Cambodia’s border tensions and fraud hub stigma damage tourism industry

Cambodia is struggling to recover its tourism sector as geopolitical tensions and a growing reputation as a cybercrime hub keep tourists away.

The industry, once a major driver of the country’s economy, has shrunk to account for 9.4% of gross domestic product in 2024, compared with 12.1% of gross domestic product in 2019, according to data released by the Tourism Ministry on Monday.

Cambodia has come under international scrutiny following reports that it has become a hub for operating fraud centers. According to the United Nations Office on Drugs and Crime in June 2025, profits from these illegal activities were reportedly linked to political elites.

The Southeast Asian country is also at odds with neighboring Thailand over a decades-old border dispute, which escalated into sustained armed conflict throughout 2025, before the two sides reached a ceasefire on December 27, 2025.

Prior to that, the two countries had agreed to a ceasefire in June 2025, but fighting flared up again in early December.

According to the ministry, tourist arrivals to Cambodia from the Asia-Pacific region have fallen the most, with a 20% drop from the previous year in 2025.

“The issue of fraud centers resonates more in East Asia and is heard more often. You don’t hear about fraud centers as much in the US or Europe,” said Stephen Higgins, managing partner at Mekong Strategic Capital.

Thailand had the biggest drop in tourists in the region, with a drop of more than 50% amid ongoing border tensions.

South Korean tourist arrivals fell by 20.6% after the city of Seoul imposed the strictest stage of its four-tier travel warning system in October 2025, effectively banning travel to some parts of Cambodia where “employment fraud and detentions are surging,” according to a Google translation of a Ministry of Foreign Affairs statement.

This follows the death of a South Korean student who was allegedly lured to work in a fraudulent facility in Cambodia and died after being tortured.

Chinese tourists to Cambodia bucked the overall trend, increasing by 41.5% in December, but still less than half the number of tourists before the pandemic. This is a further blow to the struggling tourism sector, as China is one of Cambodia’s key markets for high-spending tourists, according to a report by the ASEAN+3 Macroeconomic Research Bureau in August last year.

China is pressuring Cambodia to crack down on scam hubs, according to a WeChat post from the Chinese Embassy in Cambodia in January, adding that its reputation as a scam haven risks damaging bilateral relations between the two countries.

Cambodia is cracking down on cross-border criminal activity within its borders to eliminate stigma and improve diplomatic relations with other countries.

A Cambodian Ministry of Interior spokesperson said on Saturday, via Google Translate, that the country’s authorities have so far arrested more than 2,000 fraud centers.

In early January, Cambodian authorities arrested Cheng Zhi, the alleged mastermind behind the fraud. He was extradited to China, Beijing’s state media confirmed.

Cambodia has been cooperating with South Korea since November 2025 to combat cross-border fraud cases. In response to the agreement, the South Korean government lowered the travel alert for Cambodia to Level 2 or Level 1 in December for each region.

On the travel front, Cambodia’s Ministry of Tourism introduced visa exemption for Chinese nationals in December for a trial period from June 15 to October 15.

“People are nervous about coming to Cambodia, so we hope that by shutting down that fraudulent industry, these reputational issues will go away over time,” said Stephen from Mekong Strategic Capital. “It won’t happen overnight, but it will happen. Then we will see an increase in tourist numbers,” he added.