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Sunday, October 12, 2014

Something Good and Something Bad to Report (In a Small Way)

The bad news first; last year all of Cambodia and especially Sihanoukville had been plagued by incessant power outages ruining the country’s reputation as a viable tourist and business destination. Nevertheless, guests seemed to be unperturbed by this or didn’t read about it because they come in ever increasing numbers.
Now since August 2013 the power supply situation has changed for the better. I guess it was January 2014 when the last of the power plants went online to supply enough power for the foreseeable future. But if you think that the power woes, especially for the business community, are over, you are in for a disappointment. Particularly the past month has been marred by frequent and longer outages. Stupid truck drivers ran into power poles twice, cutting power for 4 or 5 hours each time. Circuit breakers seem to be of especially bad quality (made in China?) because according to the EDC’s hotline they disconnected and malfunctioned often. And then the prudent managers at EDC decided to do their maintenance work for the transfer stations all at once. The city was left without power for an entire Sunday. In addition, while they were at it, they replaced older power poles. This lasted well into darkness.

Just the other day, we had two more power cuts of undetermined causes on the same day again. Thankfully, they were only for 15 to 20 minutes each.

It appears that the people running the Sihanoukville branch aren’t quite up to the task. They may not have heard of preventive maintenance. Like all things in Cambodia they wait until it breaks down and then replace it. Anybody driving into Sihanoukville on National Road no. 4 can’t help but see the state of the power grid. At the turn-off into Sihanoukville the cables look like all jumbled up, and they have been left in this state for as long as I can remember. Perhaps,, this is symptomatic of EDC’s management approach to their business?


Now the good news. Normally, the road beds are washed partially away in the rainy season leading to potholes. Since most things are hauled by overladen trucks, these potholes become quite large towards the end of the rainy season. But this year, lo and behold, the local government seems to have understood that repairing those small potholes will prevent them from being made into virtual car traps by those trucks. Periodically, repair crews drive along roads filling up the potholes with dirt and small rocks and then pouring asphalt on top with a finish of gravel. It does the job and driving is no longer an off-road exercise. Of course, I am describing the road I use most of the time – I believe it is called 71 – from Sihanoukville to Stung Hao to Veal Renh where it connects with National Road no. 4.

Saturday, September 27, 2014

Sihanoukville – A Changed Town?

A couple of years ago I posted an article entitled “Will Sihanoukville Ever Become A Real Tourist Destination?” Now two years or so later I think it’s time to take another look, not the least because I have joined the hotel community myself. My hotel has been open a year now – so one gains plenty of hands-on experience this way. In one of my previous careers I looked at hotels from the tour operator’s view, now I look at it or them from behind the reception counter or my office.

First, Sihanoukville has recorded a tremendous increase of tourist arrivals. Online booking agencies (booking.com, agoda.com) report a 300% increase of bookings over last year. This does not take into account the arrivals from Vietnam who mostly come in tour buses, or from China who are mostly booked through travel agencies directly into the hotel. Vietnamese ranked number one, Chinese number two, Russians number three. Koreans are the third largest group for Cambodia but rank among the also ran for Sihanoukville. Altogether there were about 764,000 arrivals in the first 6 months of 2014, or a 27% increase over last year. These numbers surely are impressive.

Recently there was one charter flight from Korea to test the waters so to speak. That tour operator announced regular weekly flights next high season, but we will have to wait and see. Many times announcements are just that; Cambodia has seen and heard many of those without them ever materializing.

The fact remains, though, that Sihanoukville still lacks the infrastructure for becoming a major world-class tourist destination. A major tourist destination is defined by the number of hotel beds that at least thrice weekly flights for any given airline would be able to fill. Since there would be several airlines from different countries you are looking at about 1800 seats or a requirement of about roughly 5,400 beds for those airlines alone; if you factor in an  80% occupancy of those flights the number of beds would still be around 4,500 beds.

