News | City / Municipality / Region - Southeast Asia - China - The New Silk Roads Chinese Mass Tourism in Cambodia

After a period of rapid growth, COVID-19 and complacency have shocked the industry

Information

Chinese tourists pose for a group photo at Angkor Archaeological Park, Cambodia. CC BY-NC 2.0, Photo: Judith Blue Pool

Although the connections between Cambodia and China are deeply rooted, Cambodia’s focus on Chinese travellers is relatively recent, kicking up in the last six years. The emergent trend of Chinese mass tourism in Cambodia is not only due to the country catching up economically after the devastating Khmer Rouge regime and civil war that followed, but also China’s rising consumer class and their newfound wanderlust spirit. The global trend of “mass tourism” can be observed here, as Chinese tourists frequently choose to travel in planned group tours rather than independent tourism with self-planned schedules and accommodation.

Danielle Keeton-Olsen is a freelance journalist based in Phnom Penh, interested in business, human rights, health care, and the overall development of Cambodia.

As Cambodia aimed to lure in more group tours, the country adapted its tourism offerings for both better and worse. COVID-19 dealt some of the biggest shocks to the tourism industry, but there were already signs that Cambodian tourism—even the booming Chinese mass tourism—was tapering off by mid-2019.

Although the pandemic has not shaken Cambodia’s strong economic and political relationship with China, it will inevitably shape the future of mass tourism, with one industry expert saying that the government and industry can take steps to attract even more tour groups and further expand the industry once the travel restrictions allow for it.

The “China-Ready” Policy

As masses of Chinese explorers started booking tickets to Cambodia in 2015, the country set a goal of attracting 2 million Chinese tourists annually by 2020—more than doubling the 700,000-tourist goal it set for that year. The country’s so-called “China-Ready” Policy was unveiled the next year, with a goal of adapting sites, training tourism sector staff, and forging diplomatic and business relationships in order to make the most of Chinese tourists’ eagerness to travel to Cambodia.

According to the Tourism Ministry’s whitepaper on Chinese tourists, leisure was the biggest reason bringing Chinese tourists to Cambodia, with 88 percent arriving for vacations, although in 2018 World Bank claimed that 42 percent of Chinese tourists arrived for investment purposes. While the paper noted that there were already a number of tour operators, hotels, and restaurants that catered to mainland Chinese travellers, more could be done to welcome the population.

Cambodia surpassed its goal of 2 million Chinese tourists by 2018 and subsequently set higher targets. In a new memorandum of understanding with Beijing, Cambodia aimed to attract 3 million Chinese tourists by 2020, 5 million by 2025, and 8 million by 2030. At a global tourism forum in 2018, Cambodian Prime Minister Hun Sen defined Cambodia’s tourism sector as predominantly culture-focused. Nevertheless, the industry has also expanded beyond cultural aspects into other industries, from investor travel to casino tourism.

The goals set in 2019 were inevitably wiped out by the global outbreak of COVID-19, but discussion within the tourism sector in later 2020 suggests that the country will once again look to mainland China for the largest cut of its vacationers.

Cultural Tourism

Stakeholders say Chinese tourists are drawn both by Cambodia’s good bilateral relations as well as the direct flights, with Chinese operators flying roughly 30 percent of direct flights to and from Cambodia in 2018. Studies of Chinese outbound tourists show that group travellers are most likely visiting the country for the first time, if not leaving China for the first time, and therefore more keen to see the popular tourist sites.

Angkor Archaeological Park is Cambodia’s number one tourist destination, and one of the key attractions for Chinese mass tourists as an architectural feat, a relic of great ancient civilizations, a sacred space, and just a beautiful place to snap a selfie at sunrise. As such, it is swarmed by tourists especially during its peak seasons. A large part of those visitors come as members of Chinese group tours.

Nearly 40 percent of Angkor Park’s foreign visitors in 2019 were Chinese nationals, according to Angkor Enterprise, the state-owned ticket collector. Some Cambodians still use Angkor Park as a place of Buddhist worship, which could be dampened by the presence of large, loud groups of tourists. When the pandemic hit and immediately shocked international tourism, scores of Cambodian families and youths rented bikes and motorbikes to pass through the park, while expatriates paid for tickets to see the temple complex while it was remarkably deserted.

