The tourism sector is expected to be on the road to recovery this year, helped in part by foreign exchange rates, and on the back of a marginal rebound in tourist arrivals in 2016.
A total of 17.6 million tourists visited Malaysia between January and August last year, representing a 4.6% increase in visits compared with the same period in 2015.
“Arrivals last year so far have seen some recovery due to our promotional initiatives,” says Deputy Tourism and Culture Minister Datuk Mas Ermieyati Samsudin.
Singapore, Indonesia, China, Thailand and Brunei made up the top five countries that contributed to the rise in the number of tourists visiting Malaysia.
However, the Tourism Ministry missed its 2016 arrival target of 30.5 million people due to the falling ringgit, which limited its ability to promote Malaysia overseas.
Mas Ermieyati also says lower promotional funds, global economic uncertainty, limited air accessibility from long-haul markets, stiff regional competition, and safety concerns were among the factors that contributed to the shortfall.
Malaysia has also been struggling with a lower turnout of tourist arrivals from medium and long-haul markets such as Australia, New Zealand, the United States, and Europe.
“The routes rationalisation of the national carrier (Malaysia Airlines), the cancellation of routes by foreign airlines as well as travel advisories put up by certain countries contributed to the dwindling numbers,” she says.
Nonetheless, the travel and tourism industry outlook for 2017 is promising as the ministry expects strong growth in tourist arrivals from China and from the domestic market.
“We expect continued growth from China due to the extended visa facilitation, and are targeting increased arrivals from traditional markets such as India, Singapore, Thailand and Indonesia,” she says.
Mas Ermieyati adds that more flights, easier travel visas for Chinese tourists, and the return of consumer confidence could potentially boost arrivals from China.
Markets like Singapore, Indonesia, Brunei and Saudi Arabia have also seen a turnaround and their tourists are returning to our shores. At the same time, the Tourism Ministry hopes to further boost tourist arrivals from Vietnam and South Korea.
Meanwhile, as the ringgit weakens, domestic tourism is expected to become a more significant sector in Malaysia’s economy.
Mas Ermieyati says the weak ringgit has made it more expensive for Malaysians to travel overseas, resulting in them being more likely to spend their money travelling locally.
The weak ringgit also makes Malaysia more affordable to foreigners.
“The weakening ringgit does not necessarily have a negative impact on the tourism sector as people will still spend on travelling and food, both of which are part of tourism income,” she adds.
Although the falling value of the ringgit will crimp the Tourism Ministry’s advertising expenditure in foreign countries, Mas Ermieyati is confident that promotional activities will proceed as usual.
“We are still keeping our strategic promotions with partners, strengthening smart collaboration with both national and international airlines, focusing on consumer-based travel fairs, intensifying social media involvement in promotional activities, and establishing long-term business networking through the National Blue Ocean Strategy platform,” she says.
Phillip Yong, chairman of Borneo Adventure, a leading inbound tour operator in Sarawak, agrees that the weak ringgit ought to spur domestic tourism.
Yong, who is also the Sarawak Tourism Federation president, says domestic tourism will be given a boost as the cost of going out of the country increases.
“Foreigners will get to enjoy Malaysia at a discount,” he adds.
Sabah Tourism, Culture and Environment Minister Datuk Masidi Manjun also echoes these sentiments. As the ringgit has depreciated against many currencies, Malaysians will probably have to spend their holidays in their own country or travel to more affordable Asian destinations like Indonesia, Thailand, Vietnam and China, says Masidi.
However, he also stresses that more money should be allocated to promote and encourage domestic tourism, and not just outbound tourist destinations.
Sabah has also remained resilient despite news of security threats in its waters, which deterred tourists from visiting the region.
“The kidnapping, security and terrorism issues affecting the tourism industry in Sabah may not be all bad news, as with such challenges come opportunities to reevaluate strategies and recalibrate them to suit changing circumstances.
“Challenges can only make us better managers of the tourism industry,” says Masidi.
He adds that these issues had in fact created an impetus to develop tourism products on the west coast of Sabah to help bring tourists back to the area more quickly.
“Mantanani Island off Kota Belud is now a favourite for diving and snorkelling, or just lazing around on its white beaches. Additionally, investors are not only moving north of Kudat but also to the south, to Kuala Penyu,” he says.
There are currently more airlines operating in Sabah, adds Masidi, especially Chinese airlines flying directly to Kota Kinabalu.
“There are over 150 international flights handled by Kota Kinabalu International Airport weekly and over 400 domestic flights per week,” he says, adding that this makes the airport the country’s busiest after Kuala Lumpur International Airport.
“There are many reasons to be optimistic. Chinese arrivals are up by 48.4%, South Korean by 40.3% and Taiwanese by 27.2%.
“German arrivals too are up by 41%, although the actual number of such tourists is much smaller than those from countries in north Asia.”
Meanwhile, Masidi also urges the Federal Government to consider halving the Goods and Services Tax to 3% on airfares between Sabah, Sarawak and Peninsular Malaysia.
“Not only would it be good for the tourism industry, it would significantly contribute to national integration. We (can) spend our money in our own country too,” he adds.
For 2017, the Tourism Ministry will be targeting 31.8 million tourists and RM118bil in tourist receipts, hence the opening of attractions such as theme parks and factory outlets, such as the Design Village in Penang.
The Tourism Ministry will also highlight new attractions such as the 20th Century Fox Studios Theme Park in Genting Highlands and Movie Animation Park Studios in Ipoh.
“As you know, Ipoh has been chosen as one of Lonely Planet’s ‘Best in Asia’ destinations, so emphasis will also be given to destinations that are promoting their ‘Visit Year’ such as Pahang, Perak and Terengganu,” says Mas Ermieyati.
The ministry will also continue to leverage on its highly successful “Malaysia Truly Asia” branding this year.
And with Asean reaching its 50th anniversary milestone, the Tourism Ministry will also work on a joint partnership with member-countries to make Visit Asean Year 2017 a success.
“To ensure the success of Visit Asean Year, the Ministry is working closely with the Malaysian Association of Hotels and Malaysia Inbound Tourism Association to create more packages for inbound tourists to Malaysia.
“Special offers and travel promotions with partners have been identified and rolled out to give travellers a taste of Asean’s culture, heritage, nature and cuisine,” says Mas Ermieyati.
She adds that visitors can expect tour packages with offers, special airfares, and shopping discounts for their 2017 travels.