MALAYSIA COUNTRY REPORT
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1 1 MALAYSIA COUNTRY REPORT UNWTO 25 th CAP-CSA AND UNWTO CONFERENCE ON SUSTAINABLE TOURISM DEVELOPMENT HYDERABAD, INDIA 1
2 2 A) OVERVIEW The year 2012 augurs well for the tourism industry with the achievement of a major milestone of welcoming 1 billion international tourists globally. Regionally, Asia and the Pacific recorded the highest growth with an increase of 7% tourist arrivals compared with the average global growth of 4%. This reflects the vitality of the tourism industry in the region. The growth trend is expected to continue in 2013 and beyond in line with the 3% to 4% projected under the UNWTO s long term outlook Tourism Towards In order to tap the growth potential of tourism and to realise Malaysia s aspiration of becoming a high-income country by 2020, Malaysia launched the Economic Transformation Programme (ETP). Towards this end, tourism has been identified as one of the national key economic areas (NKEAs) to propel this economic transformation. In this regard, the Malaysia Tourism Transformation Programme (MTTP) was formulated to achieve the targets of attracting 36 million international tourists and generating RM168 billion in terms of tourist receipts. This translates to an expansion by 3 times the foreign exchange earnings, thus contributing RM3 billion (USD1 billion) revenue per week in This strategic ambition will be achieved through, inter alia, the 12 Entry Point Projects (EPPs) proposed under the Tourism NKEA based on the themes of affordable luxury; family fun; nature adventure; business tourism; and international events, spa and sports. B) INTRENATIONAL TOURIST ARRIVALS AND RECEIPTS In 2011, the country registered million tourist arrivals, which placed Malaysia as the 9 th most visited country of the UNWTO top-ten list of countries with highest tourist arrivals. In 2012, Malaysia recorded a total of million arrivals compared to 24.7 million arrivals for the same period in This represents a growth of 1.3% in tourist arrivals. 2
3 3 Singapore was the biggest contributor to Malaysia s tourist arrivals with million (51.99%) in The other the top ten tourist arrivals in the short-haul markets were from Indonesia (2.38 million), Thailand (1.26 million), Brunei (1.26 million) and Philippines (0.51 million). The key medium-haul markets were from China (1.56 million), India (0.69 million), Australia (0.51 million) and Japan (0.47 million). United Kingdom (0.40 million) is the only long-haul market in the top 10 list. The top 10 markets for inbound tourism are shown in Table 1. Table 1: Top 10 Tourist Arrivals by Country of Nationality 2012 Number of Tourists Arrivals (million) Total of Tourist Arrivals Singapore Indonesia China (including Hong Kong & Macau) Thailand Brunei India Philippines Australia Japan United Kingdom Source: Tourism Malaysia The tourist receipts for 2012 increased by 3.9%, generating RM60.6 billion to the economy as compared to RM58.3 billion in Malaysia s tourism sector is anticipated to maintain its prominence as the country s third largest foreign exchange earner to the economy. 3
4 4 C. DOMESTIC TOURISM The number of domestic visitors increased 15.5 million or 13.4 % from million in 2010 to million visitors in About two thirds or 88.4 million were visitors from the urban areas while the remaining one third or 42.6 million were from the rural areas. Excursionists made up 65.1 % or 85.3 million of the million visitors, while the remaining 34.9% or 45.7 million were tourists. The comparison of domestic tourists and excursionists is shown in Table 2. Table 2: Domestic Tourism Year Domestic Excursionist (mil) Percentage Domestic Tourist (mil) Percentage Total Domestic Visitors *Tourist: If his / her trip includes an overnight stay **Excursionist: If his / her trip takes less than 24 hours Source: Malaysia Tourism Satellite Account D. EMPLOYMENT Tourism-related industries being a service industry and relatively labour intensive, accounted for almost 2.0 million jobs in Employment in the tourismrelated industries registered a growth of 7.7% in 2011 as compared to 4.7 % in In 2011, the share of employment in the related tourism industries was 16.4 % compared to the previous year s share of 15.6 %. The employment statistics by year are shown in Table 3. 4
