Competition between Sihanoukville and the Vietnamese island of Phu Quoc for a share of the fattening tourism pie is set to intensify, analysts say, with Vietnam Airlines and the Vietnamese government this week announcing a concerted effort to direct tourists to the island.

In a statement issued June 14, Vietnam Airlines announced it will commence operating direct flights three times per week between Siem Reap and Phu Quoc from November 1.

“The next year, increasing the frequency of the above routes will be based on market conditions,” the statement said, adding that the island destination is a key focus of Vietnam’s tourism strategy.

The company did not detail how much a one-way or return ticket would cost for the new route.

Vietnam Airlines’ new flights stand to further enhance Vietnam Airlines' hold over Cambodia’s aviation market, with the firm already owning a 49 per cent stake in the Kingdom’s only domestic airline, Cambodia Angkor Air.

Phu Quoc Airport, which began welcoming domestic flights in December after a four-year construction period, is located some 50 kilometers from Sihanoukville.

The island is also the only destination in Vietnam that does not require tourists to have a visa.
In response to Vietnam Airlines’ announcement, Brendan Sobie, chief analyst and Singapore representative at the Australian-based Centre for Aviation (CAPA) said the new connectivity could detract tourists from Cambodia’s own coastal hot spot, Sihanoukville.

“Cambodia has been keen to attract more regular domestic services at Sihanoukville as well as international services as part of an effort to boost its tourism sector and attract Siem Reap visitors to stay in Cambodia rather than hop over to Thailand or Vietnam,” he said.

“Vietnam Airlines' investment in a Phu Quoc-Siem Reap link, rather than a new route at Sihanoukville through its Cambodian joint venture may end up ruffling feathers. But the reality is Sihanoukville has even bigger infrastructure challenges than Phu Quoc.”

Sihanoukville Airport is slated for renovation along with the country’s two other major airports in Phnom Penh and Siem Reap. But construction has yet to begin and air passenger numbers remain sluggish in the coastal town.

In 2013, a total of 20,000 passengers flew between Siem Reap and Sihanoukville airports, according to Cambodia Airports data. That figure is on the rise with the coastal airport already welcoming more than 24,000 visitors to June this year – a increase of 146 per cent on the same period last year.

But Sihanoukville’s recent gains remain dwarfed by its Vietnamese island neighbour. According to Vietnam Airlines’ June 14 statement, more than 700,000 domestic Vietnamese passengers arrived and departed through Phu Quoc Airport during 2013. So far this year, more than 449,000 have travelled through the new port entry.

Norinda Khek, spokesman for Cambodia Airports said competition is common in the aviation sector, especially when it comes to similar tourism destinations, and admitted that action is needed to ensure Sihanoukville’s future tourism trade.

“It is therefore up to all stakeholders of the Cambodian tourism industry and the royal government to step up efforts in making Sihanoukville an attractive destination out of its huge untapped opportunities," he said.

The spokesman’s call for more private and public sector attention on Sihanoukville was hailed by Ho Vandy, co-chair of the Private-Public Tourism Sector Working Group.

Vandy called on the government to consider introducing a visa-free policy similar to Vietnam, and provide incentives to the tourism and aviation sector to invest in Sihanoukville’s infrastructure development.

“If our government is smart, they would think about this,” he said, adding that members of the commercial tourism sector had previously recommended scrapping compulsory visas for all tourists travelling to Cambodia.

“The Vietnamese government was smart to introduce a visa-free zone. We would also like to see new plans, marketing, promotion and policy to help the private sector and to foster new planning and development to attract the tourists from Siem Reap.”

On the same day as the airline’s announcement, Vietnam’s Transport Minister, Dinh La Thang, called on the Civil Aviation Authority of Vietnam (CAAV) to meet with the State Secretariat of Civil Aviation of Cambodia (CAC) to discuss new flight routes expediting travel from Hanoi to Ho Chi Minh and then onto Phu Quoc.

According to Thang, Vietnam stands to save $300 million in fuel costs per year if the CAC and the Lao government agree to allow Vietnamese airlines to fly directly through both countries’ airspace en route to southern tourist destinations, rather than taking the loner route around within Vietnamese airspace.

“We are planning to negotiate with Lao and Cambodian agencies on reducing the transit fees this August so we can design a nonstop Hanoi-HCM City route,” he was quoted as saying in Vietnamese media reports.

Kao Sivorn, director general of operations for the CAC, confirmed the meeting and that Cambodia could capitalise off such a route change.

“Cambodian air space.....


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