Introduction
Tourism in Siem Reap has been developing over the years due to their
attraction which is Angkor Wat and the surrounding temples of Angkor.
Although tourism has helped to develop the economy of Cambodia, it has
also brought negative impacts onto the country in terms of tourism
sustainabilty, culture as well as socio-economy.
This report is to cover five project scopes which are:
1. PESTLE analysis of Siem Reap’s tourism industry
2. Performance evaluation of Cambodia’s hospitality product
3. Sustainable tourism of Cambodia
4. Impacts of globalisation on Cambodia’s hospitality and tourism
industry
5. Harmonisation between tourism and the culture, religion and socio-
economy of the local commnuity
A research trip to Cambodia was organised on the 11th to the 14th of
February 2011 for the purpose of gathering information for this project.
Information regarding the project was gathered through an interview with
the Revenue Manager of Le Meridien Angkor, conversations with the tour
guide as well as observation.
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Executive Summary
In relation to PESTLE analysis, the government is pro-business,
prioritising land for the development of business and encourages the entry of
international companies. However, the technology of Siem Reap is
insufficient to support the needs of the international hotel chains with the
Internet service being insufficient to allow connection to the hotel chain’s
server as well as the electrical grid of the country being unable to support
the demands of the larger industries.
In relation to the performance evaluation, the mid-scale and budget
accommodations are performing to the satisfaction of the tourists. However,
there are some limitations to the actual reflection of the performance of the
hospitality products.
Although preservation and restoration efforts are in place, the lenient
enforcement of regulations has led to the damaging of the temples. Also,
poor environmental management may lead to more damaging effects on
tourism.
Globalisation has changed the socio-economy of Cambodia with locals
moving
from agriculture to the business industries such as retail and hotels and
restaurants.
The tourism industry has also affected the culture, religion and socio-
economy of
the local community with celebration of new cultural events such as
Christmas and New Year’s which was previously not celebrated by the local
community.
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1.0 PESTLE Analysis of Siem Reap
1.1 Political
In the interview with the Revenue Manager of Le Meridien Angkor, Orta
(2011) stated that when the hotel was first built at that time, the
government was open and encouraged the entry of international companies
and chains into the country to develop hotels in order to boost the tourism
sector of the economy. If the company had the finances as well as a feasible
business plan, the government would approve the entry of the international
company into Cambodia. However, one condition to opening in Cambodia
was that the foreign investors cannot fully own the land they operate on in
the country, leading to international companies using joint ventures with
local operators to open up hotels.
The political situation with Thailand at the border has also affected the
industry. For one, Orta (2011) stated that there had been a decrease in
arrivals from Thailand to Le Meridien. However, the industry has not been
heavily affected by the war with Thailand and only the area surrounding the
temple at the border is affected by the fighting. Other areas of Cambodia are
safe for travel.
As the hotels employ Thailand as a supplier for raw materials, the
border war with Thailand may affect the supply of raw materials to the hotels
as Thailand may decide to stop supplying to Cambodia.
1.2 Economical
3
In view of the financial crisis, occupancy for hotels in the area fell by
20% for the same period as the year before due to cancellations of bookings
caused by the financial crisis (Orta, 2011). Orta (2011) further mentioned
that the financial crisis has made it more difficult for hotels to attract single
customers and frequent individual travellers.
The unemployment rate has increase from 2.5% in 2000 to 3.5% in
2007 (Central Intelligence Agency, 2010). This may suggest that there are
more workers available for the hospitality industry to employ.
1.3 Socio-cultural
According to the tour guide, Jet, education levels in Siem Reap are
generally low due to the quality of the national schools and the low level
expenditure provided by the government for education. This may lead to low
skilled workforce who requires training before being competent to work in
the hotels.
Health is also an issue in Cambodia with a lack of adequate sanitation
as well as low accessibility to clean water (UNICEF, 2010). Because of this,
diseases such as HIV/AIDS and malaria affect the local community of
Cambodia and will affect the productivity of the workforce.