There are concerns about the ancient temple complex’s ability to bear the weight of mass tourism, as well as the amount of water that tourism sites and hotels demand. The industry has noted that Cambodia, and Siem Reap in particular, needs new tourism offerings to appeal to both first-time and returning visitors.

In recent years there have been a number of massive-scale tourism developments approved throughout Cambodia to capitalize on increased Chinese tourism. Sensing Sihanoukville’s increased potential as an economic and tourism hub, state-owned China Road and Bridge Corporation is building a 2-billion-dollar expressway between Phnom Penh and Sihanoukville, scheduled to open in 2023.

Last year the Cambodian government granted Nagaworld—the Phnom Penh casino operator that earned 1.72 billion US dollars in gross gaming revenue in 2019 and attracts a large number of Chinese tourists annually—a 50-year lease on prime land in Angkor Archaeological Park, about 500 meters from the Angkor Wat temple. The Culture Ministry quashed the company’s plans for a park “like DisneyWorld”, citing the temple’s religious purposes, but parent company Naga Corp still holds the 75 hectares and the right to develop something less disruptive. Other large-scale projects include Yuetai Group’s row of riverside skyscrapers forming a business and tourism complex in Phnom Penh, tourism resorts tucked into Preah Sihanouk province’s Ream National Park and its nearby coast, and the Dara Sakor resort in Koh Koh province, infamous as a target of US government sanctions.

These developments have not fully opened, so their impact on the economy remains unknown. At least in the development stages, local residents say they’ve been forced out of their homes, sometimes violently, even if they live in environmentally protected areas. In Koh Kong province, the Union Development Group’s plans for the Dara Sakor tourism resort and an expansive airport displaced more than 1,100 families who lived off coastal fishing, and cut off access to the coast for many. When residents tried to retain claims to the land they had owned for decades, they were met by guards armed with axes and hammers.

Large tracts of Ream National Park, for instance, have been granted to foreign companies promising to build tourism parks. While residents were finally granted plots of land in 2020, they said they had been cut off from their farmland, and community members say that protests against the strict monitoring of communities ended with jailtime for young protesters.

Reporters and government officials have also found evidence that Chinese companies like Yuetai and Yeejia are reselling pieces of their concessional land to smaller Chinese-speaking developers, in violation of the terms of their concession.

Casino and Investor Tourism

Taking advantage of mainland China’s growing middle class and ban on gambling, Cambodia’s casino offerings rose dramatically in line with growing numbers of Chinese tourists. Cambodian law bans its citizens from gambling, meaning the industry is inherently tourism-driven—and Chinese travellers are among its biggest target audience.

Nowhere was the casino trend more visible than in Sihanoukville, where the port town and seaside vacation spot transformed into a bustling metropolis to attract leisure and business tourists within about three years. Both leisure tourists and business travellers stopped in the coastal city to enjoy its beaches and gaming tables, with entrepreneurs touring groups to consider building something new in the country.

While some of these new investments stimulated Cambodian enterprises and boosted land values for property owners, many of the new businesses were run by expatriate Chinese business owners who almost exclusively spoke Chinese, thus allowing little space for Cambodian entrepreneurs to survive without Chinese language skills.

Many of the Cambodians who work within the metropolis are employed at construction sites or casinos, or work independently as drivers and street vendors. As casino and construction activity peaked in 2018 and 2019, those who had previously invested in tourism businesses catering to beach-going backpackers found themselves struggling financially, if not kicked off their seaside properties. Others traded their jobs in the tourism industry for casino or construction jobs, working long shifts in dangerous conditions.

Local tourists, meanwhile, said they were shocked by the new signboards bearing Chinese advertisements and incorrect Khmer translations, while noting the number of Chinese nationals in the city and complaining of dirtier streets and roads. Although the skyline rose quickly, infrastructure could not keep up, and the city’s roads became trash-strewn rivers during the monsoon season.

Online gambling, catering to gamblers outside the country and particularly in mainland China, was a significant part of Cambodia’s casino industry and Sihanoukville’s rapid development. However, that industry, and most of the other businesses in Sihanoukville, were shaken by a ban on online gambling. Citing the risks to security and social order, the Cambodian government announced the ban in August 2019, to be enforced at the start of 2020. The announcement caused a number of businesses to close pre-emptively, but the effects culminated in early 2020 when the government began enforcing the ban, while the COVID-19 pandemic simultaneously spread from China to the rest of the world.

