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Travel and tourism companies on the rise in Cambodia

THE number of Cambodian travel and tourism companies increased over the previous 12 months despite pressure on the industry from the global financial crisis, Ministry of Tourism statistics revealed Wednesday

“We saw more new entrants than closed firms even though the global financial crisis hampered the growth of the tourism sector last year,” the MoT Tourism Industry Department director said.

The Ministry’s statistics showed some 47 new companies received licenses to operate while 32 tourism businesses closed over the year previous to May 13.

“It’s normal in business to see some close and some open, especially with free market competition,” director Prak Chan Dara said Wednesday.

He added a total of 374 travel and tourism companies were registered with the Ministry.

Cambodia Association of Travel Agents (CATA) president Ang Kim Eang claimed he was unaware of the exact number of shuttered tourism firms, but said competition among operators was especially tough in times of crisis.

“Some companies lowered service fees to below market prices, which affected everyone,” he said. “To prevent this issue, CATA is considering setting an internal regulation among its 196 members: the same service fees charged from customers for all tour and travel companies, to avoid price dumping.”

A representative of Sovath Travel and Tour in Siem Reap province, which went bankrupt two months ago, said that the closure was due in part to the impact of the global crisis, but also turmoil in Thailand.

“During the last two years, we suffered from the trouble in Thailand because most of our customers entered Cambodia through Thailand. Due to the Thai political turmoil and the ongoing border dispute between the two countries, we lost 80 percent of our customers,” former Sovath chairman Im Sovath said Thursday.

“I lost more than US $1,000 each month for staff and operational expenses for two years, until finally I decided to shut it down,” he added.

Not all closed companies claimed to have been affected by the financial crisis and Thai unrest. The Phnom Penh-based Phoenix Voyages Group shuttered its business last month due to an internal dispute, former majority owner Long Sophea told the Post.

“My decision to close the company was not related to the crisis at all. The company was a joint venture with a French partner. The company grew well, but my partner wanted to swallow the whole company, causing internal conflict and leading to the closure,” she said Thursday, adding it resulted in ten unemployed staff.

However, new entrants said the Kingdom’s untapped potential meant tourism had room to grow.

“This country is full of attractive heritage and ecological sites with potential for the tourism industry, so I took a good chance to start up this business,” Elephant Walk Tour owner Shui Mui said. The Phnom-Penh based firm received an operating license from the tourism ministry last month.

“Now is the right time for this business as the economic situation is recovering and the sector begins growing again,” she added.

Tourism statistics showed that the number of international tourists to Cambodia rose 9.87 percent to 683,692 tourists in the first quarter of this year, from 622,288 during the same period of 2009.

Visitors from South Korea were up 31.5 percent, Chinese arrivals were up 27.2 percent, and Japanese visitors rose by 4.7 percent for the quarter year on year, the statistics showed.

Contributed by: Nguon Sovan 
City: Phnom Penh 
Country: Cambodia 
Date: May 16, 2010

Credits: The Phnom Penh Post
May 14, 2010