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Outside Phnom Penh

Phnom Penh can at times appear like the supermassive black hole at the centre of Cambodia’s otherwise sleepy galaxy—inexorably sucking in all lifeforms, resources and energy under its irresistible influence.

However, if you cast your eyes beyond Phnom Penh’s event horizon, you’ll see a host of bright stars ready for your business. Siem Reap, ranked as the world’s second best holiday destination in 2015 by TripAdvisor, is going from strength to strength, offering myriad opportunities to the enterprising business person.

Cambodia’s beautiful coastline is increasingly attracting global recognition, and that growing awareness has led to exciting prospects for businesses in Sihanoukville, Kampot, Kep and the surrounding areas. Battambang is quickly developing as a local business hub while also establishing a unique identity as an alluring destination for stopover tourists between Siem Reap and Phnom Penh.

Here are some tips about doing business in their cities. We examine the unique regional challenges they face and the various opportunities that exist in their locations.

  • People come to Siem Reap for one overarching reason: to visit Angkor Wat Archaeological Park.
  • As a result, the town relies heavily on these tourists. Siem Reap is a popular option with those in the hospitality and tourism industries, but competition is fiercer than ever.
  • The standard of quality in accommodation, food and beverage, and leisure activities in Siem Reap is some of the highest Cambodia has to offer. Adventure tourism, eco-tourism and golf courses are just a few of the new attractions popping up all around Siem Reap.
  • As tourism to Siem Reap continues to grow, infrastructure capacity issues are arising. Both local government and the private sector are increasingly taking steps to increase this capacity.
  • Water is citysourced, which means you may encounter the occasional shortage. And if you choose to drill a deep well, it may require proper filtration. Waterbanks are a cost effective solution.
  • During wet season, Siem Reap invariably experiences flooding. However, drainage infrastructure is improving considerably, especially around the tourism epicenters.
  • The roads of Siem Reap, and those connecting to the temples and Phnom Penh, have undergone or are undergoing vast development. However, the road between Phnom Penh and Siem Reap remains under construction and may slow travel. Until this route is completed, it remains a small impediment to cross-country travellers from Phnom Penh.
  • Power cuts can be frequent. But, in recent times, Electricité du Cambodge (EDC) has stepped up to meet the high season demand. For those businesses and individuals wishing to ensure stable electricity, backup generators are a worthwhile and affordable option.
  • Installing backup generators is still standard practice for most major hotels and restaurants in the city.
  • Human resources remain one of the chief obstacles to success in the Siem Reap tourism industry.
  • No matter who you hire, specialised skills must be trained. Retaining staff once these skills have been taught is likewise very difficult as opportunities abound for tourism staff once they have desirable skills. Poaching is rife, and may come from employers outside the tourism industry as the Phnom Penh business sphere continues to grow in leaps and bounds.
  • Serviced offices do not yet exist in Siem Reap, and the availability of commercial properties is usually dependent on location and the nature of the business.
  • The top locations are around Old Market/Pub Street area because of the constant stream of tourists it attracts. However, the spaces are very limited, lease conditions are complex, and prices are hiked every time leases are renewed. Some tenants coming to the end of long leases in these areas have faced up to 300 percent rent increases.
  • Although rents in high profile areas of Siem Reap have risen rapidly in the last ten years, in a broad sense this is good for the market.
  • By increasing the property prices in the Siem Reap CBD and key residential areas, the property market is naturally defining higher value areas. This will increase the value of the overall real estate market in future years.
  • Education in Siem Reap runs behind the capital’s offerings, although an increasing number of international schools are opening. The city is home to the Royal Angkor International Hospital, which is affiliated with Bangkok Hospital Medical Center. There are also ambulance and medevac services available.
  • One of the last strongholds of the Khmer Rouge, located in the Northwest of Cambodia, Battambang is the nation’s second largest city and the fifth largest province, boasting a population of slightly over a million people. It is the richest province in terms of income per capita.
  • Battambang’s fertile rice fields have led to a predominantly agriculture-driven economy, earning it the moniker of “Cambodia’s Rice Bowl”.
  • Other forms of local agriculture are also lucrative, such as Battambang’s famous green oranges. The city is even home to a vineyard and winery, located close to Phnom Bayon temple.
  • Considered the arts capital of Cambodia, Battambang is the birthplace of the famous psychedelic rock/garage rock singer Ros Sereysothea. Upholding this creative tradition are various art galleries and, of course, the revered Phare Ponleu Selpak circus and arts school.
  • In light of Battambang’s “unspoiled” image, interesting history and the wealth of well-preserved French colonial architecture in the city centre, tourism is rising and the food and beverage industry is taking off.
