I already got both our doses. We have been planning to go to Paris Baguette for their cakes for some time now,” said a 26-year-old marketing executive, who declined to be named.

The high-ceilinged outlet known for their pastries was packed with young people and office workers. “I imagine they must have all received their vaccines,” she added, scanning the room.

Attempts to contact a top executive of the business proved futile.

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The sign at Paris Baguette cafe and bakery tell customers only fully vaccinated persons can dine in. SUPPLIED

It is not known how many business outlets have adopted the idea of “vaccine passports” in the capital but this might be a precursor for things to come in the near future.

Even in the West, the idea of vaccine passports at outlets is moot as it is seen as discriminatory against those who do not have Covid-19 vaccines for various reasons.

Although, it should be noted that several places in the US, according to USA Today, such as universities, are mulling it in a bid to boost vaccination among students.

Closer to home, Clais Chenda, president of Cambodia Hotel Association who was unaware of the sign at the bakery, however thought that “discrimination is not a good tool to boost tourism”.

With millions of Covid-19 doses streaming into Cambodia, from China mostly, authorities are saying that herd immunity can be expected by June next year.

As of June 9, 2.3 million people had received both doses under the country’s Blossom strategy, its mass vaccination campaign aimed at achieving 80 per cent of the targeted 10 million people. Based on this latest figure, 27.7 per cent of the targeted population have been immunised.

However, 54,312 people have been rejected due to health conditions while there are people who are not keen on the vaccine for reasons known to them.

The issue of vaccine passport has not been discussed in Cambodia but it has been bandied about in Asia with countries like Japan planning to introduce it soon. China implemented it in March.

Regardless, with plans to reopen tourism, starting with Siem Reap, home of the 12th century Angkor Archaeological Park, in the fourth quarter of 2021, vaccine passports might become compulsory by then.

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Cambodia ranks second after Singapore in the tally of doses administered on the population.

It is a stance that is being taken by most nations as global travel sees an uptick in the second half of this year on the back of increased inoculation, such as in Europe where travel certificate holders or Covid-19 certificates will allow Europeans to move about the continent quarantine-free.

At the base of it though, the question of vaccination and discrimination remains a tricky one, said Hannah Pearson, founding partner of Kuala Lumpur-based Pear Anderson, a bespoke travel consultancy, adding that all countries will “inevitably end up facing it at some point”.

“Not 100 per cent of the whole population will ever be vaccinated. There will always be people who are unable to take the vaccine due to medical reasons or even their age group,” she said.

Many countries are aiming for that “magical” herd immunity of 80 per cent but even this target might be hard to hit.

“At some point, governments must decide whether they will permit local businesses to legally turn away customers or reject potential employees based on their vaccination status.

“For reopening, although discriminatory, it does make sense to base the requirements on travellers being vaccinated. This adds an extra layer of assurance for Cambodians that the risks are being managed,” Pearson said.

`State of clinical death’

A year after the collapse of the tourism sector which effected the closure of some 3,000 sector-related outlets and two thirds out of 700,000 jobs lost in the industry, efforts are being made to revive it, which in itself is a gargantuan task, given that long-standing problems including exorbitant visa fees would have to be fixed first.

“Tourism business is in a state of clinical death with the pandemic dragging on far too long. There are no tourists, no business and no money,” said Chenda.

The three-phased tourism roadmap (2021-2025) released early this year holds some answers to plans going forward, although it has been subtly criticised as being a mere “window dressing” with no concrete ideas on what quarantine would be for visitors and how to incentivise tourists and business travellers.

By September, Cambodia would start allowing vaccinated visitors on packaged tours only, which means independent travellers would be barred for the moment.

The concern here is that although tour operators would be able to design reasonably-priced packages, the add-on costs could deter tourists, said Chhay Sivlin, president of Cambodia Association of Travel Agents.

Chenda agreed, urging that the government set up a national app that featured hotels, food and beverage outlets, and tour agencies that will help the private sector reduce cost.

“[The added expenditure is because] of the commissions extorted by international online travel agencies … they are too high,” she said.

`Remove Covid-19 deposit’

In the same vein, industry players argue that quarantine and upon-arrival deposit of $2,000 to cover expenses including the Covid-19 polymerase chain reaction (PCR) test, food and accommodation, are troublesome.

The deposit has been allegedly criticised for its inconvenience, as travellers are only allowed to pay using cash and not credit or debit cards.

Added to that are the overwhelming complaints that the sum paid failed to commensurate with the standard of food and accommodation at hotels that acted as quarantine centers.

“We are worried that no guests would visit Cambodia because of the quarantine and deposit. We have requested the government to replace the quarantine process with a managed tour package that includes rapid testing.

“We also asked for the removal of the deposit and make insurance compulsory [which can] cover Covid-19 treatments,” Chenda said.