By some estimates, more than 400,000 Chinese expatriates left Preah Sihanouk province alone by the time the online gambling ban was enforced in January 2020. Both Chinese and Cambodian entrepreneurs and workers found themselves without a job, and in some cases, stuck in the emptying city.

Employed or independent, Cambodian workers said they suffered further during the online gambling ban and pandemic in early 2020, when tourism to the city and expatriate business dropped considerably. Although some casinos resumed business late last year, street vendors and drivers say they can only occupy limited areas, as police block vendors from selling at beaches and private hotels, or businesses prevent drivers from waiting at certain locations.

The industry has also brought bigger dangers: reports of fraudulent gambling rings, violent attacks, kidnappings, and murders circulated through local media ahead of the ban. Notorious crime leader Wan Kuok-koi of Macau’s feared 14K Triad started a cryptocurrency company in Cambodia in 2018, alongside a cultural association seemingly designed to legitimize the business. The 2019 online gambling ban helped law enforcement catch up to the metastasizing crime in Sihanoukville, but gang-related crime is still reported regularly and online casinos are still found operating illegally following the ban. The Chinese Embassy in Cambodia warned mainland Chinese passport-holders not to gamble in Cambodian casinos in January 2021 after a number of gambling-related deaths circulated in local media, yet it remains unclear how this could be enforced given the low number of travellers at that time.

Casinos and the tourism they drive bring revenue to the country, with one Ministry of Economy and Finance representative estimating that the industry contributed 56 million dollars in tax revenue in 2018. The new income was also accompanied by some negative sentiment towards Chinese nationals for their association with the crime and bad behaviour of the casino industry. However, one analyst, Ou Virak, noted in 2018 that Sihanoukville had a culture of heavy drinking and drug use, crime, and prostitution even when the travellers were primarily Western: “It’s the unknown”, he said. “A drunken Chinese is scarier than a drunken Westerner, who you see every single night.”

Success and Strain: A Travel Agent’s Perspective

Given the economic and diplomatic gains that Chinese mass tourism allows, a tourism industry expert suggests embracing the trend while doing more to regulate industry players and prevent negative impacts. The sheer volume of new visitors into Cambodia had immediate impacts on the economy, says Chhay Sivlin, president of the Cambodia Association of Travel Agents. The tourism industry generated nearly 5 billion US dollars in 2019, which would allow Siem Reap—a province otherwise dependent on farming and light manufacturing—to embark on a major infrastructure project started in late 2020. Group tour growth also boosted long-term improvements in industry, creating new jobs as well as expanding Cambodia’s marketing further into China to attract more visitors.

However, there were a number of adverse impacts to the tourism industry as well, Sivlin adds. The sudden increase in tourists created disruptions to tourism sites’ atmosphere, particularly at the cultural and historical masterpiece of Angkor Park. Sivlin noted that tour guides often have to speak loudly to large groups, sometimes with a megaphone, and that the crowds are considered unpleasant to many small-group visitors, particularly Western tourists.

The mass tour participants themselves do not get sufficient information about the temples and cannot explore at their own pace in this format, which also diminishes their own experience. Sivlin noted that Cambodia lacked sufficient Chinese-speaking tour guides to cater to this tourist population. For those who were able to cater to them, they found themselves strained by the amount of people coming in, and the quality of hospitality and service declined as a result.

Mass tourism groups also brought a more sinister trend: zero-dollar tourism, where group tour participants pay a Chinese company for a package tour upfront that covers everything they need, therefore spending little money in the country. The only money they spend is at overpriced souvenir shops that collude with the tour company, with tour guides pressuring tourists to buy at their chosen shops.

While the government has said it would ban zero-dollar tour operators, little information has been made available as to how many firms were inspected and closed, what those suspensions entail, nor the financial consequences of zero-dollar tourism, leading to questions about how these regulations will be enforced in the future. According to World Bank estimates, Cambodia’s receipts from international tourism as a percent of its total export products decreased slightly, from 26.2 percent in 2018 to 25.2 percent in 2019.

