The Royal Group, in partnership with a Thailand-based Swiss investor, will build a 148-room five-star hotel on Preah Sihanouk’s Koh Rong island, with the group having completed a ground-breaking ceremony on Saturday.

Khin Remy, an assistant to Kith Meng, the chairman of Royal Group, said the new villa-style resort will be called Royal Sands Koh Rong Resort, and will cost $40 million during the first phase of construction.

“Construction will start on Sunday [yesterday] and the hotel will be completed by December 2016,” Remy said.

Luzi Matzig, chairman of Thailand-based tourism firm Asian Trails Group and a partner in the project, said that once the hotel was completed, tour operators in Cambodia could use the hotel to attract more tourists to the island, especially after they visit popular tourist destinations, like Angkor Wat and Phnom Penh.

“[The visitors] will not have to go to Vietnam and Thailand for their beach holiday,” he added.

Ho Vandy, an adviser to the Cambodia Chamber of Commerce, said an increasing number of tourists travelling to Koh Rong had resulted in a spur in investments.

He attributed this to an increase in foreign tourists, who were now more aware of Cambodia’s coastal offerings.

However, Vandy said this increased investment could also affect the environment around the islands, and said local officials needed to monitor the impact of increased tourist arrivals on the natural surroundings.

“Before the arrival of tourists, the environment [in Koh Rong] was good. But after investment has come in for the development of hotels, restaurants, environmental pollution has increased”, he said.

In 2008, the Royal Group was granted a 99-year concessional contract by the Cambodian government to develop the island.

According to the Tourism Ministry, 47,000 tourists visited Koh Rong during the first nine months of the year, largely dominated by foreign travellers, with local tourists accounting for only 17,000 of those visitors.