How tourism can and should be developed in Malaysia

I am not sure how Tourism Malaysia measures its full key performance indicator (KPI). For an ordinary rakyat Malaysia like me, what I hear is the number of visitors coming into the country every year. The bigger the number, the more successful we seem to be. That’s what we’re told, and most of us have accepted it.

Malaysia is back to campaign mode this year with Visit Malaysia 2026. This is the sixth edition of Visit Malaysia Year and the target on the table is a big one with 47 million visitors. And as Malaysians we should welcome visitors from all over the world.

What I keep coming back to is a different question. What kind of visitors do we really want?

Arrivals alone don’t tell you much. A more honest scorecard would be how much visitors spend, how long they stay, whether they come back, what it does for business, and whether the money actually reaches the hotels, restaurants, transport operators, retailers, attractions, and the local communities who need it.

Leisure travellers or holiday makers are important. They bring energy, they bring spending and visibility to the country. But if we really want tourism to be a strong economic sector and not just a number we try to chase every year, then we need to focus on commercial travellers, a group that is rarely talked about.

What makes a commercial traveller different

Commercial travellers to me are made up of two groups, individual business travellers (FITs), and MICE segment (meetings, incentives, conventions, exhibitions). In my own simple definition, a commercial guest is one who is being paid for by an organisation or by the company. Commercial travellers’ flight class, hotel type, hotel category, meal allowance, even their entertainment budget is typically determined by company policy and not personal preferences.

That single fact changes everything about their travel. A leisure guest on the other hand is spending their own money and so every decision is measured against a personal budget. A commercial guest is usually working on someone else’s budget and that becomes apparent, whether it’s a higher room category, better restaurants, more frequent meetings, more entertainment for client pleasure or longer stays on the business trip.

Once you see that difference clearly, tourism development starts to look different too. And the question will not simply be “how do we get more tourists in”. It has to be “which segment creates the deeper economic value, and how do we turn one visit into the next one?” That’s where commercial tourism earns its keep.

Think about what a business traveller actually sees on a typical business trip here. Most often it’s just the airport, the hotel, the convention centre, maybe a restaurant or two, maybe one attraction that’s added in between sessions. That’s a small slice of the country. But for so many of them it’s their very first real impression of Malaysia.

If that slice goes well, if it’s smooth, warm, efficient, memorable, there’s a chance that person goes home and tells their spouse, “we should bring the kids here sometime.” That’s the whole thing in one sentence, a business trip quietly becomes a future family holiday and commercial tourism becomes leisure tourism a few years down the road.

None of that happens by accident, though. It takes more than a good slogan or a glossy brochure. Airport efficiency, transport connectivity, hotel service, food quality, safety, cleanliness, cultural experiences, professionalism and ease of doing business all play a role here.

The good news is that Malaysia is not starting from zero. We have good convention centres, hotels and resorts built around good meeting facilities, international airports with good connectivity, diverse food, multicultural texture, good shopping, good medical facilities and everything from islands to rainforests to heritage offerings, most of it still reasonably inexpensive in comparison to our regional competitors. The hardware is in place.

MyCEB can't carry this alone

The Malaysia Convention & Exhibition Bureau (MyCEB), our national convention bureau, has been pitching Malaysia for MICE business. Anyone familiar with this segment knows that MICE business doesn't happen overnight. Some conferences and incentive groups can take years from first pitch to confirmation. The competition is regional and global and venues in Singapore, Bangkok, Bali, Hong Kong, Seoul and Dubai are going after the same pie.

So it seems unfair, and unrealistic to expect one agency to carry out the entire MICE agenda by themselves. Hotels have to take ownership too.

Walk through any city precinct in Malaysia and you’ll see several hotels near each other, each one with a big ballroom, meeting rooms, banquet space, restaurants, and rooms to sell. And yet most of them still compete for business one hotel at a time. One wins a piece here, another wins a piece there. Everyone protects their own space, and the destination loses out on bigger possibilities. Perhaps hotels in the same precinct should be launching more tangible coalitions. Bundled together, a cluster of nearby hotels can chase conferences, exhibitions, incentive groups, corporate meetings, government events, and regional forums that every individual property can’t sell for on its own, and may be short on rooms, or even on meeting space but grouped together they have the scale.

That takes a mindset change. The question of “how do I fill my own hotel” and not “how do I bring bigger business to this place, and then, in return, split the benefit of that business in a fair way” is no longer a question anymore. A cluster like that can put together joint destination proposals, share room block strategy, coordinate transport, build a shared events calendar, offer dining variety, run spousal programmes, arrange post event tours and do it in partnership with state tourism bodies, airlines, convention centres, chambers of commerce, universities and professional associations. This is not theory. This is practical destination selling.

The empty ballroom problem

I have spent years representing hotel owners, but there’s one complaint I hear over and over. Ballrooms and function spaces are far too often empty. These are expensive spaces to build, maintain, cool, clean, staff and equip. When they are empty, it’s not just an empty space. It is money sitting on the table.

Many don’t realise the ripple effect is bigger than that. An empty ballroom drags down F&B sales, leaves banqueting staff underutilised, idles expensive AV equipment and takes the energy out of the whole building. A hotel with a full events calendar feels alive. A hotel with dark function rooms feels quiet, even if the room occupancy upstairs feels perfectly healthy.

The real question is not so much “how do we sell more rooms” but rather “how do we activate the whole asset, and not just the bedrooms?” That means treating function space as a commercial engine in its own right and not a place that simply sits around waiting for the next wedding or annual dinner to happen. These spaces need to be programmed and marketed hard to target smaller meetings, training sessions, product launches, corporate retreats, association events, education seminars, wellness forums, medical talks, SME conferences, government and community events that put bums on seats.

Tourism development is not always about chasing foreign visitors from far away. Sometimes it starts with the commercial activity happening right on your doorstep. It involves hotels doing their homework on the local economy around them, which companies are close by and what industries are growing, which associations, universities, hospitals, government departments and business chambers need a venue.

Malaysia’s tourism future shouldn’t be built purely on how many people cross the border. Numbers matter, but quality of visitor matters more. What we really want are visitors who spend more, stay longer, come back and leave behind wider economic value than one transaction at immigration.

Commercial visitors do exactly that. They fill up hotel rooms in the middle of the week when leisure demand is low. They use meeting rooms, dine out, network, extend their stay and talk about the destination to people back home, and if we treat them well, some of them come back as leisure visitors with their families in tow.

Which is why this can’t be another campaign that runs its course and ends quietly. It needs to be a coordinated effort across national, state, city and industry lines. Tourism Malaysia can open doors internationally. MyCEB can chase the big MICE events. State tourism bodies can shape what makes each destination so different. Airlines can keep improving access. But none of it replaces the hard work hotels, venues, restaurants, retailers and transport providers need to do to organise themselves better on the ground.

The opportunity is already in front of us. Malaysia isn’t short on attractions, isn’t short on hospitality products and isn’t short on facilities. What’s missing is sharper segmentation, better cooperation across industry players who currently see each other as competitors, and a commercial understanding of tourism.

Because the real success of tourism can’t be measured by how many people come. It is how much value they are leaving behind, how many will return and how many regular Malaysians benefit from their visit.

Dr Hanley Chew is a hotelier, entrepreneur and former Hospitality CEO with over three decades of leadership experience in the hospitality industry across Asia. He has led hotel groups, advised businesses on strategy and transformation, and remains a passionate advocate for innovation, leadership excellence and the future of hospitality. His writing draws on practical experience and explores how emerging trends in technology and customer experience are reshaping the way organisations create value.