More tourists may not bring salvation

via CAAI

Monday, 11 October 2010 15:00 Steve Finch

CAMBODIA’S tourism industry has enjoyed surprising success in encouraging foreign visitors to the Kingdom following the global economic crisis – arrival numbers were up last year and continue to soar in 2010. However, although more people are entering Cambodia, key indicators show the sector has a long way to go before the numbers of the pre-crisis era fully return.

Though government figures show a 15 percent rise in total arrivals in the first eight months of 2010 compared to last year, most of these gains came from the near-50 percent climb in Vietnamese visitors – already the most numerous travellers to the Kingdom. Travel industry executives will hardly be excited by this statistic as many Vietnamese come to Cambodia for only a few days and are considered to spend much less on average than tourists from North America and Europe.

United States visitors fell more than 4 percent and those from the United Kingdom dropped 3.75 percent to the end of August, a sign the sluggish global recovery is still hurting. Travellers look to be choosing conservative destinations rather than far-flung Cambodia.

The government has done a good job balancing the drop in Western tourists with increases from the region – certainly opening more border gates and reducing traffic restrictions with Vietnam has helped. But this has contributed to a structural shift in the tourism industry towards lower-spending, short-term visitors.

Government data show the average international visitor spent about US$1 less per day in 2009 compared to 2008 – just under $112 – which resulted in a fall of around $2 million across the industry. The average visitor stayed just 6.45 days last year, compared to 6.65 days in 2008. This statistic represents deeper structural problems in the sector, as the average stay was falling even before the onset of the economic crisis, a sign that more people are coming but are moving through more quickly – an effect attributable not just to more short-term visitors from Vietnam.

Cambodia has struggled to establish itself as a destination that demands attention outside of Angkor Wat and the capital Phnom Penh. The persistent challenge of attracting airlines to fly to Sihanoukville testifies to this problem – there are still no scheduled flights to the beach resort’s recently upgraded airport. This is not likely to be for no reason – Air Asia in particular has expanded all over the region. But the carrier only chooses destinations offering a good opportunity to make a profit after conducting market research, just like any airline.

The key for Cambodia’s tourism industry is, therefore, to encourage visitors to explore outside Phnom Penh and Siem Reap, while trying to recover Western tourists.

Cambodia’s Ministry of Tourism is targeting 2.4 million arrivals this year and 2.8 million for 2011, which would represent impressive year-on-year growth of 11 percent and 16.7 percent respectively. However, the key question remains: Will the industry actually bring in more money?