Hotel Industry Outlook in Siem Reap Remains Gloomy

• 26 February 2021
• Local News
• 2214 Views

By Eric Wong Chon Lap

The ongoing COVID-19 pandemic has devastated the hotel industry, and it looks like the slump will continue until the end of 2021. Leisure travel is only expected to return once vaccinations become more widespread. For cities like Siem Reap or Sihanoukville, their hotel industries are being hit harder compared to Phnom Penh.

In Phnom Penh, high-end hotels are gearing up for business, and these operators are bullish about their appeal with local demand amid the pandemic.

However, in key tourist destinations like Siem Reap, many tour and hotel operators are struggling to stay in business without foreign travellers. These hotel operators are facing financial hardship and there is little to do apart from monitoring the ever-changing pandemic situation.

Although domestic tourists have kept the industry somewhat alive over long weekends or public holidays, local spending hasn’t compensated for the slump in foreign tourism revenue. It’s not only the hotel industry, but tourism-related businesses in Siem Reap are still facing a worrisome situation. As a result, the immediate challenge is to ensure these tourism-related entrepreneurs can survive the current crisis.

Given the compulsory 14-day quarantine period in the hotel and other safety procedures, the short-term outlook for leisure travel by foreign tourists, which comprises the largest source of hotel revenue in Siem Reap, remains pretty much non-existent and is not promising either.

At this stage, there are hotels remained temporarily closed, and for the hotels still in operations, many of them will soon run out of cash. Most of them can’t handle the operating costs to stay open and some are expected to permanently shut down. A few hotel operators in Siem Reap even selling their hotels at prices significantly less than their property values.

The famous ‘Pub Street’ is lined with shuttered businesses – the once busy street of bars and nightclubs in Siem Reap lays empty, with chairs stacked on tables or barring access. The few places that are open have barely any customers, except for a few locals and barely anyone is walking around the area.

Cambodia has largely managed to control the COVID-19 spread. However, the small domestic market will not be able to plug the loss of international arrivals and hotels will continue to feel the impact of depleted business.

Although hotel operators saw a hope to keep their businesses alive, the number of tourists is still lower than expected. The country won’t fully reopen for foreign tourists until vaccines are widely available. With travel demand continuing to lag below normal levels, it is projected that a slow rebound may occur in the Siem Reap hotel industry within this year, and then a moderate acceleration in 2022.

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Eric Wong has extensive experiences in the field of property consulting and development sectors, primarily within the emerging markets of Southeast Asia. From the property consulting prospective, he has lead market research assignments inclusive of providing descriptive, exploratory market research and analysis reports within the office, residential, hotel and retail segments in both quantitative and qualitative methods to determine suitable development types, scale and product mix, and address property-related matters from project positioning to absorption rates, phasing and pricing and marketing strategies etc.

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