The plea to the government is palpable, seeing that this key economic sector suffered a huge loss in tourism revenue in 2020, recording only $1 billion as the number of international tourists plunged 80 per cent to 1.3 million people.

A lot more would have to be done to heave this sector back to life, among them the reduction of visa fees of $30 per visitor, which has been a point of contention for some years now as it is comparatively higher than other countries, impeding competitiveness.

This does not include airport tax (otherwise known as passenger service charge) and security charges totalling $11.82 (children) and $22.73 (adults), paid by outbound international travellers to French-owned Vinci Airports SAS’ majority-owned Cambodia Airports. This does not include value-added tax (VAT) of between $1.18 (children) to $2.27 (adults) that is passed on to the government.

Altogether, international outbound tourists pay $13 (children) and $25 (adults) when exiting the country via air.

Based on international arrivals of 6.6 million in 2019, a back-of-the-envelope calculation would show that nearly $200 million was collected by the government in visa fees while VAT would have raised the state coffers by approximately $11.2 million.

The figures are a rough estimate, as they include young travellers, aged between two and 12, where airport tax, security charges and VAT are lower.

Domestic foreign travellers pay $6 comprising airport tax and VAT while Cambodians are charged $5, according to Cambodia Airports.

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Source: Tourism Statistics Department, Ministry of Tourism

“Visas should be made free for a limited period to boost arrivals and entrance fees to temples should be reduced,” Chenda prompted, while seeking a waiver of the value-added tax or “at least lowering it to five per cent” from 10 per cent currently.

Sok Sangvar, Ministry of Tourism undersecretary of state, could not be reached for comments despite several attempts to contact him.

Provide guarantee

In 2019, the tourism sector represented 18.7 per cent of gross domestic product and nearly $5 billion in tourist receipts, making it the second largest revenue contributor in Cambodia after the real estate and construction sector.

The continued surge in cases on the heels of the latest wave echoed the situation in most of the regional countries, which meant that borders would stay shut for a while longer, although the occasional traveller have made their way into Cambodia for business and leisure.

For instance, the first quarter of 2021 clocked 70,901 international arrivals, albeit down 94 per cent year-on-year. Slightly more than half entered the country via land and waterways and the rest by air.

The highest number of arrivals in the first quarter was Thai nationals at 35,294 people, followed by 23,837 Chinese citizens and 3,562 Vietnamese.

The Cambodian airway was also kept open although only 18 airlines comprising five local firms, seven China-based companies, as well as Taiwanese (two), Korean (two) and Singaporean (two) airlines plied the air routes in Asia.

On the back of this, industry players continue to bleed with diminished cash flow, Chenda rued which was why they urged the government to help guarantee their loans with banks, seeing that many did not have sufficient collaterals.

She also hoped that banks would accept property as collateral in the provinces, something they have refused to do as it is “too far” from Phnom Penh.

In the meantime, the government has been asked to continue providing the $40 salary support to all tourism staff in the country and “not just those in seven provinces”.

A list of their pleas was shared with the Ministry of Tourism on May 31, she said, adding that hotels were ready to reduce their room rates by 20 to 50 per cent in time for the reopening.

Neighbours’ mistakes

Cambodia’s plan to reopen travel to Siem Reap – its crown jewel – falls in line with similar strategies taken by Thailand and Indonesia to start allowing visitors into their world renowned destinations - Phuket and Bali.

But as Covid-19 cases rise and fall, Thailand and Indonesia have had to revise their reopening dates as well as devise new safety measures that will keep both visitors and locals secure.

It resonated with the fallout in travel bubble arrangements between Singapore and Hong Kong as well as New Zealand and Australia due to the evolving infection rate in the countries earlier this year.

Nevertheless, talks of travel bubbles have resurfaced between Singapore, Australia, Taiwan and South Korea, notwithstanding the changing landscape.

Similarly, Siem Reap where the spread was fairly subdued up to two months ago has now seen an uptick with cases standing at 298 and two deaths as of June 10, but still way lower than Preah Sihanouk and Kampot, two coastal provinces that have a draw on tourists.

While a lockdown and curfew were inevitable, and have since been lifted but with a few red zones remaining, provincial authorities are vigilant, pending a successful nationwide vaccination.

This sets Cambodia apart from other ASEAN nations as its inoculation programme surges past them, only second to Singapore, giving it a head start in welcoming international visitors.

Pearson concurred, saying that while Covid-19 has been a leveller for destinations within Southeast Asia, in the short-term it “may well be that whichever country manages to both vaccinate a significant part of its population and reopen internationally, will win the majority of the inbound market to the region”.

As it stands currently, Cambodia is well-placed to do this, she observed.

In a recent travel advisory by the US Centers for Disease Control and Prevention, the Kingdom was identified as having moderate risk, suggesting that travellers fully vaccinate before travelling to Cambodia.

