China arrivals fuel growth

China tourism arrivals to Cambodia topped the 1 million mark for the first time in 2017, setting the stage for continued gains in the country’s casino sector, which is currently seen as one of the most promising emerging markets in Asia.

In the first 10 months of 2017, overall arrivals rose 10 percent to 4.3 million visitors, with China arrivals accounting for about 21.9 percent of the total. China overtook Vietnam to become the leading source market for the country, with visitor numbers up at least 45 percent to 950,000 in the period.

The year of 2017 will be the first year that Chinese tourists to the Southeast Asian country have surpassed the 1 million mark, Cambodian Tourism Minister Thong Khon told the Xinhua news agency in a recent interview.  “It is a milestone year for tourism relations between our two countries,” he said.

Cambodia is forecasting further gains for overall arrivals in 2018, helped by improved flight connections with China, while by 2020 it expects visitor numbers to exceed 7 million, with 2 million of those from China.

Cambodia has adopted a “China Ready” tourism strategy aimed at boosting ties, including targeted marketing campaigns and special training for Cambodian hospitality staff to ensure they are able to meet the needs of Chinese guests. As of November, a total of 27 Cambodian tourism outlets, including restaurants and hotels, had been granted the official “China Ready” accreditation certifying they meet the service standards expected by the Chinese market.

Ha Tien Vegas drives beach clean up

Ha Tien Vegas recently organized the biggest-ever clean up of the nearby Kep’s Angkol Beach in an ongoing community and environmental initiative. At least 220 volunteers, representing 40 percent of the casino’s workforce, gathered 10 tons of rubbish from the 1km stretch of Kep’s coastline. More than 700 bags of trash were ultimately hauled away in 12 trucks for proper disposal. “Not only did this day prove to be a positive event for the local environment, it was also a great team-building exercise for all our employees and management,” said Managing Director Rhys Jones.

Donaco wins case to shut Star Paradise

Australia-listed Donaco International said it has won a court injunction to close the Star Paradise casino in Cambodia, which it says is operating in violation of a non-competition agreement signed when it bought its Star Vegas property in Poipet. The casino, which

is operated by the former owners of the Star Vegas, had agreed at the time of the sale that it would not conduct gaming operations at the adjacent resort. The Banteay Meanchey Court of First Instance in Cambodia has now issued an interim injunction against the vendor, a Thai businessman named Somboon Sukcharoenkraisri and his two sons, who were also accused of breaching the accord.

 

The country’s casino sector is also expanding in tandem with the rising tourism numbers. Cambodia has issued licenses to 79 operators and the standards are beginning to improve, with a gradual shift from the dusty border casinos catering to local Vietnamese and Thais crossing for a flutter on the tables to a higher-quality offering.

“The Cambodian coastline is the hottest place to be right now for land based,” said Tim Shepherd, founder and managing director of Fortuna Investments. “What is being built there is nothing short of breath-taking. Its claim to be the “the next Pattaya” is becoming a reality. But with a difference as this one is going to have amazing resorts and of course casinos.”

Much of the focus has been on the beach resort of Sihanoukville, which is being opened up by improved transport links.

“With Air Asia’s recent start of a four times a week service from Kuala Lumpur, Sihanoukville now has a sufficient amount of airlift to grow its tourism market,” said Andrew Klebanow, partner at Global Market Advisors. “Add in additional flights from China and there is potential for significant growth in the market’s land-based casino offerings. Should another airline start direct flights from Bangkok, then Sihanoukville has tremendous potential to develop into a true gaming-resort destination, assuming the development of a sound regulatory environment.”

The government had been scheduled to pass long-delayed legislation for its casino sector in 2017, though as of publication it still has not seen the light of day.

The gaming bill was submitted to the country’s cabinet in September and is expected to set out a new tax regime, as well as formalizing a system for licensing; regulation of junkets; accounting and reporting procedures; greater disclosures and anti money laundering rules.

Ros Phearun, deputy director-general of the Finance Ministry’s financial industry department, told local media that the bill will help the government to manage the fast-growing sector, but also to attract more large-scale foreign investment.

Operators have said the bill may spark a shake out of the country’s smaller casinos.

Cambodia only has two listed casino operators and the government doesn’t release official figures for gross gambling revenue. In 2016, the latest figures available, government tax revenue from the industry jumped 38 percent to $48 million, boosted in part by back taxes on non-gaming revenue collected from the country’s biggest operator Nagacorp.

The operator reported another strong year in 2017 and also opened the second phase of its Phnom Penh resort, doubling the footprint of the property.

Since its initial public offering in 2006, NagaCorp has proved to be one of Asia’s success stories, generating compound average revenue growth of 19 percent for each of the past five years and management expects that double-digit pace to continue.