1.4 Technological
Orta (2011) stated that the Internet service has improved within the
region of Siem Reap over the years. However, the Internet service quality is
insufficient for the hotel to be able to connect to the hotel chain’s server in
Bangkok which caters to 8 other Starwood Hotels in the region. Thus, Le
Meridien Angkor has had to run its own server in order to cope with their
Internet bookings and other uses.
The electric grid of Siem Reap is also insufficient to cope with the
demands of the hospitality industry (Orta, 2011). This has led to some hotels
to rely on diesel powered stations to generate electricity as the country’s
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own power grid is not sufficient to cope with the demands of large industries.
Another option is to obtain electricity supply from Thailand through
underground cables, which is the case with Le Meridien Angkor.
1.5 Legal
In order to obtain a license to become a tour guide operator, the
applicant must fulfil the requirement of having a high school graduation
certification and must be able to converse in English as well as in the Khmer
language. Furthermore, the license is valid for two years only while the
renewal period for the license is two years. If foreigners such as Japanese or
Koreans were to apply for a Cambodian tour guide license, they would have
to first apply to work with a local tour guide operator and will be required to
undergo the same process of obtaining the license as the locals.
1.6 Environment
Hotels in the Siem Reap area have to be aware of the problem
regarding the water supply. Orta (2011) stated that the underground water
supply within the area was unknown and that hotels have been digging
underground to obtain water. As more hotels build in the area, more water is
being used. Thus, hotels are unsure of the amount of water that is remaining
in the underground sources. There is a possibility that in the short run, hotels
in the area will have to find a new source of water in the event that the
underground water supply finishes.
Due to the usage of diesel powered generator stations for electricity,
pollution has increased as a result. The increase in large organisations
requiring the diesel station for electricity has led to an increase in air
pollution in Siem Reap.
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2.0 Performance Evaluation of Hospitality Products
This area is mainly focus and evaluate on the tourism industry’s
performance in Cambodia, and this evaluation has conducted in one of
Cambodia’s provinces, which it is Siem Reap. The result and conclusion of
this evaluation is mainly based on the answers and results that answered by
the tourists in Siem Reap through the questionnaires that had created earlier
before conducting this evaluation. Total number of questionnaires have
collected during the survey in Siem Reap is 25, and these questionnaires
were answered by different segments of tourists that consist of the groups of
segments mentioned earlier.
The tourists’ questionnaire was divided into three different parts,
personal details such as nationality, age and type of accommodation, the
reasons for tourists to visit Cambodia, and the rating for overall performance
such as transportation, cleanliness or hygiene, safety and security,
entertainment, accommodation and food and beverages outlets. These
segments were used to evaluate the overall performance in the city of Siem
Reap.
6
European Asian Oceania0
2
4
6
8
10
12
14
1614
10
1
Nationality Grouping
Number of participants
20-29 30-39 40-49 50-59 60-690
2
4
6
8
10
12 11
43
43
Age Groups
Number of participants
7
Budget Mid range Luxury0
2
4
6
8
10
12
14
16
18
8
17
0
Accommodation Type of Participants
Number of participants
Based on the data that has collected earlier in Siem Reap, there were
14 Europeans had answer the questionnaire. This number has included
various countries in Europe such as Britain, Denmark, France, Switzerland,
Germany and more. However, there were only 11 Asian tourists answered
the questionnaire in Siem Reap, and they are from countries such as China,
Indonesia, Korea, Vietnam, and New Zealand. The tourists that answered
these questionnaires were mostly backpackers, small groups and couples.
But based on the observation in Siem Reap, Korean and Japanese tourists
have the largest group of tourist amount, however, there was only one
questionnaire answered by one Korean tourist through all groups of Korean
and Japanese tourists, and it is because there was a language barrier during
the survey answer collection with them which they only able to understand
the very minimum of basic English, and this was the limitation for us to
collect the answers and data from these large group of tourist. This survey
were mostly questioned and answered by budget tourists or travelers as
most of them were backpackers or individuals.