“The country earned itself an excellent reputation in 2020 for being one which has handled the Covid-19 crisis well, and it has accelerated the vaccination rollout much faster than many people, myself included, would have expected.

“Its smaller population compared to other Southeast Asian countries is an advantage - it means that procuring the vaccination supply and then administering the vaccines is easier than in countries such as Indonesia,” she said.

However, Cambodia needs to be bold, should it choose to reopen its borders to international vaccinated travellers.

Pearson said the Ministry of Tourism needs to start defining procedures, and communicating clearly and repeatedly to both local tourism stakeholders and the international markets about what they should expect when it comes to reopening.

Over the last few months, she cited that news headlines were dominated by Thailand’s Phuket Sandbox plan and Bali’s Travel Corridor Arrangement in July.

“Yet with just weeks to go, some parts of the framework for the Phuket Sandbox remain unclear, and Bali has yet to announce a firm date for reopening, or details of whether travellers need to undergo quarantine and testing.

“Cambodia can learn from their mistakes, and if it does choose to announce a reopening plan, the finer details should be as finalised as possible, to create a strong message that Cambodia is serious in its plans,” Pearson remarked.

Meanwhile, Gary Bowerman, director of Check-in Asia Hotels and Travel, a content, marketing and trends research company, found that reopening to travel at the present moment in Asia Pacific is an “extremely complicated” process even to fully vaccinated travellers.

He said while Thailand and Indonesia are discovering a full range of challenges, and “more expected” once they actually reopen, it would serve Cambodia well to “wait and watch closely” how the two countries fare in the initial stages and over the next few months.

“This is an unprecedented process, and there are myriad considerations for governments, tourism authorities and travel industry players, as well as travellers themselves.

“In particular, there will be supply excess and demand shortfall challenges and governments must also ensure the safety and freedom of residents and domestic travellers,” Bowerman added.

Travel bubbles?

While travel bubbles are back on the cards, they still give out an element of uncertainty as Southeast Asia countries encounter ever-changing Covid-19 landscapes.

In Cambodia, talks have been underway since last year to launch travel bubbles with ASEAN member states as well as China, Japan and South Korea.

But Pearson felt that travel bubbles are “not at all easy” to get off the ground, citing the Hong Kong-Singapore air travel bubble which had its start date postponed twice, despite both countries having a good level of control over the virus and strict preventive measures in place.

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Source: Tourism Statistics Department, Ministry of Tourism

“Cambodia’s tourism roadmap focused on reopening to the ASEAN and ASEAN+3 markets, including China, with travel bubbles and charter flights.

“However, we’ve seen the borders in ASEAN remain tightly shut, and China has given no indication that reopening could happen in 2021,” she said.

Instead, Cambodia might be better off considering opening the borders to vaccinated travellers from any low to medium risk country, as this enabled flexibility and avoided the risk of a travel bubble partner suddenly experiencing a virus resurgence.

“… [and] all of your inbound travellers disappearing overnight. However, if you have multiple source markets, then you are less vulnerable,” she noted.

That being said, work is needed to strengthen international air connectivity, and choices must be made between flying into Siem Reap or Phnom Penh, although, she pointed out, airlines are as keen as governments to fill airplanes.

“With the announcement of the July 1 reopening of Phuket, we saw airlines quickly add new routes to Phuket, such as El Al Israel Airlines, British Airways, Qatar Airways and Emirates.

“I imagine that if Cambodia announced that it would reopen, we would see a similar level of airline interest,” she said.

Local tourism safest bet now

For the majority of 2021, and even into the first half of 2022, Pearson rendered that the focus for Cambodia should be on developing the domestic tourism market, as this is going to be the major source of revenue for local tourism businesses.

“Cambodia’s tourism roadmap touches on domestic tourism, but there needs to be a robust strategy on how to keep it stimulated throughout the year.

“This should include mechanisms such as domestic tourism stimulus packages, supporting local tourism stakeholders to create new tourism products which are aimed at the domestic market, and potentially even adding extra public holidays, for example to compensate for the Khmer New Year which was essentially a washout in 2021, thanks to the February 20 incident,” she said.

However, she noted that the key challenge for the domestic tourism sector is that local tourists do not have the spending power of international tourists, and travel differently, for example, taking road trips rather than buses or flying.

“[Therefore] attention needs to be paid to which sectors traditionally do not benefit from domestic tourism, [such as] airlines, and then working on stimulus packages and promotions to ensure that these sectors become more attractive,” she shared.

This circles back to vaccine passports, which Bowerman opined might not be a big issue in Southeast Asia over the coming months.

“If it helps people feel safe and secure when they go to venues knowing that those who are around are going to be vaccinated. It could be an incentive to be vaccinated and also go out to spend money.

“There are so many overlays here but decidedly, vaccination as the be all and end all is kind of the point where we are at right now,” he said.

Editor’s note: The article has been edited to clarify airport tax and VAT collections by the authorities.

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