Economic Outlook for Southeast Asia, China and India 2023

Cambodia

 

Source: OECD Development Centre based on data from UNWTO (2022), ), “Global and regional tourism performance” (database), UN World Tourism Organization, https://www.unwto.org/tourism-data/global-and-regional-tourism-performance (accessed on 26 November, 2022) and WTTC (2022), “Cambodia 2022 Annual Research: key highlights”, https://wttc.org/DesktopModules/MVC/FactSheets/pdf/704/83_20220613154919_Cambodia2022_.pdf.

Introduction

Cambodia is a key tourist destination home to Angkor and the Preah Vihear Temple, both UNESCO World Heritage Sites. A secondary attraction is the seaside resort destination of Sihanoukville and further beach tourism developments emerging from the Kep Tourism Development Master Plan (2022-35). The construction of new international airports at Phnom Penh and Siem Reap is expected to usher in a period of increased travel to Cambodia, with accommodation for larger planes and expanded welcome capacity.

Since relaxing entry requirements in 2021, the latest numbers suggest that tourists are returning to Cambodia in droves. In 2022 international tourists arrivals increased from the pandemic years to more than 2.27 million, with an increase of hotel occupancy to 75% from around 15% in the previous year and international tourism receipts of USD 1.4 billion from USD 184 million in 2021 (Ministry of Tourism, 2022).

As the host of the upcoming Southeast Asian (SEA) Games in 2023, Cambodia is poised to get a further boost in tourism. The Vietnamese carrier Bamboo Airways has already begun operations on the Hanoi-Siem Reap route, and Bangkok Airways is operating from Phnom Penh. Flights from Singapore and Malaysia are expected to increase tourist arrivals to levels higher than before the pandemic. Cambodia Airways routes from Singapore, Siem Reap and Da Nang will restore Cambodia as a popular destination for cultural heritage and seaside resorts.

Current situation and policy challenges

International airline connections and airport expansion

Cambodia depends heavily on Thailand and Singapore as regional hubs to bring in tourists. The country’s aviation authorities perhaps need to make greater efforts to invite airlines from beyond Southeast Asia, the People’s Republic of China (hereafter “China”) and South Korea. Direct flights from Europe and America would have the potential to increase tourist traffic into Cambodia. This is currently hampered by existing airport infrastructure, which cannot host large aircraft and mass tourist arrivals despite previous investment to expand both runways and airport facilities.

Table 5.1. Sample of passenger flights into Cambodia (as of March 2020)

Destination	Sihanoukville	Phnom Penh	Siem Reap
Number of airlines	4	41	25
Airline country of origin	Cambodia; China	Cambodia; China; Indonesia; Japan; Lao PDR; Malaysia; Singapore; Qatar; South Korea; Thailand; UAE; Viet Nam	Cambodia, China, Lao PDR; Malaysia; Singapore; South Korea; Thailand; Viet Nam

Source: Cambodia Airports (2020), “Airlines & destinations” (web page), https://pnh.cambodia-airports.aero/en/airlines-destinations/all-destinations.

The country’s new Siem Reap-Angkor International Airport is expected to open in 2023 and is poised to receive 10 million passengers per year (Center for Aviation, 2022). The biggest issue regarding such serious efforts to welcome tourists is the carrying capacity of the country’s attractions, particularly the Angkor Temple complexes.

Crowd control and heritage site management

A lack of crowd-control measures remains a threat to UNESCO’s World Heritage Sites and is a major issue in Siem Reap. To increase ticket sales during the pandemic, the Cambodian government lengthened the validity of one-day Angkor Wat tickets by an additional day and five-day tickets by two days. The policy was initially scheduled to be in effect until the end of 2021, but in December 2021 it was extended through the end of 2022 (Nika, 2021). Crowd management strategies are needed to protect the temples’ sanctity and structural maintenance. Limits on visitor numbers, either via ticket sales or by using modern applications to inform prospective visitors on the carrying capacity and crowd sizes of each site, could be implemented so that visitors can calibrate their schedule to avoid overcrowding.

