Programs & Events
Paying High Commissions Are Not Good for Tourism in Cambodia
By Mr. Neth Pheaktra, Samnei Thmei and editor-in-chief of The Mekong Times
5th place in CCJ/US Embassy 2008 Investigative Reporting Competition
(Prize: $300)
Tourism is one of the six priority sectors for the Royal Government of Cambodia s for national economy development. In 2005, tourism in Cambodia earned about $1,078 billion or 10% of GDP and provided employment to 200 000 Cambodians. Since 1998, the number of foreign tourists in Cambodia has been increasing. Excessively high commissions given by shop and hotel owners to those who lead tourists to buy things in their shops has affected the image of tourism in Cambodia. Too high commissions have raised price charged by shop owners making some tourists think twice before deciding to come to Cambodia. Non-transparent competition, selfishness, lack of tourism law and poor law enforcement by authorities concerned have caused some tourism operators to increase their fees and prices and not think about sustainable tourism. If there is no proper management of commission issue, Cambodia will risk becoming a "commission country."
There are many tourism service providers in Siem Reap province. They are competing for client tourists and use different approaches to have more clients. One of the approaches is provision of high commission to those who lead clients to their places. Suon Dara, Thai language tour guide, said, " Hotels and guesthouses owners will give 30% commission if we have negotiated with them in advance, but will give only 15% commission if we have no prior negotiation with them. For one buffet, if a restaurant charges a tourist $12, it will pay $6 commission. If it charges $15 from a tourist, it will pay $7 commission. But there are also some restaurants who pay small commissions or no commission at all. For example, a restaurant in P'sar Chah area just gives free meal instead of commission.
This tour guide also said, "Souvenir shop or newly created shops will give commissions up to 50% of the price of goods bought by clients. But many shops give only 15% commissions. Souvenir shops in Psar Chah area and Psar Kandal area give small or no commissions at all. Shop owners note what tourists come really to buy and what tourists come just to window shop."
So Chey, English language tours guide in Angkor area, said, "Most tourists have no idea about commissions of 30% or 50%. A camera battery that is worth $1 can be sold at $7 to tourist. I have told tourists that in Cambodia, the Government does not regulate prices. Tour guides do not like tourists who do not buy lots of things in souvenir shops. One ticket for a boat trip on Tonle Sap lake costs $7 but it can be inflated up to $20. Prostitution is more organized. A female sex worker charges only $15-$20 for one sex, but pimp may charge up to $100 or $200 from a Japanese tourist for taking a girl to his place for sex. One sex at the pimp's place costs about $20 for a foreigner and from $3 to $5 for a Cambodian."
Tour guide share commissions with driver but sometimes do not. One hotel owner who asked not to be name said, "Giving commission is a common practice; otherwise, we will not have guests. I have to pay 30% of hotel charge to moto taxi drivers, taxi drivers and tour guides who bring guests to my hotel. So I have to increase my hotel rates. They make lots of money from commissions. They are better than me since they do not have to spend to build hotel and pay for utilities. Competition in doing business in Cambodia has no transparency. Those who have less money are likely to lose."
Mr. Moeng Son, owner of Phum Domnak Angkor Hotel, has this problem. He said, "I pay only 10% commissions, which is smaller than commissions paid by others, that is why I have fewer guests than those who pay 30% - 40% commissions."
Accusations around Commissions
Mr. Ho Vandy, President of Cambodian Tourism Agencies, said, "At present, there are problems with tourism service providers. Souvenir shops, tour guides, and drivers try very hard to make tourists buy souvenirs in shops so that they can get more commissions. The more they get, the more they want. This practice is not good for our efforts and hope for the increase of tourist number in the future. What should we do to put an end to this? We should provide education and improve service for tourists. Ministry of Tourism and relevant authorities play important role in this matter."
Mr. Sok Hong, President of Khmer Angkor Tour Guide Association, said, "We can do nothing about bad practices of tour guides who are members of other tour guide associations. In our association, tour guides have better experience, skills and disciplines. We never negotiate commissions; it is up to owners of shops, guesthouse and hotels. Strong competition among hotels, guesthouses, restaurants and souvenir shops make owners of these places provide high commissions to those who lead guests/clients to them. Tour guides alone are not to blame."
Mr. Sok Hong also said, "The Government should intervene to prevent this problem by making sure that same product should be sold at same price. The Ministry of Tourism, who issue business licenses to those shops, should enforce the same product, same price policy by constantly monitoring all shops and ordering them to display price tags on all objects."
