Sihanoukville Tourism & Property Market Update January 2020
How a coastal village transformed into a megacity has developers asking what will come next? Online gaming ban becomes key market disruptor
Sihanoukville International Airport Arrivals Number of Passengers
“Sihanoukville was originally a peaceful coastal village set in the southwest of Cambodia. In the past, it attracted mostly Western tourists and was once a weekend getaway destination for locals. However, starting in 2017 the dramatic inflow of Chinese investment driven by the Belt and Road Initiative has changed the seaside town completely.
750,000
Prior to 2016, only limited domestic and charter flights served Sihanoukville airport. The emerging market has drawn attention from various segments especially the gambling sector and brought hundreds of thousands of Mainland Chinese workers and investors to the city. As of YTD October 2019, the city’s main getaway Sihanoukville International Airport hosted 602,755 passenger arrivals, which is a 266% y-o-y growth compared to the same period in 2018. Land values, rents and condominiums sales prices have skyrocketed during a three-year period due to the surging demand and massive development of the city.
0
Trends
600,000 450,000 300,000 150,000 2016
2017
2018
YTD Oct 2018
YTD Oct 2019
Source: Ministry of Tourism Cambodia and C9 Hotelworks Market Research
Without a doubt, the Cambodian ban of online gambling, driven by the Chinese government has hit the tourism and real estate sector hard. Yet, ongoing construction of public infrastructure and development of Sihanoukville Special Economic Zone (SSEZ) will likely contribute to stabilizing development in the medium to long term.” Bill Barnett, Managing Director, C9 Hotelworks
Forward Outlook
•
As of YTD Oct 2019, Cambodia’s top three geographic source markets account for 58% of the total inbound arrivals, which are Mainland China, Vietnam, and Thailand.
•
Sihanoukville International Airport is undergoing an extension of the runway to serve larger aircraft. Completion of the project is expected to be this year.
•
Currently, the Sihanoukville airport has direct connectivity to four countries, serving 27 destinations and 22 cities in Mainland China.
•
Mainland China is the largest target market for real estate investment, market-wide sales prices average USD1,900 per square meter.
•
There are 3,296 hotel keys in Sihanoukville at present, ranging from midscale up to the upper upscale tier. These properties tend to have large room stock that caters to groups.
•
Despite the challenged online gambling sector, future growth is expected to be diversified in various segments with a focus on the industrial industry together with a rebound in tourism.
TOURISM Demand Indicators As of YTD October 2019, passenger arrivals through the three main Cambodia airports totaled 3,711,335, representing a 12% y-o-y increase compared to the same period of the previous year.
Major Cambodia Airports Passenger Arrivals Number of Passengers 2,000,000 1,500,000
1,000,000 500,000 0 2014
2015
2016
2017
Phnom Penh
2018
YTD Oct YTD Oct 2018 2019 Sihanoukville
Siem Reap
Sihanoukville recorded the highest CAGR (92%)among the three airports between 2016 to 2018
Source: Ministry of Tourism Cambodia and C9 Hotelworks Market Research
Sihanoukville International Airport Monthly Arrivals Number of Passengers 100,000 80,000 60,000 40,000 20,000 Jan
Feb
Mar
Apr May
Jun
2017
Jul
Aug Sept
2018
Oct
Nov
Dec
After arrivals peaked in July 2019, they dropped month by month due to the online gambling ban
2019
Source: Ministry of Tourism Cambodia and C9 Hotelworks Market Research
Cambodia Key International Geographic Source Markets Number of Passengers
%
2,500,000
30
2,000,000
20
1,500,000
10
1,000,000
-
500,000
-10
0
-20 Mainland China
Vietnam
Thailand
YTD Oct 2018
YTD Oct 2019
Laos
Korea Growth Rate
Source: Ministry of Tourism Cambodia and C9 Hotelworks Market Research
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C9 Sihanoukville Market Trends: Jan 2020
Mainland China accounts for 38% of total passenger arrivals as of YTD Oct 2019, posting a CAGR of 43% between 2015 to 2018
HOTEL AND PROPERTY MARKET Current Hotel Supply Number of Keys
Sokha Beach has the highest concentration of hotel developments, with a total of 1,458 keys
Number of Hotels
1,600
12
1,200
9
800
6
400
3
-
-
Keys
Hotels Source: C9 Hotelworks Market Research
Condominium Project Pipeline Number of Units
Pipeline Development Composition
Number of Projects
16,000
12
12,000
9
8,000
6
4,000
3
-
11%
33%
56%
2020
2021
2022
Condominium
2023 Projects
Condominium Only
Mixed-use
With Hotels
Source: C9 Hotelworks Market Research
While there is massive construction of buildings in the city, key projects total 18 developments, representing 30,549 condominium units. All upcoming projects include condominiums; with six mixed-use properties also having hotels, shopping malls and office buildings.
Hotel Pipeline Hotel Name
Location
Keys
Opening Year
Novotel Sihanoukville Holiday Resort
Independence Beach
232
2020
Won Majestic Casino Hotel & Resort Cambodia
Sokha Beach
150
2021
Le Meridian Hotel Prince Tian Xi Wan
Hawaii Beach Victory Beach
388 393
2022 2023
Note: Projects only include properties with international brands or key developers
Source: C9 Hotelworks Market Research
C9 Sihanoukville Market Trends: Jan 2020
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About C9 Hotelworks C9 Hotelworks is an internationally recognized consulting firm with extensive experience in the Asia Pacific region. Its core business focus includes: • • •
Hotel and Resort Development Asset Management / Ownership Representation Project Feasibility and Analysis
Key competencies include international hotel operator search, selection and contract negotiation, mixed use hotel and residential planning and operation reviews. A wide range of both institutional and private developers and a comprehensive portfolio of completed projects give C9 the skill set and background to focus on key issues, evaluate complex ones and assist clients in achieving solid results. Based in Phuket, Thailand and led by Managing Director Bill Barnett, who has 30 years of experience in Asia Pacific, the firm is well positioned to serve an increasing demanding marketplace.
C9 Hotelworks Company Limited 9 Lagoon Road, Cherngtalay, Thalang, Phuket, 83110, Thailand (Office located at the entrance of Laguna Phuket) T: +66(0)76 325 345 www.c9hotelworks.com info@c9hotelworks.com