How the Hospitality Industry Recovered with the Participations of Domestic Travellers

• 6 November 2020
• Local News
• 2725 Views

By Eric Wong Chon Lap

Cambodia is a country with full of festivals, holidays and celebrations. After months of staying home following the COVID-19 outbreak, domestic demand for travel has exploded which can be seen with the recent Pchum Ben holiday where the easing of restrictions became the first sign of recovery for Cambodia’s hospitality industry.

As a result of the COVID-19 outbreak, overseas trips were cancelled without any idea about where to go and when to plan the next one. Thus, domestic trips become the only possibilities to let off steam for most of us.

Domestic travel declined in the first half of the year when activities came to a complete halt due to the country being under lockdown. However, since the easing of lockdown measures, there were good signs of domestic demand with a significant increase of travellers. Some domestic flights resumed operations after a couple of months of suspension, but operations are still retained on minimum routes.

Destinations such as Kampot, Kep, Siem Reap and Sihanoukville etc. (all within driving distance) are also attracting more tourists because many tourists continue to refuse to fly, preferring instead to drive. As demand slowly gets back on track, the market during the Pchum Ben holiday also witnessed a similar trend going forward as hotels offered special rates and packages in order to make up the losses occurred in the past months.

On the other hand, the challenge is that no one really knows how long the COVID-19 pandemic will last, and how long hoteliers will have to rely on domestic travellers. It is important, at least in the short run, that these hotel rooms are able to sustain the arrivals of local guests.

Apart from attractive pricing, which is a factor to draw travellers to stay in their hotels, in an age where unique experiences and social media exposure are crucial, social media such as Facebook or Instagram could also be the key to draw in local demand. Nonetheless, the good news is that Cambodia has been viewed as one of the countries which have successfully contained the local transmission, and this will increase confidence for tourists to come to Cambodia when the outbreak is over.

While this is the first sign of recovery for the hospitality industry that the market has seen in months, it will be interesting to see if this demand will only be a temporary boost in the market, or will slowly dwindle as financial burdens increase for locals while the economy is still in a very bad shape. It is obvious, looking at the amount of hotel room supply in the market, particularly in places like Phnom Penh and Siem Reap, that domestic demand alone will not be able to feed the entire market. As a result, the market is anticipating that the outbreak will soon be over so that it can attract a solid balance of both domestic and foreign travellers in the long run.

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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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