Experts: Luxury hotel closures related to internal issues

• 2 January 2020
• Local News
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A number of four-star and five-star hotels have recently announced the closure of their businesses citing economic reasons for their demise.  Tourism experts have said that business closures are not a bad sign for tourism in general.

The 23-year-old former Inter-continental in Phnom Penh -The Great Duke Hotel – announced the closure of its operations on 31 December with an economic downturn cited as the reason.

H.E. Top Sopheak, spokesman for the Ministry of Tourism, said that the hotel’s closure on 31 December 2019 was not due to the number of foreign tourists. The four-star Apsara Angkor Resort Hotel in Siem Reap has also suspended operations citing a decrease in tourist numbers.

“It’s a regret for the five-star hotels, especially the older ones, to close operations. … The closure may be related to the economy, or internal investment, but it’s not related to a decline in tourism,” he said.

He added that the decline in foreign tourists is a global trend although the number of foreign tourists visiting Cambodia has been steadily increasing.

Clais Chenda, President of the Cambodia Hotel Association, said she has seen the overall increase of tourists as a positive sign for the hospitality industry in Cambodia.

“The recent closures of the hotels were due to more internal reasons, as hotels had a majority or had to resettle their boards of directors or other internal reasons,” she said. “But overall the closure of the hotels is not related to a decline of foreign tourists to Cambodia, because other hotels are still operating normally.”

Ms Chenda added that the recent approval of a series of high-end hotel investment projects, especially in Preah Sihanouk province, reflects the increasing demand for hotels in Cambodia.

Ms. Ann Sothida, Country Director of CBRE Cambodia, said that the main factors keeping hotels running are having good customer service and efficient marketing promotions.

“From my view, in the hotel sector, there are two factors – customer service and marketing – that need to be studied carefully in order to compete in the market,” said Ms Sothida.

With increasing demand, each hotel has become more competitive and the sector is attracting more brand hotels to step into the country’s market.

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