Based on the findings and survey in Siem Reap, age group of between
20 to 29 years old was the largest age group during the data collection, and
they were mainly visiting Cambodia for leisure purpose. The age groups that
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follow by the group of 20 to 29 years old is the age group of between 30 to
39 years old and 50 to 59 years, and each of these groups have four tourists
that answered the questionnaires. The least number of age groups are the
groups of age between 40 to 49 years old and 60 to 69 years old. There are
various and different types and groups of tourists in Siem Reap, however,
most of them preferred mid range or three to four stars hotels as their
accommodation during their visit in Siem Reap, which come with the number
of 17 tourists out of 25 tourists, other tourists which are the 8 tourists had
preferred budget or guest houses or one to two stars hotels as their
preferred accommodation during their visit.
Yes No0
2
4
6
8
10
12
14
16
Would You Visit Siem Reap Again?
Number of participants
According to the answers that have collected during the survey in Siem
Reap, 15 of the tourists would like to go back to Cambodia to have second or
more visits, the reason are due to local people’s friendliness and also the
Angkor Wat temples, and most of these tourists are in the group of age in
between 20 to 59 years old. However, the other 10 tourists would not like to
visit to Cambodia or Siem Reap again as it is because there is lack of
entertainment facilities such as night clubs and attractions which are the
younger generation’s main preferences during their vacation to other places.
Another reason to the declined offer to return to Cambodia was that the
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tourists wanted to visit other places around the world. These tourists are in
the group of age 60 years old and above.
Transp
ortation
Cleanlin
essSa
fety
Enter
tainmen
t
Accommodati
on
F&B outle
ts0
0.5
1
1.5
2
2.5
3
3.5
4
4.54
3.04
4.043.72
4.24 4.2
Average Score Rating
Average Score Rating
Based on the ratings that have collected during the survey in Siem
Reap, the performance rating for overall performance in Siem Reap which
included the segments such as transportation, cleanliness, safety,
entertainment, accommodation, and food and beverages outlets, and above
all segments and areas, the area that has highest score in term of the most
happy experience that experienced by the tourists is accommodation, and
the area which has the lowest score, which it also gave bad experience and
impression to tourists is the cleanliness and hygiene of the area.
Transportations for tourists to travel around in Siem Reap is mainly
supported by the local tuk-tuk, due to it is easy to travel around the city and
price for tuk-tuk is very affordable for tourists at the lowest cost of 1 US
Dollar or more for one to another destination. However, the main concern for
tourists is the safety issue with the tuk-tuk. The tuk-tuk which resembles a
trishaw attached to a motorcycle does not have the safety equipment such
as seatbelts such as that of taxis and buses. Also, as roads are less
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developed, the ride may be bumpy and unstable and may not be safe to use
a tuk-tuk to reach the destination. That is one of the reasons why some
tourists in Siem Reap would prefer walking to the destination instead of
taking tuk-tuk.
Based on the answers and ratings that given by the tourists in the
questionnaires, hygiene and cleanliness in the city of Siem Reap is the area
in need of improvement compared to all other areas that has mentioned
earlier, it is because there is no enforcement of having recycle bins or
normal dustbins on the streets in Siem Reap, and there is no proper area or
site which able to let local residents and tourists to dispose their unwanted
stuffs or rubbish, and this has led the people including tourists to dispose
their rubbish along the road side. According to the tour guide, Mr. Jet, the
local government has increase the amount of police in the city of Siem Reap
as it is because of the increase in the number of tourists’ arrival in every
year. Because of this enforcement that has been done by the local
government, the tourists feel safer walking around Siem Reap.
According to Orta (2011), occupancy for the hospitality industry is
estimated to be around 50% every year. This is due to the oversupply of
accommodation facilities in the area. Orta (2011) stated that in his
calculation previously, during the two week peak periods that the industry
experiences, if all incoming flights into Siem Reap were full, the number of
tourists that would arrive in Siem Reap would only be able to create 80%
occupancy for all luxury hotels in the area, not considering the other lower
rated hotels and guest houses that are existent.
