A Desirable Resort Project

The following is a description of a project for such a resort.

Cambodia has 443 km of coastline extending from the Thai border near Trat to Vietnam about 20km from Kep in Kampot province.

The beaches in Kampot province are usually rocky and if sandy the sand is grayish in color due to the lava rock formation. Kep town itself boasts of just one short stretch of about 1 km of sandy beach.

For this reason we consider Kep not suitable for this project, perhaps at a future time it might be ready for such a development. But at the present time only the beaches of Sihanoukville offer the environment for this project. Otres Beach offers a laid-back and serene environment, a tranquil beach, clear and clean water, day-trip destinations, such as Bokor mountain, the former casino (which is reported to be re-developed shortly), magnificent limestone caves near Kampot, a private zoo with tigers and other local fauna, multiple islands as a lover's getaway, snorkeling (though no corals but still views of colorful sea life), truly local ambience, and a multitude of restaurants serving great seafood.

Sihanoukville is fully electrified. The envisioned location of this project can be easily connected to the power grid. Wells provide drinking water. Septic tanks (to be installed on the property) will take care of sewage. The road from Phnom Penh was renovated and is well paved. Traveling time from the capital is about 2 1/2 hours.

This offers an opportunity for a medium-sized 3 to 4-star resort with initially about 50 to 60 rooms/bungalows (with room for expansion to 100 to 150 rooms) with a full infrastructure, e. g. tropical garden, restaurant with Western and Asian cuisine, souvenir shop, entertainment facilities (Apsara dances, Karaoke lounge, dancing), satellite TV and video, beach activities. We are sure we won’t be the first or the last to arrive on the scene with such a project but the complete absence of similar-priced full feature resorts will make it a successful and highly marketable addition to the tourism industry in Cambodia.

The 3 to 4-star category offer the best chances for marketing such a property worldwide successfully. It will attract middle-class to upper middle-class customers and their families seeking a good price/product value ratio, who also have good purchasing power for all amenities and other activities. This segment represents the largest share of the consumer base in industrialized countries.

The key for the success of any commercial enterprise is marketing – in creating demand for the product. Nowadays, the worldwide availability of the Internet offers any business the chance to market its product through that venue at a so far relatively low cost. The problem, however, is to be seen when people search the web, getting the ‘hits’. One way to reach the maximum number of people is by advertising on Goggle.

The old-fashioned way is, of course, to market the facility through large tourism agencies, e.g. Diethelm travel in Bangkok with Asian-wide offices and representations in Europe and North America, and other large agencies in Asia and most importantly, China. These ‘wholesalers’ sell tourist destinations to tour operators, which, in turn, sell to the consumers through catalogues, advertising, Internet, word-of-mouth, promotions, and trade fairs.



A combination of these will ensure the success of the property over the medium term. It is estimated that the threshold to profitability can be reached in 2 – 3 years after completion.

Land prices vary greatly at this time; currently $100/m2 must be anticipated. Over the short-term further price increases are to be expected. Construction costs will be projected in the appropriate chapter. Labor cost structures are low due to the availability of unskilled labor, which will be trained on-site. An emphasis will be placed on returning value to and on engaging the local community and population.

Cambodia's Investment Law also offers incentives for foreign investment, e.g. 9 % corporate income tax, tax holidays of up to eight years, full import duty exemptions for export-oriented projects, free repatriation of profits, no nationalization and price control, no withholding tax on


dividends, five year loss carried forward.