PETALING JAYA: While year-end sales have been encouraging, retailers are hoping that the visa-free travel for Chinese and Indian tourists will further boost sales, especially for the coming Chinese New Year.
Retailers say while it may be too late to catch the tourist crowd for the Christmas and year-end shopping, they are hoping for stronger sales in 2024 as the 30-day visa-free travel initiative for visitors from China and India to Malaysia – which started on Dec 1 – is effective until Dec 31 next year.
Malaysia Shopping Malls Association president Tan Sri Teo Chiang Kok said it was too late to attract tourists for the Christmas and year-end sales as these were already ongoing, but shopping complexes are looking forward to an influx of foreign tourists, hopefully from Chinese New Year onwards.
He said that having the relaxed visa policy in place would make Malaysia more competitive in the regional tourism market as the country was relatively cheaper for tourists.
“We have been lobbying for this visa-free policy for tourists, especially for visitors from China and India because they used to be our biggest tourist arrivals,” he added.
Consortium of Inbound Tourism Alliance chairman Uzaidi Udanis said the impact from the visa-free travel initiative for visitors from China and India was being felt.
“It is a very important initiative to boost tourism because we want to attract high-end visitors such as businessmen from China, for example, to come golfing in Malaysia for the weekend.
“With the visa-free initiative, then they can hop on a flight and travel here.
“The impact is there, we have received lots of interest and enquiries. Our agents are rushing for quotations, and bookings will be coming.
“We are hoping the Christmas season will be a bit better but we are banking on the Chinese New Year holidays in February and during the winter in March for our Chinese and also Indian markets,” Uzaidi said.
Malaysia Retailers Association (MRA) president Datuk Andrew Lim said retailers observed increased sales activity in October and anticipated better months ahead.
While uncertainty remains about whether it will match the levels in 2019, Lim expressed optimism.
“The signs are encouraging. Our local shoppers are now returning to shop, especially with the school holidays, December year-end holidays, Christmas, and New Year approaching.
“Hopefully, these three months will recover some sales for our members,” he said.
However, he said that Chinese tourists who enjoyed the 30-day visa exemption were unlikely to travel to Malaysia in the short term as many had planned their year-end holidays and Lunar New Year celebrations.
While he commended the government for the positive step of granting visa exemptions to Chinese tourists, Lim cautioned that it might need time to bear fruit.
“This is a positive move, but we don’t expect an immediate effect.
“We hope that the effect will come after Chinese New Year. Right now, all foreign tourists have already made their travel plans,” he noted.
He highlighted the current reliance of retail sales on local demand, with foreign demand from visiting tourists playing a minor role compared to 2019.
He said several factors contributed to this, including the subdued operations of Malaysia Airlines (MAS).
“One of the factors is that MAS is not in full force yet. So, the airline must start flying again as it used to in 2019, to bring a lot of foreign tourists into Malaysia,” he said.
Lim urged Malaysia-based airlines, including Firefly and AirAsia, to prioritise Malaysia as a destination in their flight schedules.
He added that a resurgence in tourist arrivals was crucial for the retail sector.
Meanwhile, according to the Malaysia Retail Industry Report by the Retail Group Malaysia, the shopping traffic for the last three months of the year is expected to be similar to 2022 levels.
“Malaysian consumers will still be spending. However, the holiday sales will not be the same as pre-Covid levels due to the shortened school holiday, as there is only two weeks remaining this year,” said the report.
It also noted that for the third quarter of 2023, the retail industry achieved a better-than-expected growth rate of 2.7% in retail sales, as compared to the same period in 2022.
“This latest quarterly result was above market expectation.
“Members of MRA and Malaysia Retail Chain Association (MRCA) had projected the third quarter growth rate of 1.4%,” said the report, adding that for the fourth quarter of 2023, the growth rate estimate was 2.1%.
The report also noted that higher cost of living would continue to have a negative impact on the purchasing power of Malaysian consumers.
Meanwhile, Tourism, Arts, and Culture Minister Datuk Seri Tiong King Sing said he had informed local tourism stakeholders to prepare for an anticipated surge in tourist arrivals to Malaysia.
He noted proactive efforts to promote Malaysian tourism in China and India, leveraging the recent 30-day visa exemption offered to Chinese and Indian tourists.
He also expressed confidence that this would attract many visitors to Malaysia.
In response to inquiries about the ministry’s target for Chinese and Indian tourist arrivals in Malaysia next year, Tiong said this information would not be disclosed.
“We need to observe the number of visitors arriving with visa exemptions, as this convenience for Chinese and Indian tourists has just commenced on Dec 1,” he said.
Citing data from the Immigration Department, he said that from January to Nov 15 this year, 26 million foreigners entered Malaysia.
He hopes the visa exemptions will attract several million more foreign visitors to Malaysia, adding that there are ongoing efforts to support local tourism-related industries in augmenting their revenue.