Preparing for More Visitors

Sivlin notes that Cambodia’s tourism industry dipped even before the COVID-19 pandemic sank the global tourism industry—observations backed by declining Angkor Park ticket sales and World Bank analyses. She attributes the decline in visitors to a few factors, including major developments in tourism sites and crowding at Angkor Park: “Word of mouth spreads further about our crowded temple sites, resulting in discouragement from traveling to Siem Reap.”

The word of zero-dollar tourism in Cambodia spread as well, resulting in fewer people booking group tours towards the end of 2019. While some tourists may not have been willing to travel during the US-China trade war, Sivlin also believed Cambodia could use some additional attractions beyond Angkor Park in order to draw visitors to return for second or third visits.

Sivlin nevertheless sees a number of government-sponsored measures that could improve Cambodia’s tourism appeal—both for tour groups as well as individual travellers. Government agencies could start by supporting and incentivizing more tourism employees to learn Chinese language and tourism customs through training programmes, boosting the number of tour operators and guides who can facilitate these tours and easing strain on the current industry. A number of regulations could also control the unorganized aspects of group tours—for example, airports could create a better space to receive and process tour groups, while state-employed Angkor Park staff could establish occupancy limits to reduce crowding and point small tour groups to other areas if they seem bothered by the size of the crowd. Health and safety, particularly on boat tours, can also be improved and regulated, she suggests.

The government could further incentivize travel for tour groups by controlling costs at souvenir stores to prevent overpricing, while lowering Angkor Park ticket costs for groups. However, incentivizing higher numbers of travellers to come to the park could also overburden the ancient temples, as discussed above.

COVID-19 and After

Mass tourism operators who were reliant on Chinese travellers were inevitably hit hard by the global pandemic and the nearly universal shutdown of leisure tourism. However, Sivlin notes that Cambodia’s tourism industry on the whole has been wounded by the virus.

News reports starting in January said the grounds of Angkor Archaeological Park were already emptying after the Chinese government stopped all group tours. According to Angkor Enterprise data, the company that sells foreigners’ tickets to Angkor Park, foreign ticket sales started declining in January 2020, falling 17.8 percent below January 2019 sales and tapering steadily for the rest of the year. By the end of 2020, Angkor Enterprise sold over 400,000 tickets, an 81.8 percent decline from 2019. Chinese arrivals further fell by 83 percent in the first eight months of the year. Cambodia notably allowed foreign flights throughout most of 2020, but arriving foreign nationals had to pay a 2,000-dollar deposit to cover a two-week quarantine in a hotel upon arrival, which is inevitably prohibitive for leisure travel.

By July, 18 hotels and 96 guesthouses had closed permanently due to the pandemic, and several hundred more suspended work, affecting around 8,000 employees. Similarly, casino workers in Sihanoukville were able to resume business mid-year, but they said their once-lucrative work was now difficult to sustain—they had their hours cut, worked split shifts, and sometimes had salaries reduced as gamblers fled during the online casino ban and pandemic. Tourism workers whose jobs had been suspended could receive 40 dollars per month in government support, while hotels, restaurants, and travel agents could receive tax exemptions—both subsidies were extended until at least the end of June.

Inside Cambodia, domestic tourism returned, amplifying ecotourism and offering a small lifeline to the struggling Siem Reap. Towards the end of the year, Cambodian tourism associations were discussing the potential to create a travel bubble between Cambodia and China, which had recovered strongly since early 2020. However, two Chinese nationals escaped their mandated quarantine-on-arrival while carrying the virus and unwittingly cased a massive outbreak throughout the country, with Cambodia’s total cases increasing from fewer than 500 in mid-February 2021 to more than 10,000 by the end of April. With the city under lockdown, it is impossible to predict when a travel bubble could be feasible.

Although recovery is hard to imagine at this point, Sivlin predicts group tourism will return, despite the obvious concerns about crowding following the widespread airborne pandemic. Most of the early travellers will be smaller groups of individuals or families, Sivlin suggests, and many will have a familiarity or pull to Cambodia in the first place, be it visiting family or travel for business.

It may be some time before mass group tours return to the country, she notes: “Group tourism will still flow into Cambodia; however, the movement will begin at a slow pace before growing to be as big as before, and this can happen only if Cambodia properly controls the situation.”