Editorial content

Cambodia Coast
Updated on: September 6, 2023, 1:48 a.m.
Published on: August 6, 2023, 4:52 a.m.

Coastal Development Of Cambodia - Key Economic and Tourism Drivers

Cambodia is blessed to have many development and infrastructure projects running concurrently, and the prized coastline and the islands that lie off the Gulf of Thailand in Cambodia's territorial waters are drivers for long-term tourism and hospitality growth, as well as the economic prosperity of the Kingdom. 

However, there needs to be a fine balance between granting development concessions and maintaining the natural beauty of the coast and the islands which ultimately promises greater investment in the tourism and real estate markets.

Cambodian Economic Outlook 2023-2024

Cambodia’s economy is still expected to grow at an estimated 5.5-5.6 per cent in 2023 which far outstrips the global outlook. Global growth is projected to fall from an estimated 3.5 per cent in 2022 to 3.0 per cent in 2023 and 2024, according to the International Monetary Fund (IMF).

  • The National Bank of Cambodia recently slightly revised its growth forecast of Cambodia to 5.5 per cent in 2023. GDP growth in 2024 is estimated at 6.6 per cent.
  • Growth in emerging markets and developing economies is expected to be 4.1 per cent in 2023 - so even among its competitive frontier-market piers - Cambodia is leading the race.
  • The tourism sector is expected to experience healthy growth - Asian Development Outlook April 2023 report projects 7.3 per cent growth in 2023 before easing to 6.8 per cent in 2024.
  • Cambodia attracted fixed-asset investment projects worth USD $1.1 billion in the first half of 2023 and a total FDI worth $45.8 billion! 

In the first six months of 2023, Cambodia hosted 2.57 million international visitors - this is over a 400 per cent increase from the same period in 2022. The most visited destinations in the Kingdom were Preah Sihanouk coastal province, followed by Battambang province, Phnom Penh, the coastal province of Kampot, Siem Reap, and Kandal province.

Cambodian Economic Outlook 2023

Pentagon Strategy Phase I - Government Legacy

With new leadership in the newly elected Cambodian government taking the helm, following the news that Prime Minister Hun Sen would be stepping down, it has been made clear every effort will be made to have a seamless transition with younger political alumni to take Cambodia into the future.

At the core of these succession plans is the Pentagon Strategy Phase I which is meant to concentrate on seven key areas of Cambodia’s economic development.

The plan is not a complete shakeup of current economic drivers and strategic plans but rather cements the focus of the next five years on achieving the goals for Cambodia’ to become an upper-middle-income economy by 2030, and an even more ambitious plan to be a high-income economy by 2050.

The key drivers of the Pentagon Strategy Phase include:

  • Enhancement of governance and institutional capacities
  • Creation of favourable socio-economic development conditions
  • Development of human resources - private and labour development
  • Diversification of the economy and strengthening competitiveness
  • Sustainability and inclusion and development of digital economy and society

Kep - From Sleepy Town To Major Developments

Kep has already seen some fundamental changes over recent years and there are some major development projects reshaping the coastal town to try and revitalise the area and establish it as an alternative international tourist destination in Cambodia - although it has long been a holiday retreat for Cambodians and expats alike.

Popular Kep National Park (which had a new road constructed through it), the Phnom Kampong Trach Caves, and the nearby nature reserve all remain popular attractions.

Koh Tonsay Rabbit Island Port

New Kep Beach & Kep West

For those familiar with the man-made extended beach near Knai Bang Chatt, the area is part of a newly transformed “Kep West”, which is really trying to target affluent travellers and holidaymakers (domestic and international).

The newly widened beachfront and the addition of the Royal Kep Yacht Club (RKYC) are new attractions. While the original beach was 350 meters long, it has been expanded into a 2700-meter-long public beach. This is the early stages of a new masterplan for Kep which could see the area transformed and targeting a specific affluent market.

