VZCZCXRO7226
PP RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHPF #0957 3381035
ZNR UUUUU ZZH
P 031035Z DEC 08
FM AMEMBASSY PHNOM PENH
TO RUEHC/SECSTATE WASHDC PRIORITY 0163
INFO RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS PHNOM PENH 000957 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EFIN EINV ETRD CB
SUBJECT: TURMOIL AT THAILAND'S AIRPORT IMPACTS CAMBODIAN 
ECONOMY 
 
REF: PHNOM PENH 934 
 
SENSITIVE BUT UNCLASSIFIED 
 
¶1. (SBU) Summary:  The suspension of flights from Bangkok's 
Suvarnabhumi airport has had an immediate impact on 
Cambodia's vulnerable tourism industry and disrupted air 
cargo exports.  Many here fear further fallout from 
Thailand's political woes, which could discourage many would 
be travelers from visiting both Thailand and Cambodia in the 
months to come and exacerbate the already weakening tourist 
industry. End Summary. 
 
Airport Closure a Headache for Tourism 
-------------------------------------- 
 
¶2. (SBU) The closure of Thailand's main international airport 
has hurt an already slowing tourism industry, which due the 
impacts of the global economic crisis is expected to grow at 
10 percent in 2008, down from the 20 percent growth enjoyed 
in recent years (reftel.)  In 2007, 2,015,128 foreign 
tourists visited Cambodia, generating USD 1.4 billion in 
tourist receipts.  Since the November 26 suspension of 
flights from Bangkok, tourist arrivals are down.  According 
to Luu Meng, President of the Cambodia Hotel Association, 
approximately 1,320 tourists usually arrive daily from 
Bangkok, which is about thirty percent of total arrivals.  In 
2007, tourists on average spent USD 694 during their stay. 
The Minister of Tourism is quoted in the local press stating 
this year the average amount spent by tourists in Cambodia is 
expected to rise to USD 770.  Based on this estimate, we 
calculate that as much as USD 1,016,400 could be lost for 
every day flights with Bangkok are suspended. 
 
¶3. (SBU) Many of the domestic service travelers in Cambodia 
(mainly Siem Reap - Phnom Penh) arrive in Bangkok from Europe 
and then proceed to Cambodia.  With the crucial Bangkok - 
Siem Reap and Bangkok - Phnom Penh routes suspended, there 
are fewer travelers in Cambodia's skies.  However, some 
tourists are still finding their way into Cambodia.  With 
flights suspended, some tourist have opted for overland 
routes.  Cambodian immigration officials at two major 
Thai-Cambodia border crossings report that the number of 
foreign visitors arriving by land since the airport closure 
has increased by about 150 people at Koh Kong and as munch as 
500 to 600 people at Poipet. 
 
¶5. (U) While European tourists comprise a sizable amount of 
foreign visitors to Cambodia (France and the UK alone 
accounted for 8.64 percent in 2007), Asian tourists are by 
far the largest group.  In the first eight months of the 
year, visitors from South Korea, Vietnam, Japan, and China 
accounted for approximately 38 percent of total foreign 
visitors.  Their traditional routes for accessing Cambodia 
(from Korea or Vietnam) remain unaffected by the turmoil in 
Thailand.  Thirty-four percent of all tourists arrive from 
Vietnam, according to Luu Meng. 
 
Exports Disrupted 
----------------- 
 
¶6. (SBU) The airport closure has also affected the export of 
goods to Thailand.  Twenty-five percent of total air cargo 
shipments are routed to or through Thailand.  Eighty to 
eighty-five percent of these exports are garments.  According 
to Sin Chanty, Secretary General of Cambodia's Freight 
Forwarder Association (CAMFA), an average 50 to 60 tons of 
goods are exported by air to Thailand each day, whereas 40 
tons are imported from Thailand.  Based on a calculation 
including costs, insurance, and freight, Sin Chanty estimates 
that USD 200,000 to 300,000 is lost each day due to the 
suspended flights.  While air cargo transporting firms are 
exploring alternative routes for shipping more goods to their 
final destinations (such as through Malaysia, Hong Kong, 
Taiwan, and Singapore), Niwat Neonan confirmed that Bangkok 
Airways air cargo flights had nonetheless resumed between 
Phnom Penh and Bangkok December 3.  He stated that Bangkok 
Airways passenger flights are expected to resume December 4 
or 5. 
 
¶7. (SBU) Comment:  The full extent of the impact of the 
closure of Bangkok's main airport on Cambodia's economy is 
still difficult to quantify.  The disruption in air services 
to Cambodia comes at an already precarious time for 
Cambodia's vital tourism industry.  Only time will tell 
whether Thailand's continuing political instability and the 
anticipated reduction in tourists visiting Thailand will 
result in even fewer travelers to Cambodia from this key 
destination. 
 
RODLEY