  • Consistent electricity is a problem in Battambang, and business owners that depend on full-time power will need to factor in the cost of a generator. Sometimes I feel like the generator powers the restaurant more than the grid.
  • Water is citysourced, or sourced via deep wells and may require filtration for safe drinking.
  • By the end of high season we are continuously calling up the ‘water truck’ and have our tanks filled up with unfiltered water extracted from the river.
  • Sihanoukville’s commercial and tourism industries have both expanded enormously lately.
  • Domestic and international tourists have both tripled in the last 5 years (from 469,000 in 2009 to 1.3m in 2014, according to the Ministry of Tourism). The recent emergence of the offshore islands and Otres beach as a tourism destinations drives part of that growth, alongside the rapid increase in casinos, flights and cruise ships.
  • The expansion of Sihanoukville’s deepwater port and the boom of the Special Economic Zones (SEZs) makes it Cambodia’s commercial gateway to local and international trade.
  • Cambodia’s only deep-sea port is located here and considerable international aid has been spent to improve the infrastructure in the province. Although tourism has increased over the past few years, the beaches of Sihanoukville are still some of the most unspoiled in all of Southeast Asia.
  • This expansion is also driving land value and rental cost appreciation, especially where development is spilling over into new areas. New hotels in Otres 2 over the last two or three years was a factor in the doubling of land values.
  • Sihanoukville has developed as a tourism destination in a short space of time. This is naturally putting pressure on amenities such as water supply and electricity, although power cuts and water shortages are much less frequent than in Kep or Battambang.
  • Sadly, for liquid and solid waste, Sihanoukville is a victim of its own success. Growth has far outstripped the waste water infrastructure. Fortunately, the Sihanoukville Provincial authorities are well aware of the sewage issue and allegedly in the process of looking at options and seeking tenders.
  • With improvements being made to the airport currently, and plans in the pipeline to build an international airport on the island of Koh Rong, business in the province is expected to be boosted greatly in the near future. Cambodia Angkor Airlines, the national carrier, flies daily from Siem Reap (REP) to Sihanoukville (KOS), and Phnom Penh (PNH) to Sihanoukville (KOS).
  • There are scheduled flights to Kunming in China, Singapore and other destinations in discussion. The rapid number of Chinese backed casinos will also likely lead to an increase in charter flights to support the industry though most will be underpinned by online gaming.
  • A new road linking Phnom Penh to Sihanoukville alongside National Road 4 is part of the Cambodian Road Development Masterplan. This will make a big difference in terms of speed and safety for trade and tourism.
  • The islands off Sihanoukville are increasingly being sold to large developers, and a string of luxury resorts are gradually laying claim to large stretches of beach, some of which were already occupied by smaller hospitalities operators. Keep in mind, any new beach- or island-based business cannot guarantee their land will not one day be sold from under them, as many vendors have experienced in the last ten years.
  • Guarantee full and proper due diligence is done in checking the legitimacy of all titles and/or lease agreements when considering any investment in these popular areas, or branch away from the beach.
  • Kep Tourism has grown steadily for the last seven years and Kep is now among the top five Cambodian tourist destinations. There are now almost 90 guest houses and hotels in the town.
  • For the most part, Kep gets its power from Vietnam.
  • A few months ago the backup connection to the Kampot Power Grid was also established. This means there aren’t any power cuts longer than 30 minutes: the time for the Kep Power Supply employee to switch to the Kampot power.
  • The Sonja Kill Hospital in Kampot is regarded as one of the best medical centres on the Cambodian coast. Although, any serious injuries are referred to Phnom Penh or abroad. A few months ago the Naga Pharmacy opened its doors and provides quality medicines with support from a qualified pharmacist. They even have a doctor present during the evening.
  • Schooling-wise, The Kep International School (KIS) is now open. They follow the Cambridge curriculum and cover classes until the 6th grade.
  • There is an ATM at the Beach (ABA Bank, near Koki Restaurant) and an ACLEDA Bank with ATM at the Damnak Changeur which also facilitates Western Union payments.
  • The recently opened Crab Shuttle, between Kampot and Kep, gives tourists the possibility to travel by boat from Kampot to Kep, spend the day here and then take the sunset cruise back to Kampot. There has even been talk (unconfirmed) of the possibility of a Kep International Seaport which would allow direct boat connections to the Vietnamese Island, Phu Quoc.
  • Water in Kep is generally drawn from personal wells, or bought. And as more guest houses are built, less and less water is left in each well, and each new well must be deeper than the last.
  • The road from Phnom Penh to Kampot is now complete; one of the finest highways the country has to offer. When the South Korean financed Road 33, from Kampot to Kep, Kompong Trach and Angka Saum (a historically hazardous transfer), is totally finished this year, trips between Kep and Kampot will be much safer and smoother.
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