Koh Tonsay Rabbit Island Port & Development

In terms of water access, the southern water corridor is being opened up via local ports which plans to offer direct routes to Phú Quốc (Vietnam) and international tourism, as well as bolstering domestic tourist access

The port to connect Kep and Rabbit Island is the new Kep-Koh Tonsay Tourism Port which was completed in 2022 and stretches 306 meters long and 68 meters wide. The port can accommodate boats carrying 200 to 300 tourists (due to water depth) and the plans are to make it an international hub to help generate economic growth of the local economy. The port was developed at a cost of USD $18 million.

A USD $130 million development project on Koh Tonsay run by the Try Pheap Group was also granted in 2021 which was planned to include five-star hotels, commercial zones, casinos, bungalows, public places and transportation such as a cable car - all over 140 hectares. Rabbit Island is located about 4.5km southeast of Kep town.

Kep Coastal Roads

The Cambodian government is looking for massive investment in the Kep area as well as developing improved transport links. Road Number 3 was completed, while Roads 31 and 33 are being refurbished and the installation of cycling and walking lanes along the coast will help promote the area in terms of tourism. 

The Kep coastal road spans 12.75 kilometres, connecting the Rabbit Island Port to Angkol Beach and was constructed with a USD $10.5 million loan from the Asian Development Bank.

Kep Satellite City

In Q2 2023, the plans for the development of a satellite city project in Kep run by real estate tycoon Khun Sear's company, covering a total area of 1,467 hectares in Sangkat Kep, Kep City, and Pong Teuk Commune, as well as Ang Kol Commune in Damnak Chang Eur District was approved.

Koh Tonsay Rabbit Island

Other Cambodian Island Development Projects

In late 2022, Koh Tbal Island (Mortar Island), which is located 1.3km southeast of Koh Tonsay Island, was also earmarked for major development as the Duke Try Pheap Company would develop it into a natural tourist area (it's part of the Try Pheap Group), investing USD $17 million.

In September 2022, SAMANEA CO., LTD was also allowed to invest in tourism development projects on three islands in Kep province to the value of USD $18.2 million. The goal is to develop tourism resorts and sites on three islands; Koh Svay, Koh M’tes and Koh Kok

In April 2023, the Cambodian Investment Committee of the Council for the Development of Cambodia also issued licenses to GTVC IMPORT EXPORT CO., LTD “One Island” investment development project. This is located in Sangkat Koh Rong Samloem, Koh Rong City, Sihanoukville Province with an investment capital of approximately $ 7.7 million.

At the same time, DEN NOKOR (CAMBODIA) INVESTMENT CO., LTD Investment project was approved for a tourist resort on Koh Toteung and other related activities located in Koh Sdach village, Koh Kong province. The investment capital was approximately USD $30 million.

Cambodian Port Developments

The Ministry of Economy and Finance, Ministry of Public Works and Transport, and the Ministry of Tourism will co-host an investor seminar on “The Operations and Maintenance of Kampot Tourism Port through the Public-Private Partnerships” on August 17, 2023, in Phnom Penh and have invited local, regional, international port, and tourism ferry operators and other interested private investors. The aim is to highlight opportunities in developing coastal tourism in Kampot and Kep provinces and connecting sea tourism in Cambodia with Phu Quoc as well as the chain of other islands within the region, said an official release.

Kampot Tourism Port was built under an ADB loan of more than $18 million but needs investment to be operational but is hoped that it will serve as a gateway for cruise ships connecting Thailand and Vietnam to Kampot.

Here is a reminder of some of the key infrastructure projects including ports in Cambodia that we have covered before. 

The USD $300 million construction of the international airport on Koh Rong Island (with investment from The Royal Group Koh Rong Development Company, a subsidiary of the Royal Group Co., Ltd.,) also got underway earlier in 2023 and is expected to be completed in 2027/8.

There have already been Thai and Singaporean delegations shown around the key investment hotspots in the Kingdom in 2023, with another Chinese investor delegation planned for later this year.

As ferries, planes (including Samra Seaplanes with the venture set to be operational in 2023), rail networks and expressways make it easier for tourists to reach the coast and island-hop to their hearts and budgets desire, the Cambodian coast will continue to attract investment - but how sustainable development projects align with economic prosperity remains to be seen.