Hotel industry operators and the government are tightening their belts and looking at ways to retain healthy growth in this sector.
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It follows a big fall in tourists to Siem Reap and the closure of a landmark five-star hotel in Phnom Penh.
On Feb 18, 2018, the InterContinental Hotel, which opened in 1996 on Mao Tse Toung Boulevard, was renamed the Great Duke but closed last month, with preliminary reports citing financial difficulties. It was regarded at the 15-storey hotel of choice for business and leisure travellers with deluxe suites, serviced apartments and standard rooms, the latter costing $170 to $220 a night.
It also boasted a health club, massage spa, outdoor pool, barber/hairstylist salon, conference facilities, an ATM with bank, babysitting, car rental and free parking among its services.
A few days later, the four-star Apsara Angkor Resort and Conference centre, which operated for the past 18 years in Siem Reap, also announced its temporary closure for extensive renovation.
Apsara Angkor Resort general manager Teviphea Nuon, confirmed the hotel was closing but refused to comment further. However, he referred to the statement released from the hotel.
The hotel statement read: “On behalf of the entire team, it is our pleasure to have welcomed you to Apsara Angkor Resort & Conference for the past 18 years. At Apsara Angkor, we always strive to improve your guest experiences and do so by continuously upgrading our hotel facilities and services the past years.
“It is, therefore, our pleasure to inform you that we will be closed temporarily to commence our extensive renovation of the entire hotel, which will completely transform the look and services to a more fine and luxurious hotel. During this time, we regret that we will be unable to accommodate any bookings.”
Thourn Sinan, chairman of Pacific Asia Travel Association warns that all hotel owners not only in Siem Reap but also in other places should change their attitude to fight the drop in tourist numbers. He adds that if they just wait for customers to walk in and not proactive enough.
He adds that some hotel owners build a hotel and inject a lot of money into it, but they do not employ the highly skilled, quality and professional staff needed to run each department. Thourn adds that when it comes to investment and human resources, some hotel management leaders have inadequate experience and training to do a good job.
He asks, “Do they have marketing knowledge? Do they have the sales knowledge? Are they professional?” Thourn said some Cambodian hotel owners lack experience and don’t keep up-to-date with hospitality trends by attending conferences.
“When we talk about marketing, the majority of hotels in Cambodia rely on online travel agents [OTA] such as Booking.com, Agoda.com TripAdvisor.com. They focus on them. They think they can help their hotel. However, in the hotel sector, owners should not rely on OTAs. We have to develop relationships with the travel and tour companies. We need corporate clients. We have to market ourselves aggressively,” Thourn stresses.
He adds that the main mistake of many hotel owners in Siem Reap and other places make is that they do not get involved actively with governments or associations to promote their operations as a tourist destination. They promote their hotel, but they forget to promote their destination, he says.
“If they are in Siem Reap, they have to talk about the attractions in the region and what it offers tourists,” Thourn adds.
He went on to say: “The government has its platforms, tourism associations have platforms and the private sector also has its platforms to encourage tourism. But a lot of hotel staff do not join or care about that because they think they have customers and they have online booking and that is enough.”
Clais Chenda, president of the Cambodia Hotel Association, which has 100 members, confirmed that tourist numbers had dropped, but she did not think that it was enough to force hotels to close.
In her view there might a lot of other reasons behind the closure of the hotels, which we may not know. “It may relate to problems between shareholders, family issues, taxes, lack of management or cash flow… Some closures might just last a short time while the structure changes and some shares are sold.
“Last year we saw Western tourism drop quite a lot while Asian tourism was on the rise, but now there is a clear decrease in Asian tourism too,” Chenda adds.
“I think that currently, the drop in tourism is not serious enough to push hotels to close their doors. However, if the trend goes on, it could be bad for everybody.
“The private sector and the Ministry of Tourism urgently need to work hand-in-hand to promote and market Cambodia abroad, not forgetting the local market, which is slowly growing too. We have to discover and create more tourism sites and products.