5 5 Table 3: Employment in the Tourism-Related Industries Year Employment in the tourism-related industries Number ( 000) Annual change Total Employment Number ( 000) Share of employment in the tourism-related industries to total employment , , , , , , , , , , , , , , Source: Malaysia Tourism Satellite Account, E) HOTEL OCCUPANCY RATE The overall national hotel occupancy rate for the 1 st half increased by 3% to 60.6% in 2011 compared to 57.6% in This is in tandem with the increase in international and domestic tourists. Pahang recorded the highest occupancy rates at 80.4%. The Federal Territory of Kuala Lumpur and Selangor recorded the second and third highest occupancy rates of 65.1% and 63.5% respectively. The Average Hotel Occupancy Rate - by State/Federal Territory (F.T.) is shown in Table 4. 5
6 6 Table 4: Average Hotel Occupancy Rate by State/Federal Territory (January June 2011 and 2012) STATE/ FEDERAL TERRITORY JAN - JUNE 2011 JAN - JUNE 2012 DIFFERENCE KUALA LUMPUR F.T PUTRAJAYA F.T SELANGOR PERAK PENANG KEDAH PERLIS KELANTAN TERENGGANU PAHANG JOHOR MELAKA NEGERI SEMBILAN SABAH LABUAN F.T SARAWAK MALAYSIA Source: Tourism Malaysia F) CONNECTIVITY Malaysia is well connected in terms of accessibility and flight connectivity. There are several international airports connecting Malaysia with other parts of the world such as Australia, New Zealand, United States, Europe, China, Japan India and many other countries across the region. 6
7 There are up to 50 different foreign airlines coming to Malaysia yearly. Among the foreign airlines are KLM Royal Dutch Airlines, Lufthansa German Airlines, China Airlines, Cathay Pacific, Etihad Airways, Emirates Airlines, Saudi Arabian Airlines, Japan Airlines and Indian Airlines. Besides that, there are also chartered flights coming into Malaysia mainly from North East Asia. 7 Recognising the importance of accessibility, measures were undertaken to enhance connectivity to Malaysia. In order to improve the comfort of tourists and cater for the expected increase in air passenger traffic, the Penang International Airport and Kota Kinabalu International Airport were upgraded. Negotiations for additional landing rights and tactical promotional campaigns with airlines and tour agents were implemented to increase connectivity for scheduled flights and chartered flights. Towards this end, an additional 7,208 seats per week to six priority countries were generated and 436 chartered flights to Malaysia were mounted with a total of 74,028 inbound tourists in 2012 G) INNOVATIVE TOURISM PRODUCTS As part of the efforts to promote a dynamic and vibrant tourism industry, creative tourism products are developed. These include shopping, homestay, parks and gardens, contemporary art tourism and shoe festival. a) Shopping Shopping is one of the 12 EPPs under NKEA - Tourism. The aim of this EPP, which falls under the theme affordable luxury, is to increase the contribution of shopping receipts from 28% in 2009 to 35% by Towards this end, the average tourist shopping expenditure is targeted to increase from RM631 in 2009 to RM1,636 by In 2011, shopping accounted for 30% of the total expenditure of RM58.3 billion. The growth in shopping expenditure can be attributed to a number of initiatives which included: 7
8 i. abolishment of import duty for 328 items to enable Malaysia to offer ii. iii. iv. duty free shopping; the formation of the Bukit Bintang - Kuala Lumpur Convention Centre (BB-KLCC) Shopping Precinct and BB-KLCC Tourism Association to enhance the shopping experience; Construction of the covered walkway from Bukit Bintang to KLCC for the comfort and convenience of tourists; and Mega sales and promotions throughout the year to provide value for money. 8 As a result of the above initiatives, Kuala Lumpur was ranked the 4 th best shopping destination by CNN Travel and 2 nd Best Shopping Destination in Asia-Pacific by Global Shopping Index in KLCC-Bukit Bintang Shopping Presint Covered Walkway b) Homestay Homestay is a community-based tourism product which has the potential to rejuvenate the rural economy. In the endeavor to constantly add value, the Building Bridges product was introduced by incorporating Rail Tourism and Homestay Program. It targets young tourists, and includes elements of volunteer tourism. This innovative product is popular due to its offerings of a nostalgic experience where travel is done at a leisurely pace to enjoy the scenic beauty of the countryside and the opportunity to be immersed in local cultural experiences. 8
