Financial crisis casts shadow over Angkor Wat

Telegraph.co.uk

The Asia File
by Ben Bland

Dec 20, 2008

I'm currently in Siem Reap - the Costa del Sol of Cambodia - working on an upcoming story. It is evident that Cambodia is really starting to feel the pain of the global economic downturn, particularly as it doesn't have the financial ammunition of larger, more well-developed neighbours such as Vietnam.

Scores of new hotels, restaurants, bars and massage parlours have sprung up over the last five years here to cater to the growing numbers of tourists from Europe, the US and (in particular) Asia visiting the amazing temples of Angkor.

But the problems in Thailand and the accelerating global slowdown have taken their toll and businesses tell me that tourist numbers are down by around 30pc on last year.

The tuk-tuk drivers, who are used to complaining about their lack of business, are struggling even more than usual. Many of the tourist-focused restaurants are empty at dinner time and the bar scene on Pub Street, in the heart of town, is much less rowdy than it was just a few months ago when I was last here.

According to the Phnom Penh Post, destinations outside the capital Phnom Penh and Siem Reap are suffering much more severely, with occupancy rates down by as much as 70pc on last year in some hotels.

The government has got together with various players in Cambodia's tourism sector to set up a taskforce to try to reverse the slump. But, even as the crisis in Thailand appears to be easing, the world is sliding further into the economic mire, with the outlook deteriorating rapidly in Asia.

That is seriously bad news for Siem Reap because Asian tourists (particularly Korean, Japanese and Chinese tour groups as well as some Vietnamese and Singaporeans) have been a major source of growth.

And tourism is vital to Cambodia's fledgling economy, generating around 15pc of GDP.