However, the foreign investment climate has improved significantly in recent years, especially with respect to hotel development, including in Phnom Penh. A new system for lease registration has been developed that effectively allows for registering land titles, allowing foreign entities to take out 99-year leases on property, which otherwise would be subject to foreign ownership restrictions. Those restrictions on foreign ownership of land have stifled foreign direct investment in the past. As these rules change, Hilton's ability to build out a strong Cambodian asset base will improve. It is recommended that in order to obtain early mover advantages that Hilton get in front of this curve by taking out 99-year leases on properties, something other hoteliers have done already.

The hotel business in Phnom Penh is currently underdeveloped. There are few international players; most hotels are small operations owned by domestic firms either wholly or in partnership with firms from...
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