Strengths

• Historical attractions: Not only the Angkor Wat complex, but also other sites around Cambodia rank among world scale attractions and form a unique strength for Cambodia tourism.

• Natural beauty: Cambodia has many

• Strengths in terms of natural attractions, including mountain. River, seacoast and forest areas.

• Good location: Cambodia is well located, with ease of access to Bangkok, Kuala Lumpur, Singapore and Hong Kong, offering a base for extended tourism trips. 

• Ability to attract "add-on" trips: With massive tourist arrivals in key regional centers, it would be easy to have side trips to Siem Reap, Phnom Penh or Sihanoukville areas, without having to bring tourists all the way from countries of origin.

• Novelty value: In the earlier years, Cambodia can still benefit from novelty quality, as few people have visited in the past. This is a short-term strength, but can be utilized for two or three years.

• Social attitudes: There is no hostility to foreigners, and, contrariwise, rather positive human relations,  which can benefit tourism. 

• Bureaucratic simplicity: Unlike some countries, and unlike some other aspects of business in Cambodia, tourism visits to Cambodia are fairly simple to arrange, with visas available on arrival, requiring few formalities.

Weaknesses

• International perception: Cambodia does not have a good image internationally, and this may deter both investment and tourist arrivals.

• Infrastructure: Infrastructure is very poor, and cannot sustain large numbers of tourists. These short coming include airport, local transport, facilities at tourist sites, and not much development.

• Human resource development: There are few trained people in the tourism industry, so there is heavy reliance on foreign labour, which is expensive.  

• Aviation confusion: Cambodia has a chaotic aviation situation, with Royal Air Cambodige unable to provide adequate domestic or international facilities while other domestic airlines are being set up, which could create safety hazards.

• Industry organization: Industry groupings are weak and unrepresentative. These include hotels, travel agents and lack of a general Travel and Tourism Industry Association.

• Worsening situation: With already inadequate facilities, the situation is worsening as tourist arrivals grow rapidly. It is impossible for supply to catch up with demand.

• Under-funded Tourism Ministry: The Ministry of Tourism is under-funded, especially as far as the promotional budget is concerned and has no strong influence on budgetary commitment.

• Transparency problems: Land title issues and ownership rights over tourism facilities create difficulties for development.

• Health and Safety: Health facilities are poor and inadequate to meet the needs of sudden emergencies. Safety concerns are a major consideration both in urban and more remote areas.

Opportunities

• Up-market tourism: At Cambodia's stage of development, there are opportunities to reach up-market segments for small groups of high-priced tourists.

• Eco tourism: Cambodia offers good scope for tourism linked to environment, forest reservations, and natural resource-based destinations.

• Niche marketing: there are several niche area opportunities, including French-speaking market sourcing, historical and archeological groups.

• Development of multi-destination tourism: Cambodia may readily be made part of a tourism package also taking in Bangkok and Ho Chi Minh City. Restoration of overland road and rail links can offer good scope for road and rail tourism, both for high- spending and also for mass tourism groups.

• Beach and river development: Beach tourism for international visitors hardly exists in Cambodia, and river travel is limited. Both offer great scope for development.

Challenges

• Land-ownership: Many projects can be delayed or frustrated by land ownership, as there is lack of clarity in this issue.

• Financing: It is very difficult to obtain finance for projects in Cambodia, adding to delays and escalating costs.

• Human resource development: Project developers find that they cannot access trained personnel, and there are also few facilities for training in tourism-related occupations. 

• Regular supply sourcing: Tourism requires a wide variety o f supplies, and it is difficult to source reliably in Cambodia.

Expectations

• Tourism industry growth: There is confidence that tourist arrivals will grow in double over the coming years.

• Stable environment: There is general confidence that the overall economy will grow satisfactorily, and the political environment will remain stable.

• Land travel development: There is confidence that overland routes will be developed both from Thailand and from Vietnam, enabling substantial regional movement of visitors.

• Infrastructure: It is anticipated that funding for roads and other facilities will not be available from public sources so these will have to be funded from private projects, with collection of fees or tolls.

Concerns

• Legal security: The legal infrastructure is neither developed nor enforced; creating uncertainties and holding back project commitment.

• Physical security: Cambodia is not sage or secure enough for visitors to feel at ease, and there is no sign that the government is in a position to ensure such security any time soon.

• Government support: It is nor clear whether government is fully committed to developing the tourist industry, either by allocating funding or legislative action. Corruption: Existence of corruption in the tourism sector is a concern as much as in other sectors of the economy. 

Action

• Infrastructure prioritization: Basic infrastructure needs to be provided at Angkor Wat, upgrading of 154 kilometers road from Siem Reap to the Thai border.

• Training facilities: Large numbers of tourism-related staff need to be trained, and a training school needs to be set up, potentially funded jointly by government and industry.

• Improved industry representation: Representative associations need to be set up to cover all aspects of tourism in Cambodia, to advise, evaluate requirements, and take action.

• Visa issue: More rapid visa issue, both overseas and at airports, is necessary. For ASEAN visitors, mutual abrogation of visa requirements should be considered.

