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Sihanoukville’s Expectations Can Match The Hype

For years now, the key southern coastal city of Sihanoukville has been in the limelight, a once popular tourist destination for many foreigners and Cambodians, the city underwent rapid transformation & saw a spike in property prices, massive infrastructure development and tourism decline.

At times the city has been unsure of its outlook and direction, and although it does still face headwinds, piece by piece elements that showed its great promise are coming together.

Tourism – Sihanoukville Needs To Be More Than A Gateway To The Islands

There was a time when many domestic and international tourists would flock to the Cambodian coast, and especially to Sihanoukville. Otres and its many numbered beaches in particular were lively before the city underwent its infrastructure makeover and tourism dried up due to the pandemic.

The guesthouses, beachside restaurants and bars were forcibly removed or moved on, and several business owners relocated to nearby Kampot, Kep or to the islands – the city had changed, the construction was overbearing, casino-hotels dominated the scene and there were more criminal elements.

Tourists would still pass through the city as a gateway port to reach the beautiful islands of Koh Rong and Koh Rong Samloem but few would stay long in the city. The pandemic largely put a halt to the tourism sector.

After online gambling and casino laws changed, and massive infrastructure projects slowly crawled to completion or suspension, the city started seeing a slow resurgence post-COVID despite the many obstacles of recent years, which included the absence of Chinese visitors who had been a key tourist and investor segment.

Sihoukville Development

In December 2022, the Preah Sihanouk area welcomed 700,000 tourists for the Sea Festival – a first sign of the resurgence in mass tourism to the area. In the second half of 2022, Cambodia has seen a dramatic rise in international visitors and expects to welcome around 2 million international tourists by the end of the year.

Vinci Airports, the parent company of Cambodia Airports, has also expressed further expansion plans for Sihanouk International Airport. Prior to the pandemic, due to the increased growth of international flights and visitors to the area, a 3,300-meter runway extension project was completed (to handle long-haul Code E aircraft), and a new temporary arrivals terminal and a VIP building were added in 2021

Development And Diversification Of Preah Sihanouk

It’s also important to acknowledge that valuable lessons have been learned from the international border closures caused by the pandemic, and diversification is a key one.

Very few international visitors have been jetting into Sihanoukville over the past couple of years but the area is a key economic and tourist attraction for the Kingdom. Hun Sen has said as much of the potential of Cambodia’s coastal areas, nicknamed “The Rising Star of the Southwest”.

The Ministry of Economy and Finance and China’s Urban Planning Design Institute of Shenzhen (UPDIS) have also been reviewing the master plan for transforming Preah Sihanouk province into a model multi-purpose special economic zone – intended to be the roadmap to develop the area into a “second Shenzhen city”, in line with the implementation of the national Industrial Development Policy 2015-2025.

Since the post-pandemic recovery has been underway, the Asia-Pacific region has been the main source of visitors for Cambodia and the start of the traditional tourist season (December-February) has already seen increased numbers from beyond the region returning to our shores.

Sihoukville Economic Hub

Other recent key development and economic highlights in Sihanoukville include:

  • The Asian Development Bank approved a $73 million financing package to boost the climate resilience and sustainability of coastal and marine fisheries in Cambodia – It will help coastal provinces address the decline in fisheries, promote sustainable mariculture, and improve seafood safety.
  • Sihanoukville Autonomous Port’s new container terminal will allow larger container vessels to call on the port (expected to be completed by mid-2025).
  • The largest power generation project in the country was launched in Q4 2022 – the Huadian Preah Sihanouk coal-fired power plant.
  • A five-star hotel proposed by Maritime City Co., Ltd. valued at USD $164.4 million has been approved by the Council for the Development of Cambodia – while sites by Novotel and Marriott have already been secured.
  • Young Entrepreneurs Association of Cambodia released a new Sihanoukville investment guide, labelling the area the “engine and dragon head” of the Kingdom’s growth.
  • AEON MALL (CAMBODIA) CO., LTD. are developing the country’s first multifunctional logistics centre in Sihanoukville.

Bay of Lights

A massive development in Ream, called the Bay of Lights by Canopy Sands Development, covers 934 hectares and is set to be another important economic driver if their lofty ambitions come to fruition. The early estimates are that this mammoth development would last for decades (up to 25 years) and has a total projected investment value of USD $20 billion!

The Bay of Light development hinges on six key pillars:

  • Offering varied entertainment and lifestyle options
  • Education
  • Tourism
  • Financial Services
  • Health & Wellness
  • Arts & Culture

Bay of Lights Sihanoukville

This all-encompassing city would include a marina, golf courses, luxury resorts, shopping malls, condos, universities & international schools, medical centres and a new financial hub. The development expects to create over 300,000 jobs and build 40,000 residential units by 2050.

To attract tourists and to cater to people in the area, a number of attractions are under development due for completion in 2023-2024; a beach club, beachside cabin hotel, a go-kart track, bungee rides, paintball, as well as a golf course and a driving range.

Phnom Penh-Sihanoukville Expressway (PPSHV) Opens Up Economic and Tourist Corridor

The expressway which opened in the second half of 2022 has seen the road journey travel time from the coastal city to the capital be reduced to two hours from anything between 4-6 hours previously.

The PPSHV Expressway will provide a significant boost to economic growth and tourism development –  imagine flying into the capital or to Sihakoukville and travelling to the other destination within a couple of hours. In logistics and commerce, container trucks would take 1-2 days to travel between the two economic hubs but now travel two or three times per day, suggested one report.

PPSHV Expressway Cambodia

To date, it’s the biggest single project under the Belt and Road Initiative cooperation between Cambodia and China and it took three years to complete at a cost of USS $2 billion. But two more expressways are being studied, which will further interconnect key hubs in the Kingdom

There has also been a smart push to digitalise the payment process when using expressways to make it more efficient and cashless. Canadia Bank and ABA​ Mobile​ app​ users​ can use digital payment solutions to pay for the toll – the top-up service using car plate numbers and paid via the apps means there is no need to stop and the toll fee will then be automatically deducted (although how useful this is for international visitors or if it’s used by the transport companies is unclear).

With a strong GDP forecast for Cambodia by many leading international monetary organisations (IMF, ADB & World Bank) in 2023, the rising skilled young population with increased expendable income, combined with the country being seen as an increasingly attractive investment destination and significant infrastructure projects underway – it might be time to consider the long term opportunities in Sihanoukville realistically, as well as its potential to match its hype which has thus far proved to be elusive.