3.0 Issues in Tourism Sustainability
One issue pertaining to sustainable tourism is the lack of restrictions as
to how many people can enter into Angkor Wat as well as the other temples
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in the nearby area such as Angkor Thom and the Bayon Temple. There is no
limit as to the number of people who can enter into the area daily to visit the
temples. This has led to other problems pertaining to the preservation of the
temples as well as defacement of the temples walls. Due to the large
numbers of visitors visiting the temple daily, the enforcement of rules and
regulations pertaining to how visitors should dress or behave while visiting
the temples have been lenient.
The large crowds have made it difficult for the enforcement of
regulations such as the prohibition of touching the walls and artwork of the
temples which has led to the artwork of the walls to be discoloured due to
the visitors’ actions of touching the design of the artwork on the walls. Thus,
visitors are not fined or reprimanded by the local authorities when they do
not follow the rules to visiting the temples. It has become difficult for the
local authorities to catch visitors disobeying the rules due to the large
number of tourists that visit daily. The picture above shows an example of
the type of defacement tourists have done to the temple walls due to the
lack of strict enforcement of regulation.
Also, because there are no restrictions to the number of people who
visit the temples, the large crowds entering into the temples daily have also
caused damage to the archaeological sites of Angkor as tourists walk and
climb the sandstone monuments located in Angkor (Sharp, 2008). The influx
12
of tourists to visit the temples has caused extreme pressure on the temples
sandstone monuments, damaging the structure of the temples.
The movement of workforce from rural areas to the city may also affect
the sustainability of tourism. As the young adults move from the rural areas
into the city to find work, they no longer work in the agriculture industry.
This would affect the hospitality industry as the agriculture industry
represents a supporting industry for the organisations in the hospitality
industry in terms of supplying raw materials for food items. As the younger
generation move into the cities and away from the agriculture industry
areas, this leaves the older generation to work for the agriculture industry.
Thus, in the long run, the hospitality industry may no longer to be able to
rely on the local agriculture industry for raw materials as the agriculture
industry may not have the necessary workforce required to help support the
supply demands of the hospitality industry. In an interview with the Revenue
Manager of Le Meridien Angkor, Orta (2011) stated that the hotels as well as
restaurants rely on local suppliers for food materials. Thus, the movement of
workforce from rural areas to cities would affect the continuity of local supply
of raw materials to organisations in the hospitality industry that rely on local
suppliers.
Few hotels are involved in environmental management. For example,
Le Meridien Angkor annually sets targets for reducing their water and
electricity usage and intake. However, most hotels do not undertake
measures to encourage guests to care for the environment such as putting
up signs to encourage guests to reuse their towels or distributing brochures
to encourage tourists to partake in the hotel’s eco-tourism measures. As it
appears, recycling is not emphasised as there is no separation of trash bins
into the various recycling materials such as paper and plastics.
The development of hospitality and tourism in Siem Reap may also
affect the sustainability of tourism in the area. According to Sharp (2008),
the development of hotels in the area has led to decrease in underground
water supply beneath the urban areas as organisations dig underground for
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water supply. The extracting of water from underground sources has led to
instability within the ground supporting Siem Reap and in particular the
temples of Angkor. According to Jinnai (as interviewed in Sharp, 2008) and
Takahashi (as interviewed in Sharp, 2008), if the government does not
control the water intake of the hotels and organisations in the area, the
stability of the ground in the long run will be affected and may lead to the
destruction of the temples as the ground crumbles underneath the weight of
the temples.
The increase in tourism has also led to the pollution of the temples.
The large influx of tourists arriving in groups to Angkor Wat and its
surrounding temples have caused the walls of the temples to be discoloured
due to the pollution which is caused by engines of the tour buses of the
tourists. While the tourists walk through the temples, the engines of the tour
buses are left running in order for the air conditioning within the bus to work
to keep the bus cool. This has caused the walls of the temples to turn black
due to the pollution caused by the running engines of the tour buses.
