Wednesday, 28 January 2009

Cash dries up for tourism development in Asia

FT.com
The Financial Times
January 28 2009

The bridge linking Koh Puos island to the Cambodian mainland is under construction, but the timetable for building a yacht club, shopping centres, villas and hotels is under review as global credit markets dry up and international travel slows.

"We had hoped to finish everything by 2016, but we are probably now thinking more in terms of 2019 or 2020," says Oleg Khaidarov, construction director for the $900m (€682m, £635m) project intended to challenge established Thai beach resorts and make Cambodia a draw for more than the Angkor Wat ruins.

In a best-case scenario, executives such as Mr Khaidarov say projects will benefit from lower construction costs. But for tourism developments in Vietnam, Macao and elsewhere in Asia in early financing stages, the outlook is gloomier.

"Some big funds were very interested in our project but now everybody just wants to keep their money safe," says Kieu Lam, an official with Saigon SunBay, a Vietnamese seaside tourism development expected to cost $525m, of which only $25m has been committed.

In the absence of private funding, the Asian tourism sector is hoping to secure more government support.

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