Specifically, there are not enough hotel rooms in the 3 to 5 star category. The hotels that cater to a specific Asian clientele are not necessarily ones that are in line with the requirements of Western, Korean, or Japanese tour operators. As with everything else, China is a new economic factor and they travel in large numbers. Of course, a tourist is a tourist, no matter where they come from, but taking Thailand as an example the majority of their tourist business is from developed countries. So in order to attract larger numbers from those the mix of hotels needs to change.  There are about 175 hotels in Sihanoukville, most of them hidden away in places where no tourist would book a room, except for the occasional backpacker. These hotels count and exist (possibly subsist) on weekend traffic from Phnom Penh. For the most part they are cheap (in the $10 to$20 range). The owners own the land and the building outright so they can afford low rates. Their income expectations are rather modest too. Since they employ almost exclusively family members they can easily live on that – for the time being. Eventually, inflation will force them to raise their rates as well.

If you look at the major areas you will get a clear distinction of the type of tourist that stays there. Victory beach is nice but is just a bit too close to the port. A port always brings murky, if not dirty, waters so the beach there is not a prime location. There are a couple of hotels that are in the 3 star category and large enough to accommodate a certain number of guests.

There is an unfettered building boom in both regular housing as well as in condominiums and hotels. Some of the larger new hotels have an outright tasteless design, but those things are in the eye of the beholder. Nevertheless, they still won’t fill the void.

Occheuteal Beach with its purely Cambodian ambience is home to quite a few hotels and so is Serendipity Beach. A few of those would meet international standards, but not nearly enough for those airplane loads of tourists. Most of the hotels are mom-and –pop operations and clearly aimed at the individual traveler, as does my hotel with 16 rooms.

Sokha Beach has one large 5-star international hotel, and Independence Beach also has one large 5-star property. Currently, they are the only ones able to accommodate larger numbers.

Then you have Otres Beach, which is divided into two parts – the near end and the far end. The near end is backpackers haven and as such would not count in the greater plan. The far end currently has two nice somewhat upscale hotels but they also only have 10 or 20 rooms respectively. A handful of wooden bungalows with a sort of basic flavor cater to individual tourists who like this.

Although Sihanoukville Bay is one of the world’s most beautiful bays the beaches are in need of some major overhaul for this new market. They are nice and even beautiful, well-accepted by individual travelers but a tour operator would think twice. This is why no major hotel chain has ventured into this market.

The majority of guests and hotel owners want it to stay this way - a destination for people who do not like to use organized travel.  The other main sectors are restaurants and entertainment. Except for a handful of restaurants that serve great food, especially Asian seafood, most are Cambodian eateries along the beach and consequently frequented by natives. Sometimes a look at the kitchens of those places make you doubt the quality of the food. Western places there aren’t that different either. Everybody can get their meal but to round off the attractiveness of a destination one needs a few more somewhat upscale restaurants.

For entertainment there is hardly anything for the mainstream Western tourist. Asians will like the many Karaoke places, and the casinos, if it were. But recent news reports state that this business sector is losing money. I have never understood why companies thought that gamblers from neighboring countries would come in such numbers to make this a profitable business. Anyway, I don’t see Western tourists coming for casinos. There are definitely more exciting casinos elsewhere in the world, just think ‘Las Vegas’. There are a few restaurants/bars with DJ’s on Serendipity Beach (the first stretch on the Western end of Occheuteal Beach). The music is loud, the crowd is mixed, with a lot of Cambodian girls looking for men they can lure into a tryst. This is more for the young people or the single male. Victory hill is home to many bars with taxi girls. This is the seamy side of Sihanoukville, and this together with a place close to port called chicken farm is where the whole city got its seedy reputation. This is slowly being pushed into the background as the clientele overall has changed drastically over the past few years. One sign of that is that even during the rainy season mainstream tourists come here. Before it was mostly single men who liked the cheap beer and cheap girls.

