Trade questions fate of luxury hotels coming into Phnom Penh

As Cambodia welcomes a swathe of luxury hotel brands to Phnom Penh, the trade is divided on whether the properties will help contribute to the economy or be forced to shutter due to low demand.

Hotels set to come online this year include the 175-room five-star Rosewood Phnom Penh in June, and the 1,000-key Naga2. Meanwhile, Hyatt Regency, Shangri-La and Okura Prestige are slated to enter the market by 2020.

Rosewood Phnom Penh
Rosewood Phnom Penh

However, with occupancy rates in many of the capital’s current limited luxury hotel offerings below 50 per cent on average, trade players fear that many of these properties might have to shutter due to a fiercely competitive landscape.

San Sambath, who owns three boutique hotels in Phnom Penh, has seen an 18 per cent decrease in occupancy in the last three years, and predicts this will worsen as new hotels are unable to fill its rooms and are forced to drop prices.

He lamented: “There are already too many empty rooms in Phnom Penh and times are really tough. I don’t think Cambodia is quite ready yet for all these luxury rooms. There just isn’t the demand.”

However, owner of a series of hotels and restaurants, Luu Meng, said the country should welcome more high-class offerings, as they help to raise the hospitality industry’s standards and attract “high-class tourists” who spend more money.

As well, tour operators are also hoping to benefit from the entry of upscale brands. Vangdong Tam, owner of Trails of the Mekong, said: “They will help promote Cambodia in a good light across the world and bring more high-end travellers with them.”

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