Cambodiana Investment Pte. Ltd. was one of the first foreign investors coming to Cambodia. Can you introduce us the hotel and its historical background?

Hotel Cambodiana is an investment realized by a Singaporean company called Cambodiana Investment Pte. Ltd. The owners of the company, Mr. Lim Bantoon, Mr. Steven Lek and Mr. Peter Lek came in 1988 to Cambodia and signed an agreement with the government to lease the hotel and the land on which the hotel is built. That same year, the refurbishing of the hotel started and it officially opened its doors at the beginning of 1991. The lease agreement is for 70 years and the surface where the hotel stands is 3,5 ha. The location of the hotel is at the junction of the four rivers the Upper and Lower Mekong, the Tonle Sap and the Bassac. When we came, the structure of the hotel was already built. We did the decoration, elevators, air conditioning and so on. The construction of this hotel was commissioned back in 1968 by King Sihanouk and formed part of tourism development project along the river. Next to this hotel, were also a V.I.P. bungalow hotel and a casino, which was burned during the war.

We were already fully operational even before the signing of the Peace Agreement in October 1991 in Paris. 1991 was a very difficult year because we didn't have many guests. When the King himself came to Cambodia in November 1991, we saw plenty of countries re-establishing diplomatic relations with Cambodia and also the delegations of the UN settling to help develop the country and all its political activities. Not only the UN had its offices in our hotel, at a certain point we achieved to host thirteen ambassadors because there was nowhere else to stay. There was no electricity so it was hard to get a house in conditions. The hotel is self-sufficient producing its own electricity, treating its water and importing its own gas. So 1992 and 1993 were quite busy years for the hotel.

After the UN personnel left in 1994, occupancy went down because there was not much economic growth, in 1996 and begin 1997 although we saw the construction of two competitors, the Intercontinental and the Raffles. Then in July 1997 we were confronted with the social unrest and also the Asia crisis. We had a few bad years but we managed to survive after drastic actions. In 2000 tourists started to come back. In the year 2001, we managed to restore some confidence to the travel agencies to send some tourists and there was renewed of interest of some investors to return to the country. It was at that time that Cambodia joined the ASEAN. In this context, we saw a substantial increase on the political activities, especially within the region. So we started to have meetings between the ASEAN countries and with financial institutions like the IMF, Asian Development Bank, World Bank and all the donors to Cambodia.

Currently we are being hit by the war in the Middle East. Most of our European reservations have cancelled because of this conflict. At the same time we got the double blow of the appearance of SARS, which is quite bad for all the Asian countries. Our main guests come from French and Japanese tourism and the Chinese (PRC) and Singaporean businessmen. Due to the war and the SARS a lot of them cancelled. Having said that, April is also the beginning of the low season for Cambodia, so it is quite normal to experience a slow down in occupancy.

We are also worried about this year due to the upcoming elections in July 2003. Generally, when elections take place, there is a slow down in occupancy rates, as people want to wait for the result before taking action. Right now it is a wait and see situation.

Can you give us some key figures of the hotel?

We have 300 rooms including 24 suites. There are four restaurants: one Italian, one French, one Asian, a coffee shop and a bar. We have banqueting facilities for 600 people, three smaller meeting rooms for smaller size conferences. There is also an executive floor and business center designed for business travelers, meeting their specific needs. There is also a swimming pool, which is a luxury here in Phnom Penh; two tennis courts, a gymnasium and a spa center. Next to that there is also 20.000 sq feet of office space. Just to name a few of the companies present in our hotel there is Sumitomo, Mistui, Maersk, Alcatel and the Franco-Cambodian Chamber of Commerce.

We have 460 employees, 430 full time, casual employees are hired for special activities like banquets. What concerns occupancy, the average for 2001 was 65% and for 2002 it went down to 55%. This can be explained mostly because of the effect of the Open Sky Policy of the government. Before the Open Sky Policy, all flights were coming to Phnom Penh for one night and then went on to Siem Reap. Currently 65% of leisure inbound trips go directly to Siem Reap, this explains our loss of occupancy.

What concerns turn over, our room rates decreased tremendously from 1997 to 2000 but then went back again. Presently our average room rate is between 62 and 65 USD. In 1997 we were above the 100 USD.

When we see the evolution of the Cambodiana throughout the years, Ambassadors, UN officials and delegations from several organizations along with businessmen have been your main clients. Is your strategy exclusively directed toward business travelers?