Mr. Kim Phally, President of Siem Reap Tourist Transport Association, said, "The problems of commissions and prices charged by souvenir shops have already affected Khmer tourism, but we can do nothing about it now. The Ministry of Tourism should draft tourism law soon for the National Assembly to pass. Without this law, these outlet owners will not listen to authorities and foreign tourists who have bought substandard souvenir objects at unreasonable price will say, 'Angkor Wat temple is magnificent. I should shed tears in front of Angkor Wat, but I will not come back.' This is a great loss to our tourism."
Both Kim Phally and Sok Hong said that the lack of tourism law and communication between business people and authorities caused them to blame each other. Tourism Minister acknowledges that high commissions make owners of hotels, guesthouses and shop to increase charges and this has made tourists unhappy.
Poor People Are the Victims
Vendors increase price of their goods arbitrarily to offset payments for commissions. There are different prices for Cambodians and foreign tourists. Vendors, tour guides, bus and moto taxi drivers think that a foreign tourist comes just one time, so they make the most of it. Mr. Moeng Sun, who is director of Eurasy Tourism Company, said that this would not only increase prices but also affect tourism development in Cambodia as a whole. "Service providers collude and "extort" money from tourists. They do not care about their future. The Government should pay attention to this problem."
The practice of giving high commissions that increases price not only affects the image of tourism in Cambodia but also affects living conditions of poor people in Siem Reap province because of high price of goods. Sopha, a man from Chak commune, said, "I liked a bag and the vendor told me that it cost $10 for a Cambodian like me and $15 for a foreign tourist. But as I learnt later on, the actual price of the bag was only $5."
The Ministry of Tourism said that it had received numerous complaints related to tourism services. Mr. Thorng Khon, Secretary of State, Ministry of Tourism, said, "Some people have licenses for selling agricultural products, but sell jewels instead. This is wrong. What is worse is that some vendors sell substandard or fake jewelries to foreign tourists who filed complaints to us. We are working on this with relevant authorities, especially Siem Reap provincial authorities. This problem looks small but happens on a daily basis. It causes bad words of mouths and can seriously affect our tourism sector."
Nontransparent Competition
Authorities and tourism service providers try to make tourists stay longer than the current average one and a half day. To achieve this objective, Deputy Prime Minister Sok An said, "Prolonging the stay of foreign tourists is the main objective of the Government. Siem Reap is the first entry point and we want to link it to others. Our main focus areas are Siem Reap, Sihanoukville, Northeastern area and Phnom Penh that we will develop."
In any case, the problem of high commissions has made stay in Cambodia expensive, compared to neighboring countries. This way, some tourism operators think that Cambodia would not be able to attract many foreign tourists as expected. Mr. Moeng Sun said, "The lack of tourism law has led to arbitrary practices in giving commissions, those who earn less and provide smaller commissions are at disadvantage. Such nontransparent competition has affected the stability of tourism in Cambodia." He called on the Government to intervene in issue of providing commissions and standardizing price of goods.
Noticing that the number of tourists from Western countries is down and the number of tourists from Asian countries is up, Mr. Lilonel Rekya (?), director of Angkor Handicraft Co., said in workshop, "We want to draw attention of authorities to commission-based competition that has increased the price of goods in Siem Reap province. We have serious concern over this issue."
Beside the above issue, allowing some business people to monopolize in tourism business is another problem, unfair competition. Mr. Ho Vandy said, "To make foreign tourist stay long, competition has to be transparent. Do not turn Cambodia into a commission country.
Concerning management, the Minister said, "Tourism law will be submitted to the Council of Ministers who will forward it to the National Assembly. In the meantime, both local authorities and Ministry of Tourism have no concrete measures to prevent provision of high commissions."
Experience of One Restaurant Owner Did Not Give Commissions
The owner of the restaurant said that his restaurant had been opened for 2 months and had problems related to commissions. "One day, four tourists came to my restaurant with a guide and a driver who demanded commission from me. I asked the tourists whether they came on their own or were led by the guide or driver. The tourists said that they came on their own. They said that they had looked for my restaurant for 3 days, and no one told them. Some people said that my restaurant did not exist. Others said they did not know it. Another case. One day, a tour guide and a driver took a foreign tourist to my restaurant. After he ate, I charged him $6. The driver and tour guide also ate in my restaurant with him. Their meal cost $5, which they said should be the commission for taking a tourist to my restaurant. Where is my profit after commission? At this rate, how can we expect Khmer nationals living abroad to come and invest in Cambodia. Having said this, I don't mean to say that all tour guides and drivers are bad."