It's time to holiday in Cambodia

The Pavilion is a quiet retreat in a colonial mansion, in a city that has reinvented itself from haven for outlaws and sex tourists to the region's burgeoning luxury tourism hostspot

The Australian Business with The Wall Street Journal

Patrick Barta November 11, 2008 It's no longer easy to purchase AK-47 assault weapons here. Vendors have stopped selling marijuana in public markets, and fun-seekers can no longer lob live grenades behind the military compound outside of town.Once famous for being the most lawless city in Asia - a wild west frontier of ex-soldiers, drug addicts and criminals - Phnom Penh is rapidly becoming the latest Asian tourist playground of spas, handbag dealers and boutique hotels.

Many in the city's hardened expatriate community don't like the changes, saying they've eroded much of the sense of adventure the capital once had.

But for visitors and for some newly wealthy Cambodians, Phnom Penh has become a more inviting place, retaining its Buddhist temples, wide avenues and French villas even as it pushes seedier elements underground. Before, high-end tourists only went to Angkor Wat, Cambodia's renowned temple complex. Now, they're stopping off in Phnom Penh, too.

View The Wall Street Journal's Phnom Penh slideshow.

The transformation was long in coming. After Cambodia won independence from France in the 1950s, Phnom Penh was one of the most popular cities in Asia: a miniature Paris in Indochina, with cafés, ornate lampposts lining the riverfront and landmarks of the nation's rich history including the Royal Palace, a compound of extravagant yellow and white buildings that included a pagoda with a floor covered in silver tiles.

But the Vietnam War brought chaos to Cambodia. The Maoist Khmer Rouge rebels overran Phnom Penh, forcing all its residents into the countryside and turning the once-vibrant city into a ghost town. When Vietnamese soldiers ousted the Khmer Rouge in the late 1970s, Cambodia fell into years of chaos and civil war.

The city's rowdy reputation only grew after the 1998 publication of Amit Gilboa's Off the Rails in Phnom Penh, a Hunter S. Thompson-style tour of the city, which it called an "anarchic festival of cheap prostitutes, cheap drugs, and frequent violence." Gilboa described a public market selling AK-47s for $100 and Chinese land mines for $15.

As for tourism, aside from the posh Hotel Le Royal, established in the 1920s, many of the other hotels were seedy guesthouses. Recommended restaurants served Cambodian fare (which is similar to Thai cuisine) uninspiringly, with a focus on cheap, stringy meat.

Today, Phnom Penh still has plenty of rough edges and crime. At certain places, visitors can still order "happy pizza," or pizza with marijuana topping. But in other ways, it's a different city entirely.

The Government, which is tightly controlled by Khmer Rouge defector Hun Sen, has destroyed 200,000 or more firearms through a program in which citizens voluntarily lay down their guns. It has also shut down the military-hardware market and closed some of the most infamous brothels. (In June, aggrieved sex workers even gathered at a local temple to pray to Lord Buddha for relief from the crackdowns.)

Foreign cash is pouring in, with some investors calling Phnom Penh the new Ho Chi Minh City, after the city that's Vietnam's emerging center of consumption. Property values have soared and Phnom Penh is getting its first skyscrapers. One Cambodian developer even wants to dredge the Mekong River all the way to Vietnam, about 100km south, to create a deepwater megaport, and other financiers are planning a satellite city with offices and malls.

All that activity has brought more well-heeled visitors and more hotels. The Quay Hotel along the riverfront opened earlier this year, which calls itself Phnom Penh's first "carbon-friendly" hotel (it measures carbon emissions and then buys "offsets" through carbon-reduction programs) and features minimalist décor of the 2001: A Space Odyssey variety, spaces "infused with aromatherapy" and a rooftop wine bar. Other new hotels include the Pavilion, an elegant boutique property in a colonial mansion hidden behind the Royal Palace.

The palace itself remains the city's top draw. Besides the silver-floored pagoda, this compound for Cambodia's largely symbolic royal family includes a throne hall and collections of royal regalia and artifacts. A bigger artefact collection - the country's largest - is in the National Museum, one of the city's most impressive Cambodia-style buildings.

Phnom Penh tourism is quickly moving upscale. Of the two main sites commemorating the Khmer Rouge genocide, the Tuol Sleng museum is far more informative. It was a former school that became a prison and torture center and now includes powerful displays including photographs of people murdered by the Khmer Rouge. The Killing Fields, outside of town, is one of the many known mass graves for victims. (That site gave its name to Hollywood's grim 1984 Oscar-winning epic about the Cambodian massacres.)

A visit to one of these sober places makes a striking contrast with the vibrant life growing outside. One example: the small but growing shopping district centred on a road named Street 240, with a wine bar, a shop selling homemade chocolates and bonbons and boutiques selling $40 handbags and pillows. (Visitors to Spa Bliss can get a carrot-and-pineapple skin wrap.)

Another contrast to the past - new high-end eateries like the Quay Hotel's slick Asian fusion restaurant Chow, where the specials include fresh lotus-root salad with caramelised suckling pig, or soba noodles with marinated roasted snapper and crushed peanuts, all served with a backdrop of thumping club music. Van's, a French restaurant in a towering colonial mansion, serves fried beef wrapped in coffee and Cambodian pepper crumbs as well as stuffed pigeon.

But a backlash is brewing, especially among expatriates, many of whom came to Cambodia to escape such luxuries.

"I don't know if I would have stayed here if I came here now," says Pierre Yves Clais, a former soldier from France who worked with a United Nations-supervised force that operated in Cambodian conflict zones in the early 1990s. "Back then, it was an adventure," he says, with guns, wild bars and lots of dangerous characters. Now, he runs a provincial hotel and calls himself "bourgeois." At least "you can make more money" now, he says.

Residents have other complaints. Tuk-tuks, the ramshackle taxis used for short trips around town, now sometimes cost $2 instead of $1. Rents have soared. And precious little money is filtering down to everyday Cambodians, whose incomes remain among the lowest in Asia.

All the spending at new cafés and boutiques is "so strange," says San Sovannara, a 24-year-old Cambodian driver and boxer. At the Chow restaurant, he says, "people spend so much money for food - the same as my monthly salary!" Still, his earnings come mainly from the tourist trade. He hopes to run a hotel someday.

WHAT TO DO

Aside from the Royal Palace, National Museum and the institutions remembering the Khmer Rouge genocide, Phnom Penh has other major attractions:

Markets include Central Market, in an Art Deco building, and the Russian Market (named after the Russians that shopped there in the 1980s), known for its puppets and silk cloths.

Wat Phnom: A hilltop temple complex good for escaping traffic and for people-watching. Visitors can sometimes take an elephant ride at the base.

Boat Cruises: Guests can charter boats along the riverfront for a half-hour cruise up the Tonle Sap River and into the Mekong, with views of the city.

Shooting Range: A bit of wild Phnom Penh survives at the city's main shooting range, on a military base near the international airport. Employees say they've run out of the grenades once sold to eager tourists. While it's still possible to fire automatic weapons there (about $1 per bullet), the old pastime of shooting live rounds at cows and other animals is forbidden.