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Hotel Market, Cambodia in January 2013


Siem Reap

The market outlook for the hotel industry in Siem Reap is positive with strong growth 1recorded in 2012 and already during 2012 – 2013 ‘peak’ (2012 – 2013) season, with some hotels recording their highest occupancy rates since 2007.

With tourism figures reaching record highs already in 2013, international hotels and operators are experiencing as much as a 20% growth in occupancy rates based on the same period of the 2011 – 2012 peak season.

With a growth in the number of visitors to Siem Reap, rack rates have remained firm and due to the lack of additional supply, this is likely to remain, with the potential for rack rates to increase in the near future.

The opening of the new Park Hyatt will add an additional supply of 109 keys to the hotel sector which will bring a new international operator to the market strengthening the international hotel operator offering in Siem Reap.

A key factor for the hotel industry in Siem Reap is global marketing and accessibility. The vast majority of tourists staying in Siem Reap are either part of a package holiday or have booked through travel and tour operators, with this characteristic being markedly true for the Asian Market.  As such, international hotel operators with increased exposure and presence with travel and tour operators have been able to directly convert the increased number of tourists into higher occupancy rates.  Local/foreign owned 4* – 5* hotels, with no international operator, have suffered from a lack of international exposure and have struggled to directly translate increased tourist numbers into higher occupancy rates.

Phnom Penh

The Phnom Penh luxury hotel market has significantly benefited from the presence of the ASEAN summits, one in April and one in November. These both brought in over a 1,000 delegates and international press arriving into Phnom Penh.

The average occupancy for luxury hotels in Phnom Penh stood at 60% at the end of 2012. In 2011 the average occupancy in all levels of hotels in Cambodia stood at 66.15%. It would be expected that higher priced luxury hotels would experience a lower occupancy. The 6.15% difference does not reflect the norm and indicates the positive year achieved by the luxury hotels in Phnom Penh.

The room rates have generally increased in the market, especially for suites and the more exclusive properties. This again can be attributed to ASEAN activities and the corresponding business activity. The current REVPAR (Revenue per Available Room) in the four and five star hotel market in Phnom Penh ranges from US$25 up to US$100.

Supply is set to increase in the next few years with the completion of the Sohka Hotel and Naga 2. During 2012 supply only increased with Naga World completing an additional 220 keys. Sohka is set to launch 500 rooms onto the market and Naga 2 is set to launch over 1000 increasing current luxury hotel supply by 70%.

With supply increasing and the market becoming more competitive it is expected that a number of established luxury hotels will undertake major refurbishment works in the near future.

Tourism Statistics

Tourism accounted for 9.7% of Cambodia’s GDP in 2012 a rise of 5.5% from 2011. Investment in the sector has increased by 16.7% Y-o-Y. Total foreign arrivals increased by 24.8%  Y-o-Y with business arrivals seeing the greatest increase at 47%.

Tourists from the U.S. and France—both of which have strong historical ties with Cambodia —accounted for approximately 8 percent of total visitors in 2012. Europe as a whole saw an increase of arrivals by 11.4%. Asia and the Pacific accounted for the majority of arrivals at 76.25%.

Compared to the figures from 2011, the numbers of arrivals by air despite increasing have seen a reduction in its percentage share of total arrivals. In 2011 50.9% of arrivals came by air while in the same period in 2012 47.4% arrived by air, this can be put down to the increase in visitors from neighbouring countries, predominantly Lao and Thailand.

As in previous years Siem Reap International Airport has the highest share of arrivals with 27.6%, while 19.8% of arrivals came through Phnom Penh.  According to the Cambodian Government approximately US$80 million will be invested to expand the international terminal in Phnom Penh and US$100 million will be used to upgrade Siem Reap International Airport.

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