Recently, the American Embassy put out a travel advisory warning tourists not to visit Occheuteal Beach after dark, mainly Serendipity Beach, as there were reports of increased gang activities and violence against foreigners. That advisory is patently false. Yes, there was this one attack on an American who got stabbed in very unclear circumstances. But as far as violence goes, incidents are far and few between. Deaths of foreigners that occur here are mostly of elderly men having serious health problems already and succumbing to them. Tropical climates are not really for the frail elderly Western tourist. Of course, you get the occasional OD’ed tourist who shot up and did not know what he/she bought on the street from some shady character. This is a poor country and consequently you have quite a bit of petty crime, bag snatching from a motorcycle, or at night when walking on deserted streets. Burglaries is also one of the more prevalent crimes perpetrated here but these are mainly in residences, as Cambodian people still tend to keep their valuables and cash in the house. Hotels are spared as virtually all of them have security, alarm systems, CCTV, etc. I have not read or heard about one burglary in a hotel or guesthouse. As in any other developing country, if tourists observe a few simple precautions they won’t fall victim to a crime.


Altogether, Sihanoukville has become a destination in its own right as opposed to being an extension on an Indochina trip  – but for the individual traveler mostly, flashpackers and other mainstream tourists who have a normal budget but who still like the comparatively low prices. The atmosphere is very much laid-back and quiet, unlike most other, say Thai destinations. It is not yet a world-class destination by any stretch of the imagination, although officials like to fantasize it already is. They have a long way to go to reach that. Most of all, officials will have to act rather than just hold meetings and talk. They can do a lot to improve things by just cleaning up the trash in the city, regulate the beach vendors, enforce sanitation regulations, etc. Now that most of the power problems have become a thing of the past with the additional power plants in full operation and  the water supply constant, Sihanoukville has shed  some of its bad reputation and is definitely worth a visit. It has come a long way. Sun-hungry Europeans especially can spend their vacation here just like anywhere else. They can enjoy a variety of waterfront activities, eat the local food, particularly seafood, and relax in the sun with a drink in hand. In point of fact, for instance the average stay at my hotel is 10 days. So there is a tendency among some tourists to spend their entire vacation in Cambodia. After visiting Phnom Penh, Angkor Wat, a national park up north for the wildlife, or some other natural preserve, Sihanoukville is an ideal conclusion for a trip to Cambodia. This appears to be hanpening more and more and is a good sign for the tourist industry and in the end for the people of Sihanoukville and Cambodia in general.. 

Tuesday, September 23, 2014

CNRP Nepotism ?

About a week or so ago the King appointed 21 advisers to Khem Sokha, the new Vice President of the Cambodian Assembly. If it were the governing CPP this would not have been a surprise because they hand out these positions as a reward to the party faithful who toe the line. Khem Sokha,however, is the vice president of the CNRP.

I faintly remember that the CNRP wanted to reform the system. But I must have misread. Why would he need all these advisers? It is not that they make a whole lot of money but the image and status that goes with such a position will be turned into monetary advantages in many respects. Some of them will get the rank of state secretary and some that of a minister. Not too shabby. This is also why there are so many of them;  they just bought that position. I know someone who is a nightclub owner and also an adviser to Heng Samrin for legal matters. This gentleman is not an attorney; he does not have a law degree whatsoever. This whole thing is one more example how corrupt everybody in politics in Cambodia is – the CNRP is no exception. It is outright outrageous and flies in the face of their voters. The believed they voted for people of integrity.


On another note, speaking of the Assembly. Heng Samrin, the president of the Assembly, issued a rule for the Assembly under which the committees cannot invite people or civil society organizations to testify before them. Their attendance must be approved by Heng Samrin first. This again is an aberration of the democratic process – or in other words, politics Cambodian style. But then, Communist-style dictates are hard to erase from their heads.