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In relation to the preservation and restoration of the temples, the
Cambodian government together with non-government organisations such
as UNESCO and the World Monument Fund as well as the funding from other
countries such as Japan and Germany, has cooperated to restore the
structure of the temples. Construction has already started on Angkor Wat.
The pictures from the previous page as well as above show some of the
preservation efforts of Angkor Wat and the surrounding temples by non
government organisations such as World Monument Fund and UNESCO.
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4.0 Impacts of Globalisation on Hospitality Industry
Source: Publication ASEAN, 2009
The table above shows the percentage of employment by industries of
countries involved with ASEAN. The employment of the agricultural sector of
Cambodia has been on a decline since year 2002 from 70.0% to 60.3% in
2004. In the same period of time, there has been an increase in employment
in the wholesale, retail trade, restaurants and hotels industry of Cambodia. In
2002, the employment rate of the industry was 10.4% but the rate increased
to 14.5%. This can further be justified from an interview with Orta (2011), the
younger generation (from rural areas), travel to Siem Reap and Phnom Penh
for job opportunities in the hospitality sector.
Thus, the increase in international hotels entering into the country due
to globalisation has led to the movement of workforce from rural areas
focusing on agriculture into the major cities focusing on business and
tourism.
According to Orta (2011), “Foreign labour is emphasised at
management level by the international hotel chains for managerial positions.
Fewer chances are given to the locals to be promoted.” Orta (2011) also says
that locals are at most promoted to the highest level of front office or human
resource in the international chain hotels.
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Thus, globalisation has led to the increase in foreign labour into the
Cambodian economy. In the hospitality and tourism industry, these foreign
labour have been employed for managerial and senior management
positions, giving favour to foreigners over locals for those positions.
Globalisation may have caused local employees to be overlooked for
managerial positions even though the employees have the calibre for the
position.
Globalisation has also led to the increase in job opportunities for the
country. Emerging Market Consulting (2005) stated that tourism in Cambodia
has been growing by 30% each year which has encouraged the development
of hotels, resorts and guest houses. The opening of these hospitality
organisations has led to more job opportunities for the local community of
Cambodia.
Although the Cambodian government encourages the entry of
international businesses to set up in Cambodia, the ruling that the
international company must cooperate with a local operator may discourage
some international companies who wish to fully own land in the country. The
ruling, according to the tour guide, Jet, is that the local operator must own at
least 51% of the land that the international company is planning to operate
on. This may discourage certain international groups who prefer full
ownership of a business from entering into the Cambodia market.
Globalisation may also lead to a shortage in skilled labour. Due to the
low wages of Cambodia, skilled labour may be enticed to travel overseas in
search of work. Due to Cambodia’s membership in ASEAN, it is now easier to
travel to other countries in search of a better paying job. This may lead to
the country having a shortage of skilled labour, leaving the country with
unskilled labour which require more training.
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5.0 Harmonisation of Tourism and Local Community
5.1 Religion
In terms of religion harmonisation, Orta (2011) stated that there is a
small Christian community in Siem Reap which is apparent as there are few
small churches in Siem Reap. Majority of the locals are following the
Buddhist religion. The influence of Christians into Cambodia may be caused
by the employment of foreign managers in the international hotel chains who
are Christians.
The hotels and food and beverage establishment use Christmas as a
time to attract more tourists. According to the interview with Le Meridien
Angkor Revenue Manager, Orta (2011) says that the Christmas and New
Year’s holiday period is one of the peak times in the industry besides
Chinese New Year. According to Jet the tour guide, Christmas was not usually
celebrated by the locals in Cambodia. Thus, as tourists visit Cambodia to
celebrate Christmas as well during their visit, the celebration of Christmas
has been incorporated into the local culture as the Cambodians have also
started to celebrate Christmas as a holiday.
Some issue in term of religion is the non halal product in Siem Reap.
Siem Reap is not recommended for Muslim tourist. We hardly find Halal food
for the tourist. As a result, the most nation that tourist come from is non
Muslim country such as Japan, South Korea, China, and United States. Thus,
they may lose the market from Middle East.