We changed our strategy over the last two years. What we are doing now is to focus on all conferences. It is a very interesting market segment for us because they not only consume rooms, but also the rest of the facilities of the hotel, which is what we need. So we are looking at the trend of the last two years and this is a market that is developing quite fast. As you said it's connected with the government, embassies and the UN, the EU and all these organizations, which are here to help politically and financially the country. There are more and more meetings and trainings organized by these organizations here in Phnom Penh, so we are reinvesting in our facilities keeping in mind the needs of these groups.

We focus on business because as long as the Open Sky Policy is in place and as long as the country is not completely open; with new destinations where we can offer various packages for tourists to stay three, four, five nights within Cambodia, tourists may carry on to bypass Phnom Penh. Indeed, the strategy is to invest in our rooms and the conferences and banquet facilities to attract the business travelers. But of course will encourage the tourist to come to Cambodia.

Do you have any specific project to attract those tourists towards Phnom Penh or to invest yourself in other sites of Cambodia?

As a single company we cannot sway markets around. But we are working closely with the Ministry of Tourism to develop more awareness about tourism in Cambodia and specifically to Phnom Penh. On that matter I really have to take my hat off to the Minister of Tourism and his team because they have done a very good job in the last two years. They demonstrated it especially during the ASEAN Tourism Forum last January. It was a fantastic organization, some of my guests said it was the best ATF they have attended. Furthermore they have launched many brochures. The Minister is very active and is extremely good at Public Relations. We are joining them to help in as many things as we can. With this in mind we have created the Phnom Penh Hotel Association and through the association we try to work closer with the travel agencies and the airlines to get packages together and new ideas to promote Phnom Penh as a destination other than Siem Reap. We are helping as well in different forums between the public and private sectors to raise issues and proposals to promote and develop more the interests for tourism to Phnom Penh. It has started to pay off. The more we expose Cambodia through activities like the ASEAN Tourism Forum, the "Visit Cambodia Year" and campaigns in the embassies who transmit information about the country, the more Cambodia will be in the spotlight.

There are not many new destinations worldwide, as soon as Thailand and Vietnam get saturated and markets like Myanmar keep being politically uncertain, Cambodia will remain as the new venue. The view of the Minister of Tourism to achieve the goal of 1 million visitors is achievable. If you realize that Singapore is doing over 7 million tourists a year and Thailand over 10 million, the goal of the Minister is realistic. Keep in mind that these one million visitors can be achieved only with Siem Reap and a little bit in Phnom Penh. There is still a huge potential of development for the whole country.

Currently your company manages the hotel. As you said earlier, you used to have a managing contract with Sofitel-Accor. Are you planning in the near future to get back to one of those managing contract with an international chain or you want to keep the formula you are using now?

We are always open to the two options. As an investor, I am always looking into how to get the best return and the best value of my property and my investment. It's a question of making the right decision at the right time. Today, our decision is to manage the hotel ourselves; we have the expertise in management and a long term service staff, most of them have been here since the opening. We have, I believe, a very good understanding of the market and what is Cambodia. Right now it's not the proper time to give the toy to somebody else to play with.

Can you tell us more about your career path, your experience in Cambodia and your greatest satisfaction while working in this country?

I have a vacational training certificate at the Hotel Management School in Strasbourg. I started working in Paris for four years with the group Accor. Then I went one year to Abu Dhabi, to come back to Europe, in London, for four years. In 1988, I arrived to Asia where I worked in Singapore for one year, then in China for two years. From there I went for the first time to Cambodia. I moved on again to South Korea. In 1995, I opened my own business in Singapore as a consultant for hotel management. At the same time I invested in the company owing the hotel Cambodiana.

My greatest satisfaction in Cambodia has been to see the development of my staff. Six months after my arrival in 1991, I had to change the uniforms of my staff because they were much more healthy than when they started. It is indeed a great satisfaction to have given jobs, hope and something to look up to. Most of my initial staff is still here, they have their own families and they have also evolved professionally. Furthermore plenty of my managing staff is Cambodian. It is fantastic to have seen their evolution.

As a businessman having private investments in the country, what would be the final message you would like to transmit to potential investors interested in Cambodia?

Cambodia is a place you either love or you don't. If you want to invest here, you must love it. Why? Because it is a difficult place to work in. To manage a company here, you must consider yourself as a captain; you are in your own boat and even if there is no wind, you have to make sure you bring your boat forward. If there is a storm you have to keep your boat floating. This is why I compare a businessman here to a captain of a boat. We all want to make money, but you have to understand that there are some aspects of the Cambodian economy that are still in the stage of infancy, such as laws; technical assistance; training, etc. Due to this difficulty you have to make sure you love the country, otherwise it will be difficult for you to make business here. There are still a lot of opportunities; it is just a question of how much guts do you have and you also need to have a special profile to come over here.