Marriott among the new arrivals
The growth of Cambodia’s casino industry, fueled by an infusion of investment capital and a low fixed tax rate, is drawing global hotel brands to Sihanoukville.
The Phnom Penh Post reports that U.S.-based Marriott International, UK-based InterContinental Hotels, and the French Accor chain are all moving into the marketplace, an influx that could end the coastal city’s chronic shortage of rooms and further its development as Cambodia’s premier beach destination, especially in the four- and five-star category.
Earlier this month, Marriott announced that it signed a deal with Cambodian real estate firm Grand Lion Group to manage a 388-room, five-star hotel under development in Lek Bei commune near Hawaii Beach. The hotel, which will operate under Marriott’s Le Meridien brand, is scheduled to break ground in January 2019 and open in 2022.
InterContinental Hotels & Resorts, with more than 5,000 properties worldwide, is close to wrapping its 17-story, 476-room, $77 million hotel project in Lek Bei. AccorHotels Group, which manages over 4,300 hotels across the globe, has also acquired property in Sihanoukville and will build a 214-room four-star Novotel hotel at Independence Beach. It is expected to open in the third quarter of 2019.
Joyce Ong, AccorHotel’s regional director of communications, said Sihanoukville is in a prime position as a leading beach resort destination and the company is “confident that the hospitality industry will continue to grow in Cambodia with increasing flight traffic and tourists.
“With AccorHotels already covering the luxury market with the Raffles and Sofitel brands, which are already present in Phnom Penh and Siem Reap, our new hotels seek to fill demand for more affordable accommodation and increase our offerings in Cambodia to cover every segment from economy to luxury,” she said.
According to the province’s Tourism Department, 2 million visitors came to Sihanoukville last year, including 470,000 foreigners, more than a quarter of them Chinese. Its 80 hotels and 300 guesthouses are often booked solid during holidays. Another 10 hotels are under construction and scheduled to open in the next two years.
“Demand for hotel rooms exceeds supply in Sihanoukville, especially during special festivities such as Khmer New Year and the Water Festival,” said Norn Thim, sales and leasing manager of Sihanoukville Property. “The Chinese have rented most of the hotels [to house casino staff,] leaving few hotels available for tourists. So the arrival of world-class hotels in Sihanoukville will fill this supply gap.”
The tax under consideration would fall in the “mid-single digits” of GGR for Cambodian operators, said a note from brokerage Union Gaming Securities Asia Ltd. In late 2017, NagaCorp Chairman Tim McNally told GGRAsia that the firm’s effective tax on total revenue in 2016 was “about 4.8 percent.” NagaCorp posted net profits of US$255.2 million for 2017, up nearly 39 percent year-on-year; revenues increased 80 percent year-on-year to US$956.3 million, the firm said in a filing in early February.