5.2 Culture
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In Siem Reap, we may see that there is only little interaction between
the tourist and local community. Language has become the major barrier
here. Basically, the tourists just interact with the tour guide and the tour
guide will interact with the local community. As a result, the local community
may only observe the tourist without any communication.
There has been an influence on the dressing fashion of the locals from
the tourists that visit Cambodia. Prior to the development of tourism in Siem
Reap, Jet explained that one could hardly find local girls wearing short pants
and sleeveless shirts. However, due to the high arrival of tourist there and in
particular the increase in tourists from South Korea, the local girls have
started to imitate the way the tourist dressed. For example, the local women
are starting to wearing short sleeve shirts and short pants while the younger
generation have started to follow the Korean fashion of dressing. For the
older generation, they do not like this condition. There is a clash in Asian and
Western culture on the way of dressing.
In term of event, Chinese New Year has become another peak time for
hospitality industry in Siem Reap. The Cambodian culinary is affected by
Chinese culinary here. In order to accommodate the Chinese, Chinese food
can be found almost everywhere. The issue here is the number of Chinese
and Western food outlet may overcome the number of Cambodian food
outlet. For a long run, it may not be sustainable since tourist may find better
western and Chinese food in other country. It should expose the local food
more.
In terms of cultural events, some restaurants are offering free local
dance performances such as the traditional Apsara dance in order to attract
tourists to come and dine at the restaurant while watching the dance. Thus,
this has led to the traditional dances to be used as an advertising tool
instead of being used to remember special events.
Son and Suong (1995) also stated that the development of new
modern buildings such as hotels and restaurants have caused the
deterioration of the traditional Khmer culture of towns such as Siem Reap.
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The introduction of the modern hotels and restaurants have led to the
damaging of the traditional town image of Siem Reap as the modern hotels
and restaurants do not have any traditional Khmer design in them.
5.3 Socio Economic
Hospitality industry may attract the local community more. The reason
is the income of the business. The average income for people in Cambodia is
1-2 USD per day. Meanwhile, a tourist may spend 3-4 USD per meal. Thus,
we may see a big gap between the income of hospitality industry and other
industry.
The issue here is the shifting of people from other industry into
hospitality industry. Thus, it may result in oversupply. According to interview
with Mr. Andreas Orta, Le Meridien Angkor Revenue Manager, there is
already an oversupply of hotel in Siem Reap.
Another issue is usage of foreign worker. This is due the education
level of Cambodia may be lower than other country. Even though the job
from hospitality industry offers a great salary, the employer sometimes
prefer to foreign staff in order to save training cost and time.
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Conclusion
In relation to the performance evaluation of Cambodia’s hospitality
products, it can be summarised that the mid-scale and budget
accommodation facilities are performing to the tourists’ standards of
satisfaction. One assumption is that the budget travellers may not be as
demanding as travellers who have a larger expenditure power, thus, may be
easily satisfied. However, cleanliness is an issue as most of the participants
stated that cleanliness of Siem Reap could be improved.
In relation to sustainable tourism, some issues have risen such as the
water supply issue caused by the increase in hotels in the area which can
cause several outcomes such as the destruction of the temples of Angkor if
the underground water supply is not managed properly. Also, the
development of tourism in the country has increased the level of pollution
due to the increase usage of tour buses for tour groups.
There has also been issues in relation to the harmonisation of tourism
and the culture, religion and socio-economy of Cambodia. For one, tourist
from Korea have led to a change in dressing fashion for the local community.
Tourism has also led to the change in the design of Siem Reap town as new
modern buildings such as restaurants and hotels are increasing and
changing the look of Siem Reap from traditional Khmer town to a modernised
town.
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Reference
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Emerging Market Consulting (2005), Comparative Industry Assessment. Cambodian
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Publication ASEAN (2009), ASEAN Statistical Yearbook 2008,7. Available from:
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Sharp, R. (2008), Heritage site in peril: Angkor Wat is falling down. Available from:
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Environment. Available from: http://unesdoc.unesco.org/images/0012/001226/122618eo.pdf [Accessed: March 2, 2011].
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