Friday, September 12, 2014

Hotel Business Opportunity

Looking back at almost a year of starting this hotel, from conception, design, which I did myself, drawing site and floor plans to negotiating with contractors and after completion marketing it, I sort of feel exhausted now.
The hotel has been received very well by guests. There will always be a few that aren’t satisfied with the best of things, but overall I feel, and the vast majority of the guest reviews prove it, that we have done a good job with it. It is also somewhat difficult to maintain a standard you have established, not the least because of the vagaries of the Cambodian mentality. Employees might quit on you at a moment’s notice. Contractors might or might not show up, etc. I had written about that in a previous post.

I have come to the decision now that I need to take a bit of a rest. For that reason I am looking for an active partner to help out with running this hotel, and possibly take over completely in due course as I am close to retirement age, although I will still be there to share in the overall management. Initially, I thought I could do this for a longer time but the full-time engagement is wearing me out a bit.

As a recap, we are a 3-star boutique hotel on Occheuteal, Sihanoukville, which opened in November 2013. The year so far has turned out to be very successful, all things considered. We are two partners (the other one a silent partner already here as he runs a hotel in Phnom Penh) who own the business on leased premises - the lease runs for 10 years with an option to renew; it is almost like a concession on the land. We remodeled 6 existing rooms and added 10 deluxe rooms, a swimming pool, and a nice front and backyard with plenty of tropical plants as well as two small restaurants for serving breakfast and snacks. We added dinner recently.This is a family-style hotel with a personal touch. Guest relations with our mostly Western guests (95%) are conducted on a very personal level. By guest reviews we are alternately ranked number 3 and 4 on booking.com, and number one in our category.

When we started we were looking for someone to manage the hotel, and possibly come in as a partner. Although we met with some interest most of the people didn’t have the funds or no business experience at all. We ended up hiring a manager who unfortunately did a poor job. Being Cambodian he was not attuned to Western guests’ quirks and demands. We employ 10 staff.

 So we are now looking for someone who is interested in becoming an active partner in this hotel who can maintain, possibly even improve, the standard and personal touch. Prospects for tourist arrivals in Sihanoukville are very positive for the next few years. Internet sales come from Agoda and Booking.com. A special listing has been placed on Tripadvisor. We have advance bookings right into March 2015 and are practically sold out for the Xmas, New Year period. We introduced the hotel into the market with very special, comparatively low rates. The investment phase is over. We will charge normal rates for the next high season which will get us profitable margins. The groundwork has been done. This is a unique opportunity for someone to get into the business. A person with previous experience in the hospitality or tourism industry including a business background would be ideal.


As for valuation, the basis is 200,000 shares, with a share being valued at $1.25. The number of shares to sell is subject to discussion with the potential partner/investor. Full financials and records are available. Further details, e. g. investment volume, occupancy, rent, overhead expenses, etc. will be disclosed once personal contact has been made. Active engagement is required. Anybody interested please contact us at camnews001@gmail.com.

Thursday, August 14, 2014

A Very Special Species – The Cambodian Truck/Bus Driver II

Normally, I wouldn’t write about accidents and publish gruesome pictures of them. But this accident ties in directly with the previous post on the subject.

This accident happened in Sihanoukville yesterday. I drove by just after it had happened.  DAP News reports it like this:

The truck came along National road number 4 and was speeding across the intersection at the two Sokha and Tela gas stations. A little further on  the road is full of potholes and motorbikes and cars need to slow down to a crawl. The truck was oblivious to that and hit a motorcycle at high speed, subsequently panicked, veering left and right, running over pedestrians. An oncoming passenger tried to avoid the truck and in the process crossed the road and drove into a low-lying field. The truck meanwhile hit three or four more motorbikes and then crashed into a power line mast. The result: 9 people dead and an unknown number sustained serious injuries. The driver was unharmed and taken into custody.

Cause of accident: a speeding drunk driver.

I say it again, these people don’t know how to handle a truck. Driving along smaller country roads at night is so dangerous I can only advise people against it. When it rains this is almost like a suicide mission. The roads have no markings, the drivers don’t know the width of their trucks, and the chance that they sideswipe you is very high. One can only hope that there is no drunk driver behind the wheel.


Pictures lifted from DAP – News website.










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