9 9 In 2012, Malaysia was awarded the First Prize UNWTO Ulysses Award for Innovation in Public Policy and Governance for the Malaysia Homestay Experience Program. This award was the result of creative ideas to market the Homestay Program through, among others, e-marketing Homestay, Building Bridges and Plant a Tree programs. The initiative not only benefits tourists, but also provides a vital source of income and employment for local communities, especially in rural areas. UNWTO Ulysses Award Building Bridges c) Parks and Gardens Tourism The Parks & Gardens tourism product leverages on existing parks and gardens of Malaysia. With minimal infrastructure costs, parks and gardens trails can be developed and packaged as a niche tourism product. It offers tourists the opportunity to view the landscapes, rare flora and vibrant culture of the Malaysian archipelago inspired by lush rainforests and idyllic kampung village gardens. As part of the promotional efforts, Malaysia participated in the Chelsea Flower Show. In recognition for the concept, design and uniqueness of the show garden, a gold medal was awarded to Malaysia at the Chelsea Flower Show This prestigious award bears testimony to Malaysia`s potential to 9
10 be promoted as a parks and gardens destination based on the wealth of Malaysia s mega biodiversity. 10 Sabah Agricultural Park Tenom Putrajaya Botanical Garden d) 1Malaysia Contemporary Art Tourism (MCAT) The 1Malaysia Contemporary Art Tourism (MCAT) is a tourism product to increase the contribution towards the economy. It aims at establishing Malaysia as the destination in the region to enjoy and acquire contemporary art, with museum-quality pieces. It provides the platform and encourages owners of art galleries to launch new pieces by young artists. Besides nurturing a pool of talented artists, MCAT will create greater awareness on the significance of contemporary art. It will also attract more local and foreign visitors to art galleries and contemporary art exhibitions. These measures will set the trend for the growth of contemporary art tourism. 1Malaysia Contemporary Arts Tourism Festival 10
11 11 e) 1Malaysia International Shoe Festival It is one of the signature events under the Meetings, Incentives, Conventions and Exhibitions (MICE) segment, jointly organized by the Ministry of Tourism and the Malaysian Footwear Manufacturers Association. It is aimed at promoting shopping, enhancing the shoe industry, nurturing young talents and generating new sources of growth. It is a consumer and businessto-business event. The 3-day event attracted 50,000 visitors and generated RM7.1 million in terms of retail sales turnover. The highlight of this event is the luxury couture collection of internationally-acclaimed shoe couturier and Malaysia s Tourism Ambassador, Prof. Dato (Dr.) Jimmy Choo. 1Malaysia International Shoe Festival H) JOINT PROMOTION Joint promotion is a cost-effective way to market multi-destination tourism packages. In this regard, joint promotional efforts towards a multi country multi destination were carried out through the UNESCO Package initiative. It is a package that provides an experience of visiting three heritage sites located in two countries, namely Malaysia and Indonesia. With the price of one package, a tourist gets to experience different cultural-mixes from three UNESCO World Heritage sites, namely Borobudur in Indonesia, and Malacca and Penang in Malaysia. It also can help to upgrade the livelihood of the local economies through 11
12 sustainable tourism for both nations. This collaborative initiative between Malaysia and Indonesia is a positive development for tourism in the region. 12 As part of the efforts to enhance joint promotion, the ASEAN Product Working Group (PDWG), identified 130 tourism products to be promoted namely naturebased tourism, cultural and heritage tourism, community-based tourism and cruise and river-based tourism. These tourism products are collaborative efforts between at least two (2) ASEAN Member States (AMS) with at least one (1) ASEAN tourism product identified. The packages developed are jointly marketed under the ASEAN brand South East Asia: Feel the Warmth. I) CONCLUSION Malaysia will continue to strive for increased collaboration in both regional and international for a to mainstream tourism as one of the key important pillars for socioeconomic development. Efforts will be intensified to ensure that Malaysia remains an attractive destination for tourists and to achieve the targets of MTTP. Ministry of Tourism Malaysia April
Community Based Tourism
1 Community Based Tourism Malaysia Homestay Experience Programme NORIMAN B. ROJULAI Ministry of Tourism Malaysia 2 Launched in 1995, initiative under Malaysian s Rural Tourism Master Plan Aimed increasing
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