• Tourism Ministry Funding: The Ministry of Tourism needs more adequate funding to achieve its promotional and organizational obligations. This may need to include subsidies from industry revenues.

Strategies

• Joint action: Cambodia cannot rely on foreign aid or loans, so must develop joint public / private sector funding devices to promote industry-wide facilities.

• Use new technologies: Limited budgets mean that new low-cost devices need to be used, particularly Internet web sites for promotion, information and training purposes.

Manufacturing and export

• Labour costs: Low labour costs a major attraction, especially for those industries where labour cost is a significant part of total cost.

• Flexible government attitudes: In contrast to experience in infrastructure, government appears willing to minimize bureaucracy and facilitate investor entry into manufacturing.

• Tax incentives: Tax incentives offered to promoted industries are perceived to be attractive.

• Work ethic: Cambodia are considered as willing to work hard, at all levels from lowest through middle management to the topmost levels.

• Raw material availability: Cambodia can offer a range of locally available raw materials, including rubber, timber, agricultural products, river and sea fish, and minerals.

• Lack of local market competition: At the present time, there is relatively little competition in the local manufacturing environment, offering scope for market entry.

Weaknesses

• Small domestic market: Cambodia's small eleven, million population size, mostly in rural areas with limited access to markets, narrows the potential for manufacturing for the domestic market.

• Infrastructure shortcomings: Telecommunications are unreliable and expensive, electric power is sporadic and transport facilities are inadequate.

• Raw material availability: Many raw materials have to be imported, while unreliable local stock maintenance may mean that manufacturers have to bear stock carrying costs.

• Credit and finance: Finance is not generally available and many suppliers cannot offer credit.

• Customs clearance: Many experience difficulty in customs clearance on outgoing cargoes, while imports can be similarly affected.

• Lack of technical standards and services: There are no providers of quality assurance standards, a lack of technical services and other general services, many of which have to be provided from offshore, therefore expensively.

• Labour skills: Although there is large and increasing unskilled labour force available, skilled workers are not locally available in adequate numbers.

• Uncertain labour relations: Labour relations Labour law interpretation and increasing disputes have created uncertainties among employers regarding availability of labour.

• Public / private sector consultation: There is a sentiment of lack of coordination in relations between government and the private sector, with uncertainty over imposition and implementation of new regulations.

Opportunities

• Labour intensive export production: Basic industries such as garments and shoes, together with backward integration into component supply, offer potential opportunities, including relocation of industries from neighboring countries.

• Agro-industry: Canning and dry packaging of agro-products offer scope for value-added for Cambodian resources, which are now exported as commodities.

• Labour market can be a testing ground for export: Despite the limited local market, assembly of household electrical goods could prepare the way for export of such products to regional market.

• Labour export: Many countries in ASEAN have development a skilled labour force domestically by means of sending unskilled workers overseas for employment and thereby gaining raining. This may be possible for Cambodia.

Challenges

• Competitive environment: Cambodia is entering the manufacturing market at a time when many other regional and worldwide countries are already gearing-up for low cost manufacturing for export. It will be necessary, therefore, to concentrate on specific niche areas where they may gain some competitive advantage.

• Perception of Cambodia: Generally, Cambodia is not perceived as an ideal location for manufacturing, because of poor security, bad infrastructure, inadequate transport access and other issues. Only by showing cases of successful project achievement can this perception be changed.

Expectations

• Workforce expansion: Since the workforce will continue expanding each year, it is expected that there will be continuing availability of labour at competitive prices.

• Enforcement of legal and regulatory environment: The present environment being less than ideal, the expectations are that the government will act to create an environment encouraging new investment, while promoting harmonious relations in the workplace.

Concerns

• Education and labour skills: The basic educational attainment levels are poor, and the education system is itself poorly equipped to develop basic or specialized skills. Therefore it is unlikely that the present situation will improve, and it may even deteriorate.

• Political interference in the labour process: There has, in the past, been labour activism as part of political opposition. This could harm labour relations and prejudice investment.

• Import duties on equipment: To encourage investment, any import duties on equipment need to be low, and second hand equipment should also be allowed into Cambodia with low duties. It is not clear whether this  will happen.

Action

• Import duty review: It will be necessary to review import duties, reducing or eliminating those on intermediate products and manufacturing equipment.

• Encourage basic, lower technology industries: High tech industries are unlikely to prosper in Cambodia at the present stage of development. Investment policies should emphasize relocation of lower technology industrial installations.

• Planned labour export: While labour export can alleviate unemployment and result in repatriation of earnings, this should be done on a planned basis, making possible the learning of skill that can later be used at home.

• Industrial parks and zones: Given the difficulties and delays involved in establishing independently located factories, industrial parks, with all basic facilities provided, should be a priority. These should be able to supply both the export and domestic markets.

• Second-hand equipment encouragement: Since use of second-hand equipment may lower costs of manufacture, use should be encouraged not penalized.

• Market information: Information needs to be made available, both abut Cambodia as an industrial location but also about world market demand and conditions, the letter for the benefit of Cambodian manufacturers.

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