Tourism Businesses Brace for Slowdown in 2009

The tourism industry in Cambo­dia is drastically lowering expectations for 2009 as cash-strapped travelers cancel reservations and bookings for the next few months have declined compared to previous years.

Several hotels and tour operators said that after years of steady growth in the tourism sector, averaging 20 percent annually, they have been caught off guard by the sudden slowdown.

They blamed the financial crisis in September and political instability in Bangkok as two reasons causing a drop in tourists to Cambodia, and they said the next few months could be tough.

“We may be facing a difficult time in 2009,” said Philip Setkao, general manager of the Borei Ang­kor Spa and Resort in Siem Reap. “If January, February and March are slow, we will enter the low season with most tourists already having left,” he said.

Setkao’s hotel had increased its number of rooms from 150 to 180 over the past year, but the optimism that led to the expansion has now been dashed.

Borei Angkor had an occupancy rate of 50 percent in October and had, based on bookings, hoped for a 90 percent occupancy rate from December through February. That projection has now been lowered to 80 percent, though it could be as low as 60 percent, Setkao admitted.

Cancellations have been running at 15 percent in recent weeks, compared to a normal rate of 5 percent, he added.

“It’s a big concern,” Setkao said.

According to Societe Conces­sionaire des Aeroports, the private firm charged with managing Siem Reap and Phnom Penh airports, the number of overall passengers arriving at Siem Reap International Airport is down eight percent over the first nine months of the year compared to the same period in 2007.

Passengers flying into Phnom Penh have increased by 10 percent over that same period, but this means that the total number of people flying into Cambodia has increased by just 1 percent compared to previous years.

Shanker Rajoo, general manager of the Majestic Angkor Hotel in Siem Reap, said his hotel experienced 40 percent occupancy in October compared to 60 percent in the same month in 2007. Rajoo said he had hoped for 80 percent occupancy for December and January.

“This year I don’t think we will even do 55 percent to 60 percent,” he said, adding that increased competition is also taking its toll in Siem Reap.

Tourism Minister Thong Khon said on Sunday that so far tourism is still growing according to statistics up to October-the first month after the financial crisis struck.

The statistics show that approximately 1.53 million people visited Cambodia up to October, an increase of 10 percent over the first nine months of 2007.

But tourism figures for October onward, when they are available, may reflect on international events, Thong Khon said.

“Due to the financial crisis and the political situation in Thailand, it is affects the tourism in Cambodia,” Thong Khon added.

The government will have to shift marketing away from Western tourists and instead target Asian travelers, who are less affected by the financial crisis, in order to improve the situation, he said.

Ho Vandy, president of the Cambodian Association of Travel Agents, said that only so much can be done to improve the situation in Cambodia.

“If the economy of the world improves, the tourism industry will be blooming,” he said, adding that industry officials are in the process of meeting with the government to produce strategies to fight the bookings slump.

Chan Phalla, owner of Sage Insights, a tour operator in Siem Reap, said he had expected more than 100 guests per month from December through March. But so far has only 20 guests booked for December and January.

“I am a bit worried the situation might not change, to be honest I don’t know,” he said.


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