THE limited representation of international hotel brands in Phnom Penh and Siem Reap provides a significant opportunity for hotel operators looking to expand in South-east Asia, according to JLL’s Cambodia Hotel Market Update for July 2014.
The hotel supply pipeline for Cambodia includes four hotels with 1,705 rooms to come online by end-2015. Most properties to debut in future are located within the upscale and luxury segments, leaving ample room in the branded economy to midscale segment.
Cambodian capital Phnom Penh is witnessing strong year-on-year growth in terms of arrivals, boasting 16.7 per cent growth in 2013 or 0.8 million visitors. Year-to-date statistics for April 2014 have shown a 10.9 per cent increase over the same period in 2013.
However, the city only has three international brands delivering 745 rooms, while the midscale/economy segment is populated by unbranded boutique and independent hotels that offer between 20 and 40 rooms on average.
Growth in ADR for the luxury segment slowed by four per cent to US$138 in 2013 due to political tensions, as did hotel occupancies that tumbled 35 per cent last year. Similarly, RevPAR fell 15 per cent in 2013.
However, JLL anticipates that occupancy will bounce back in 2014 as demand for accommodation grows with a modest increase in ADR soon because of a strong supply pipeline.
More visitors from China, planned infrastructure improvement initiatives and promotion of the Phnom Penh-Siem Reap circuit will also boost demand for hotels in Phnom Penh in future.
Meanwhile, Siem Reap is the country’s top international tourist destination. It welcomed 1.2 million visitors in 2014, a 17.5 per cent increase over 2012 while year-to-date figures for April 2014 have posted growth of 15.4 per cent over the same period in 2013.
The city has 188 hotels, 205 guesthouses and 19 resorts but only a handful of international brands, namely Sofitel, Le Méridien, Raffles, Anantara, La Residence (Orient Express), Park Hyatt, Amansara and Best Western.
Occupancies have hovered around 60 per cent from 2011 to 2014, while the luxury segment has seen a seven per cent increase to US$150 in ADR during the same period. JLL predicts growth in overall hotel performance due to the increase in the number of tourist arrivals outpacing additions to hotel inventory.
Cambodia’s top three source markets last year were Vietnam, China and South Korea.