“We have to diversify the accommodation available including community homestays, guesthouses, hotels from one to five stars, so that it fits a wider market.
“We must also strengthen the quality of our tourism services and hospitality. Waste treatment and hygiene are also fundamental. Most of the Cambodian roads, towns and villages could be much cleaner and it would benefit the Khmer people while attracting more tourists.
“All staff and civil servants dealing with tourists should be able to make them comfortable from their arrival at the airport or at land borders, They shoud smile, be polite and helpful. Ethics and professional behaviour are of the utmost importance if Cambodia is to stand out in a very competitive market. We are not alone on the planet. We need to work.”
The Tourism Ministry says the total number of hotels in the Kingdom was 152 from one-star to five stars with 17,450 rooms across the country in the first five months of 2019. A total of 21 were one-star hotel, 19 had two stars, 33 had three stars, 41 were four-star establishments while 36 had five-star status. Siem Reap and Phnom Penh had the most hotels, with 60 hotels and 40 respectively.
Top Sopheak, the spokesperson of the Ministry of Tourism, accepted that the number of tourist arrivals dropped in Siem Reap province, but he says the number of tourists increased across the whole of Cambodia. He adds that in 2019, the ministry expects to find 6.6 million tourists visited the Kingdom when all the numbers are counted.
Strategies to attract
He adds that the government has already studied and has mechanisms in place to cope if the tourist numbers continue to decrease in Siem Reap. He adds that the government is also working with all stakeholders to solve the issues happening especially in Siem Reap, by addressing strategies to attract more people.
“We have released four key points,” Top says. “First, we need to diversify the tourism products in Siem Reap besides Angkor Wat. Second, we push the competitiveness of national and international tourists – especially to encoursge internal foreign tourists to visit Siem Reap, We are working with package tour companies within the private sector to promote tourism,” Top adds.
“Third, we will improve our quality of tourism products and services to bring in more quality tourists. We are trying to make our services better to favour tourists. Fourth, we have to increase the promotion of Siem Reap as a destination especially to present it as having a good image. We try to create a good image of Siem Reap. Those are our four main challenges for 2020 and 2021 in Siem Reap – to attract the tourists back.”
Top also calls on hotel owners to comply with the guideline of the tourism ministry both in terms of standard principles and management skills. He wants more to compete with the ministry to make sure that services are better.
“The close of the Great Duke (Inter-continental) was a financial issue. However, regarding Apsara Angkor, the owners announced its suspension because they want to fully renovate it. After all it opened about 18 years ago so it needs modernising.. They also have Angkor Palace,” Top says.
Good quality services
Although Siem Reap is suffering a slowdown in the number of tourists, mostly the hotels are coping, managing to maintain a good quality of services and products, promoting their venues so they are still attracting customers, Top adds.
“There is no oversupply in Cambodia. If there are big events here, we find we lack enough accommodation, but the flow of tourists is up and down because of the high and low seasons. What is the most important thing is service, We try to make sure that the service is competitive, with the best quality servuices, making sure guests are comfortable and happy so they will comr again,” he adds.
“The closure of the hotel has not triggered any damage to the tourism sector or hotel industry. They can suspend business then reopen when the renovation complete. If the in tourists causes hotels to close, will be concerned but losing one or two is because of often a personal issue and mostly they can continue to operate,” Top says.
Another thing is that Cambodia is not adequately promoted enough widely around the world. The price of tour packages is a bit expensive, air connectivity is limited. He adds that traffic, waste and social order also contribute to losing tourists.
“In this situation, if the hotel is cutting costs, they will eventually all close,” he said, adding that Cambodia must attract more international events, expos, meetings and conferences and support the private sector which has an ambition to stage an activity.
“They must promote the destination as much as possible. More events such as more expos is good for Cambodia.
“The government should encourage this and the private sector should spend money to support this,” he concluded.