Cambodia: Time may be running out for the tourism industry, experts warn

The Tourism Ministry is hoping for a “new normal” by the end of this year but right now hoteliers, tour operators and travel agents are suffering from a far from normal situation. Rising cases of the Delta variant offer no prospect of an end to the Coronavirus pandemic. Many businesses have closed and others are on their last legs.

With business travellers forced to quarantine for two weeks and no decision on when to start reissuing tourist visas, international arrivals have fallen off a cliff. Passenger traffic at the Kingdom’s three international airports was down more than 93 percent in the year through to the end of July, compared with the first seven months of last year. The number of domestic tourists dropped by 27 percent in the first weekend of September, compared with the first weekend in July.

Chinese are the biggest visitors to the Kingdom, and Pacific Asia Travel Association (PATA) Cambodia Chapter Chairman Sinan Thourn says they are unable to visit, or – if they have already arrived in Cambodia – they are stranded.

“Airline connectivity has been decreasing almost every day. The connections are halving from one country to another, especially between Cambodia and China. There have not been many flights from China to Cambodia and almost zero flights from Cambodia back to China. A lot of airlines have been suspended. I believe there’s only a very few airlines that can fly between the two countries,” he said.

The government’s new normal envisages a gradual return of tourists .The three phases of the Tourism Ministry’s draft plan are ‘Resilience and Restart’ in 2020 and 2021, ‘Recovery’ in 2022 and 2023 and ‘Relaunch’ in 2024 and 2025.

Thourn is not as optimistic as the government, saying that while some in the tourism industry can use the downturn to upgrade their abilities and facilities others don’t have that luxury.

“They can learn and train their staff to improve their knowledge and the standard of their services. However, for people who can’t stand it, they need to find another option to survive… they need to find a new job or a new business because we cannot see clearly what’s going to happen in the future when tourism is coming back. The government has not made an official announcement yet – the government has been working hard for opening the country – but no one knows. Anything could happen, anything could change at every hour so I cannot say that tourism will be coming back this year or next year,” he said.

The government and industry groups have not released any figures on how many hotels have folded, unlike Thailand, where a recent survey by the Bank of Thailand and the Thai Hotels Association showed 52 percent of operators are considering closing temporarily, while 9 percent want to shut down permanently if the Covid-19 pandemic lasts longer than expected.

The president of the Cambodia Hotel Association (CHA) is relatively upbeat but keen for business to pick up.

“CHA is monitoring the situation carefully for an upturn in the market. Most hotels are still operating and after eighteen months of Covid-19 challenges we are anxious and working with the Royal Cambodian Government to reopen safely as soon as possible. Different provinces are facing different-level challenges. For instance Siem Reap province, being heavily tourist dependent, is experiencing a larger proportion of hotel closures. It is evident visually despite actually survey data,” said Din Somethearith, who is also CEO of Frangipani’s eight hotels in Siem Reap and Phnom Penh.

PATA Cambodia’s chairman is not convinced hoteliers are hanging on.

“I could not give you the exact number but I believe many boutique hotels have closed down and especially the entrepreneurs who have been granted property. They have handed back the property to the landlord,” Thourn said. “Some small boutique hotels have been converted from the Western style to local guest houses, especially in Siem Reap. I can say almost 80 percent of travel agents and tour operators have closed down. Only 20 percent are continuing. Some international brand travel agents are still staying and waiting for the tide to turn back.”

So it seems that if pockets are deep enough and brands are well established, there will be some kind of  “new normal” for hoteliers and tour operators. For the smaller operators the “new normal” will be looking for a new job.