Cambodian tourism sector, slowed down by the crisis, turns to its neighbours

Kep (Cambodia). 11/01/2008: Back to empty beaches?

©John Vink/ Magnum

The tourism sector has been the spearhead of Cambodia’s economic growth over the past decade, but will it be spared by the economic crisis which affects the Kingdom? The Cambodian Ministry of Tourism and representatives of the tourism industry show their optimism and claim they only fear, at worst, a slowdown in the frenzied growth which the sector went through since the end of the 1990s.Minister of Tourism Thong Khon recently told Ka-set that the number of tourists in January 2009 had “only” gone down by 2% compared to this time last year when 223,581 tourists, out of an annual total of 2.1 million, entered the Cambodian territory. Generally speaking for the year 2009, the Minister plans a growth rate situated between 0 and 2%, quoting predictions made by the World Tourism Organisation (WTO). However, small enterprises and those living on little jobs in that sector do not agree with the figures.



Cambodia turns to its neighbours
“We will make sure that the growth in the number of tourists reaches at least a rate situated between 0 and 2%, if not more. If we are not in a position, today, to say with certainty what the sector growth will be this year, we are nonetheless looking to maintain at least the same number [of tourists] as in 2008”, the Minister of Tourism Thong Khon declared recently, showing caution and trying to be reassuring at the same time. Despite the crisis and the slight decrease in the number of entries officially registered at the beginning of the year, the Minister would like to believe that his policy favouring regional shorthold tourism, mainly coming from the ASEAN+3 (Brunei, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, plus China, South Korea and Japan) country-members, will pay off and will weaken the effects of the global decline in the traffic of tourists coming from European countries and the United States.

“Longhold tourists are less numerous today because transportation now represents heavy expenses for them. We will therefore encourage shorthold trips, since air transportation is less expensive in the region. Also, road transportation like buses are a lot cheaper”, the Minister analyses, asserting that he obtained the consent of the head of the Cambodian government Hun Sen to facilitate the crossing of tourists from neighbouring Lao PDR and Vietnam. This strategic choice seems logical in the eyes of Asian tourists, who have now become a majority in Cambodia. Indeed, according to the Minister, 60% of foreign tourists come from a country in the Asia-Pacific region, when only 20% come from Europe and 10% from the United States. According to official statistics, all in all, 40% of visitors come from the ASEAN+3 region, out of which 20% come from the member-states of the regional organisation. Moreover, Thong Khon points out, 40% of them enter Cambodia via land.

A winning ticket to Angkor?
The government also intends to encourage longer stays, particularly in sites other than the town of Siem Reap, home of the Angkorian temples. It is with this in mind that the government decided on the relaxing of rules regarding the use of entry tickets and passes to the Angkor temples. From now on, visitors will have a week to use their three-day pass, and a month to use their 7-day pass, so they can punctuate their temple visits with other activities and the discovery of other places of interest. “Now, tourists are free to make their own choices. They can visit Angkor today and enjoy the seaside tomorrow, then come back to Siem Reap to spend another day or two visiting Angkor or other sites, with the same pass. Financially, we will be on the winning side, because they will be spending their money elsewhere than in Siem Reap. And tourists are pleased with that”, Thong Khon boasts, and adds that this measure is a response to demand identified through strategic studies. “I believe that with that policy, we will get victory”, the Minister claims without mincing his words.

Worried but confident
On the part of representatives of the tourism industry, the same optimism, tainted with caution, seems to be the rule. No hotel, restaurant or travel agency has yet closed down or made any staff redundant, says Ho Vandy, co-president of the working group on tourism on the Government-Private Sector Forum (G-PSF) and head of Cambodia’s Association of Travel Agents (CATA). But the members of his working group, composed of 21 representatives of travel agencies, hotels, restaurants and the Société Concessionnaire des Aéroports (SCA), are not necessarily resting easy, he says, as they are all keeping their eyes on the evolution of the global economic downturn. Ho Vandy and his partners are working hard together with the authorities to “solve some priority points” and “encourage tourism” in times of crisis.

“We have asked the Minister of Economy and Finances, last November when the crisis only just started, to lower the price of the visa and to abolish it for ASEAN nationals”, Ho Vandy cites as an example. “This topic was brought back on the agenda during the ASEAN Tourism Forum, held in Hanoi on January 8th and 9th 2009. And as it was the case for the relaxing of rules concerning Angkor tickets, we obtained a positive answer for that request, although it is not official yet”, Ho Vandy says, delighted. He hopes that those measures will contribute to curb the decrease in the number of tourists, which he estimates reaches 2.5% since the start of this year, compared to the same period of time in 2008. Yet, this first decline happens after ten years marked by an extraordinary increase in the number of tourist entries in Cambodia – an average growth of 25% every year, according to estimations of the Asian Development Bank (ADB).

From 2% to 30% less tourists
If we were to believe other protagonists working in that sector, the situation is a lot more serious than what the authorities and representatives of the industry, close to the inner circles of power, would like to believe. Moeung Son, president of the National Association of Tourism Enterprises, gives worrying figures: according to the information he collected with guides and personnel in the hotel and catering industry, tourist activity is said to have gone down by 30% compared to the beginning of this year. This plummeting is partly due, he explains, to the devaluation of certain currencies, especially Asian, in front of the dollar. “All exchanges are made in dollars in Cambodia. So when the value of a currency of a country from where tourists come starts going down in front of the dollar, it creates problems”, he deplores. For example, Koreans, who are the largest group of tourists in Cambodia, saw their currency (the won) lose more than 16% of its worth facing the dollar, during the first months of 2009. Europeans do not have that problem, since the euro has remained stronger than the dollar. But they too, face difficulties, like the threat of unemployment, generated by the crisis”, Moeung Son says.

You Khemarak, who has been an independent Cambodian guide and interpreter in French and Spanish since 2001, also puts forward figures closer to 30% to evaluate the decrease in his monthly wages over the course of several months. “Before, in a month, I accompanied about ten groups of tourists, for an average of 25 days. Today, I hardly work 18 days a month”, he says. Same goes for Tan Chhunsinh, a young guide hired by a Chinese travel agency, who noticed a first drop right after the Chinese New Year, at the end of January. His wages are still comfortable, around 800 dollars a month, but he used to earn 200 more just a few months ago.

Self-employed: the first to be affected
Phat Raby, a self-employed tuk-tuk driver in Siem Reap, finds it hard to makes ends meet: last year, showing tourists around made him earn 150 dollars per month. In 2009, his monthly salary hardly goes over 50 dollars. Phat Raby owns his house and feels lucky compared to other colleagues who have to pay for a 30-dollar rent for a room in Siem Reap. Unlike those who are employed or affiliated to travel agencies and still have customers, the situation of self-employed drivers is insecure: they pace up and down the streets looking for tourists, a rare species these days. In order to make sure he gets a few customers, Raby joined the Bus station association linked with the private bus company Mekong Express. “I pay thirty dollars every month to be able to go to the station and pick up tourists coming from Phnom Penh and take them to their hotel”, he says. “If they ask me to be their driver the next day, I am lucky. Otherwise, it is very hard.”