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Cambodia’s tourism sector takes a hit from geopolitical tensions and scam hub stigma

PHNOM PENH, Cambodia – Cambodia's vital tourism sector, once a primary engine of economic growth, is facing a severe and protracted downturn as the country grapples with the dual crises of a tarnished international reputation and flaring geopolitical conflict. The industry's contribution to the nation's gross domestic product has fallen to just 9.4% in 2024, a stark decline from 12.1% in 2019, according to ministry data released Monday, signaling a recovery that has not only stalled but reversed.

The once-bustling temples and vibrant cities are now contending with a sharp drop in visitors, particularly from the crucial Asia-Pacific market. The reasons are twofold: a growing stigma as a central hub for sophisticated cybercrime operations and a violent, long-simmering border dispute with neighboring Thailand that erupted into armed conflict through much of 2025.

These challenges have created a perfect storm, deterring travelers and leaving businesses that depend on tourism in a desperate struggle for survival.

The Twin Crises: Scams and Skirmishes

Cambodia's image has been severely damaged by extensive international reporting and official warnings about its role in hosting large-scale scam centers. These compounds, often staffed by victims of human trafficking, engage in global cyber fraud, from romance scams to cryptocurrency schemes.

The issue escalated in June 2025 when the United Nations Office on Drugs and Crime (UNODC) released a damning report. It alleged that profits from these vast illicit operations were tied to members of the country's political elite, creating a crisis of confidence in the government's willingness and ability to tackle the problem.

Compounding the reputational damage is a physical threat. A decades-old border dispute with Thailand reignited into sustained armed clashes throughout 2025. A ceasefire brokered in June 2025 proved fragile, with fighting erupting again in early December before a more comprehensive agreement was reached on Dec. 27, 2025. The conflict led to widespread travel cancellations and advisories, creating a no-go zone perception for many would-be tourists.

The impact is palpable at landmarks like Angkor Wat. The centuries-old temple complex in Siem Reap, typically thronged with international visitors, was described as unusually quiet during the peak season in December, a direct result of cancellations stemming from the conflict.

The Numbers Tell the Story

The statistical data paints a grim picture of the tourism sector's health, with the Asia-Pacific region, traditionally Cambodia's tourism lifeblood, leading the decline.

Dwindling APAC Travelers

The fallout from the country's security and reputational issues has been most acute among its regional neighbors. "The scam center issue resonates a lot more in East Asia, people hear about it a lot more," noted Stephen Higgins, managing partner at Mekong Strategic Capital. "People in the U.S. and Europe hear less about the scam centers."

• Regional Impact: Overall tourism from the Asia-Pacific region plummeted by a staggering 20% year-on-year in 2025, according to the tourism ministry. This decline represents a significant loss of revenue and market share.

• Neighboring Fallout: Visitors from Thailand, a key adjacent market, saw the most dramatic decline. Arrivals fell by over 50% in 2025, a direct consequence of the sustained border conflict and heightened national tensions.

• Safety Concerns: South Korean arrivals plunged 20.6% after Seoul took drastic action in October 2025. The South Korean government imposed its most severe, tier-four travel warning, effectively banning travel to Cambodian regions "where employment fraud and detention have surged." This move followed the tragic death of a South Korean student who was allegedly lured into a scam compound and tortured.

China's Complex Role: A Partial Rebound with Pressure

While most regional tourism cratered, arrivals from China provided a lone bright spot, though one shrouded in complexity.

Chinese travelers to Cambodia bucked the trend, rising 41.5% in December 2025. However, this rebound is deceptive. The total number of Chinese visitors remains less than half of pre-pandemic levels, a major blow to a sector that had come to rely heavily on this market.

According to a report from the ASEAN+3 Macroeconomic Research Office (AMRO) last August, China is one of the most critical sources of high-spending tourists for Cambodia. The failure to recapture this demographic has significant economic consequences, even as raw arrival numbers show some growth.

Furthermore, this partial recovery comes with immense political pressure. Beijing has become increasingly vocal about the scam hub issue. In a WeChat post in January, the Chinese embassy in Cambodia explicitly stated that it has been pressuring Phnom Penh to crack down on the cybercrime syndicates. The embassy warned that Cambodia's reputation as a "scam haven" risked doing serious damage to bilateral relations between the two "ironclad" partners.

The Path to Recovery

For Cambodia, the road ahead is fraught with challenges that extend beyond typical tourism marketing campaigns. The core issues of security, rule of law, and international trust must be addressed to lay the groundwork for any meaningful recovery.

Implications and Next Steps

The immediate priority for the Cambodian government is to demonstrate a credible and transparent effort to dismantle the scam networks operating within its borders. This involves not only raids and arrests but also addressing the high-level corruption that enables these operations to flourish.

Simultaneously, maintaining the ceasefire with Thailand and pursuing diplomatic de-escalation is paramount. Lasting peace along the border is a prerequisite for restoring confidence among tourists and tour operators, particularly from Thailand itself.

Failure to act decisively on these fronts will likely lead to a continued erosion of the tourism sector, resulting in further job losses, a decline in foreign currency reserves, and deeper economic malaise. The future of one of Cambodia's most important economic pillars now hinges on its government's ability to restore stability and rebuild a reputation that has been dangerously compromised.