Tourism is a “major focus” of Cambodia under the new leadership of the country’s Prime Minister Hun Manet, as the Southeast Asian country has “set up many initiatives to attract Chinese, not just Chinese tourism, but in general, all tourism to Cambodia,” notes gaming expert Daniel Li in an interview with AGB.
Daniel Li is a gaming expert appointed as a senior consultant at Cambodia’s gaming regulator, the Commercial Gambling Management Commission of Cambodia (CGMCC).
After Singapore, Thailand, and Malaysia adopted mutual visa-free policies with China, Cambodia may have an opportunity to follow suit, since according to Daniel Li, China is “still one of the biggest supporters and investors of Cambodia,” and “China has placed a lot of infrastructure development. They have invested, and they are encouraging legitimate businesses to open in Cambodia.”
Regarding the Cambodian gaming recovery, Li indicates that air connections between China and Cambodia are still far below pre-COVID levels. In this context, “the Cambodian government is working very hard now to try to add more flights to China, and with China’s support, we would probably see more tourism coming in from China.”
He believes that the government’s efforts to attract more visitors will further support Cambodia’s recovery this year. If a visa-free policy is implemented between Cambodia and China, the country could expect more visitors coming from the world’s second-most populous country.
“After COVID, we have seen a sharp drop in flights and arrivals. So one of the things that they do need to do is to increase the number of flights from China. Then we will be able to see more action from Chinese tourists in Naga or people coming specifically to gamble,” says Li.
According to the tourism report for 2023 by the Ministry of Tourism of Cambodia, international tourist arrivals have recovered to 82.5 percent in 2023 compared to 2019. The recovery of visitation from China still lags behind with a recovery rate of 23.2 percent. About 71.9 percent of the total Chinese visitor arrivals were business travelers.
Based on data cited from NagaCorp’s annual financial results, currently, direct weekly flights from the Greater China region to Cambodia only recovered to around 26 percent of the 2019 level.
Furthermore, 2024 has been declared as the “Year of People-to-People Exchanges” between China and Cambodia in order to boost tourism, trade, and investment cooperation more actively, during a meeting between the Cambodian Prime Minister, Hun Manet, and the Chinese President, Xi Jinping.
In addition, the new inauguration of the Siem Reap Angkor International Airport and the under-construction Phnom Penh Techo Takhmao International Airport, expected to be fully operational by 2025, will contribute to an increase in arrivals.
Cambodia has big hopes that these new airports will play significant roles in attracting international arrivals and benefiting the future of tourism in Cambodia, as well as acting as catalysts for Cambodia’s economic growth with new routes and destinations.
Naga’s challenges
Hong Kong-listed NagaCorp holds a monopoly gaming license, which has exclusivity within a 200km radius of the country’s capital Phnom Penh until 2045.
Speaking to AGB in a personal capacity on the sidelines of the ASEAN Gaming Summit, Daniel Li notes that amid a dynamically changing gaming market landscape, particularly with Thailand likely to legalize the casino business, it will further intensify the competition in the region in the long term.
He notes that NagaCorp has been successful in the past due to the region’s circumstances, with the Cambodian market being in a “very unique and niche jurisdiction where Thailand would not have a casino.”
Facing the recent changes, he considers that Cambodia needs to reinvent itself, while the Cambodian gaming operator NagaCorp has to redefine its strategy.
According to NagaCorp’s latest financial results, the company’s gross gaming revenue (GGR) increased by 15.5 percent to $514.8 million in 2023 compared to $445.9 million in the previous year.
Referral VIP market GGR grew by 67.6 percent in 2023 to $44.2 million compared to the previous year, contributed by a 52.3 percent increase in business volumes. With a high proportion of Chinese business travelers despite low Chinese arrivals, Naga interprets that ‘this has underpinned the positive business volume growth of the Premium VIP Market despite the lagging recovery in outbound travel from China’.