Cambodia’s Siem Reap Tourism Master Plan 2021-2035 is expected to create 940 000 employment opportunities to accommodate about 18.4 million tourists and generate about USD 6 billion in national revenue (OpenDevelopment Cambodia, 2021). However, the question remains as to how the heritage-rich city can protect its most important national resource from degradation.

One way to dilute the flow of tourists to the Angkor temples is to develop ecotourism. The Siem Reap Tourism Master Plan 2021-2035 has identified ecotourism regions and activities that incorporate the country’s village life and biodiversity (OpenDevelopment Cambodia, 2021). These potential resources would need further attention and investment. Along with success of developments in Phnom Penh and the Kep Islands, ticketing controls at the Angkor temples and enhanced community-based tourism in the Kulen and Cardamom Mountain regions, distribution of tourists may help Cambodia to thwart overcrowding at its precious Angkor temple complexes.

Agricultural produce and urban entrepreneurship

The Master Plan for Crop Production in Cambodia 2030 calls for the development of rigorous standards to ensure food and nutrition safety and sustainability (Goletti and Sovith, 2016). Agriculture, which contributes around 22% to GDP, is an important sector in the economy. The plan also calls for management of water and land resources and the creation of value-chain programmes.

In Siem Reap and Phnom Penh, there are a fair number of young adults from farming communities. Among them, many have local university qualifications and tend to be quite entrepreneurial. In many instances, these entrepreneurs are working by trial and error on their farm products in conjunction with hotels, which set specific standards in terms of hygienic production of local delicacies and the quality of vegetable and fish produce. Both the Cambodian tourism authority and educational institutions have important roles to play in terms of providing the right skill sets and training, as well as co-ordination with the tourism and hospitality sector and agricultural industries. It is essential that Cambodia’s local farm entrepreneurs be enabled with marketing skills, as well as the more significant aspect of creating the right agricultural product mix, to meet the standards of the tourism industry.

References

Cambodia Airports (2020), “Airlines & destinations” (web page), https://pnh.cambodia-airports.aero/en/airlines-destinations/all-destinations.

Center for Aviation (2022), New Siem Reap - Angkor International Airport, https://centreforaviation.com/data/profiles/newairports/new-siem-reap-angkor-international-airport (accessed on 16 April 2023).

Goletti, F. and S. Sovith (2016), Development of Master Plan for Crop Production in Cambodia by 2030. Final Report, prepared for Ministry of Agriculture Forestry and Fisheries (MAFF), Tonle Sap Poverty Reduction and Smallholder Development Project (TSSD).

IMF (2022), “World Economic Outlook Database” (accessed October 2022).

Ministry of Tourism (2022), Tourism Statistics Report. Annual Report, National Institute of Tourism, Cambodia, https://www.tourismcambodia.com/img/resources/cambodia_tourism_statistics_2022.pdf.

Nika, C. (2021), “Adjusted Angkor Passes Extended For A Year To Attract More Tourists”, 29 December 2021, https://www.information.gov.kh/articles/64019.

OpenDevelopment Cambodia (2021), Tourism Development Master Plan Siem Reap 2021-2035, Royal Government of Cambodia, https://data.opendevelopmentcambodia.net/dataset/45a65d2c-cfef-43ff-a326-6780390f3aad/resource/a5b6d7a0-afed-4148-9f06-333ef0c0b94e/download/tourism_dev_master_plan_sr__30.03.2021.pdf.

UNWTO (2022), “Global and regional tourism performance” (database), UN World Tourism Organization, https://www.unwto.org/tourism-data/global-and-regional-tourism-performance (accessed on 26 November, 2022).

WTTC (2022), “Cambodia 2022 Annual Research: key highlights”, https://wttc.org/DesktopModules/MVC/FactSheets/pdf/704/83_20220613154919_Cambodia2022_.pdf.