Adding to the mix: Initiatives are under way to attract premium travellers and boost the number of visitors from new markets

The Malaysian tourism industry is currently striving to expand its traditional arrivals base – diversifying away from its dependence on visitors from Singapore and from lower-income regional neighbours like Indonesia – while also expanding the range of activities and holidays available to visitors. The government has therefore put into action a range of initiatives aimed at attracting greater numbers of visitors from non-traditional destinations and demographics.

Neighbourhood Visits

n 2013 the ASEAN market remained Malaysia’s largest source of visitors. According to the Ministry of Tourism (MoT), the top source countries for visitors were Singapore, Indonesia, China, Brunei Darussalam, Thailand, India, the Philippines, Australia, Japan and the UK. Arrivals from ASEAN countries were more than 19m, or 74% of the total.

Yet the mix is changing. In 2013 Malaysia saw increased arrivals from countries not traditionally on the radar. Arrivals from Turkey, for instance, increased almost 29%, partly because Malaysia Airlines, on a code-share with Turkish Airlines, launched seven flights a week from Istanbul to Kuala Lumpur. Multiple new flights from Stockholm, paired with strong promotional efforts, pushed Swedish arrivals up more than 13%. Other countries with increased arrivals included Bangladesh, which was up 56%, Cambodia (29%), Iraq (27%), Egypt (25%), Russia (19%), Taiwan (18%), Ireland (13%), Vietnam (12%), Norway (12%) and Spain (11%).

Premium Travellers

Illustrative of the challenge facing tourism planners who wish to shift the arrivals mix away from lower-income visitors is the island resort of Langkawi. A popular haunt for tourists, Langkawi saw 3.4m arrivals in 2013 – an increase of 12% on 2012 – outstripping its 2015 target of 3m, which has now been hiked to 4m. Yet despite the floods of visitors to the archipelago, tourism receipts have been below target, according to Khalid Ramli, CEO of the Langkawi Development Authority. To address this challenge, the authority is looking at a scheme with a different strategy: attract not only more tourists, but wealthier ones. “We don’t want amusement parks on Langkawi,” Ramli told the press at ITB Berlin, an international tourism trade show held in March 2014. “We are focusing on iconic projects, not mega-developments.”

This strategy is now being borne out by the class of luxury resorts currently under construction in Langkawi. Brands such as Ritz-Carlton and St. Regis are widely reported to be planning to open there by 2017. The national strategy, too, is moving in this direction, a point underscored by Tourism and Culture Minister Mohamed Nazri Abdul Aziz, when he said at a tourism event held in the US in October 2013: “We are targeting high-net-worth tourists and continue to welcome arrivals to our high-end world’s best hotels and resorts.”

Well-Heeled Welcome

To achieve this target, one of the government’s Entry Point Projects (EPPs), falling under the tourism branch of the national development plan, aims to boost the daily spend of foreign visitors by making Malaysia into Asia’s premier shopping hub. Given Malaysia’s strong supply of wealthy visitors from Singapore, China and the Gulf, this project has the potential to be lucrative and to attract a more affluent class of visitors. To draw these people and spur them to spend their disposable income in Malaysia, import duties were eliminated on 328 items in 2011, including handbags, jewellery, cars, glassware, chocolates, shoes, alcohol, cigarettes, perfumes and apparel. The strategy also leverages a price advantage: in a comparison to goods sold in Hong Kong, Singapore, Indonesia and Thailand, the Malaysia Tourism Promotion Board (MTPB, more popularly known as Tourism Malaysia, TM) found most Malaysian goods to be less costly.

Another EPP with a similar goal centres on the promotion of golf. This project aims to attract high-income tourists by combining luxury travel, golf and business. The EPP aims to facilitate cooperation between private players and Tourism Malaysia in order to further promote the country’s popularity as a major golf tourism destination. Established in 2011, the Malaysian Golf Tourism Association will play a key role and with its 45 members, 27 of which are golf clubs and resorts, it is well-positioned to coordinate efforts between local operators, hotels and the media. The project will also leverage the country’s 200 plus golf courses and the four major tournaments that are held there annually – Maybank Malaysia Open, CIMB Classic, Sime Darby LPGA Malaysia and Iskandar Johor Open.

Arts & Culture

Another niche primed for promotion to affluent visitors is culture and heritage tourism. The authorities’ goal here is to highlight Malaysia’s history, art and culture by promoting historical districts, such as those in Malacca and Penang, and by highlighting the country’s contemporary visual and performing arts scene. This last, though concentrated mainly in Kuala Lumpur, also includes areas such as Kota Kinabalu and Kuching in eastern Malaysia. Speaking to the press after officiating at the Penang, Georgetown Art Trial 2013, Ng Yen Yen, chairman of TM, said that art auctions generated RM800,000 ($249,680) for galleries in 2012. She encouraged tour operators to develop art tourism packages to cater to this niche.

Another focus, seen as indirectly related to art and culture promotion, is home-stays – the authentic experience of bypassing hotels and tourist strips to stay with a Malaysian family. Though travellers who tend to seek this sort of experience spend less than those who come for golf or shopping, they are thought to help spread the word about Malaysia’s cultural assets, creating a kind of organic public relations buzz that is hard to achieve through traditional marketing campaigns.

Seeking A Promotion

To attract new markets, TM officials have also launched a range of promotional tours and programmes, the focal point of which is Visit Malaysia Year 2014 (VMY 2014). Under this programme, Malaysia will host a series of around 200 events, including festivals and carnivals such as the Malaysia Mega Sale Carnival and Malaysia International Tourism Night Floral Parade, and is expected to attract 28m tourists in 2014, the prime minister said while presenting the 2014 budget. The government has allocated RM1.2bn ($374.5m) in fiscal year 2013/14 for VMY 2014 programmes, tourism operating and development expenditures, and promotions and advertising.

One such promotional effort was a series of road shows to Sri Lanka and India, which TM officials undertook in March 2014 to drum up enthusiasm for VMY 2014. Officials aim to increase the number of Sri Lankan visitors to 70,000 in 2014, from 64,051 in 2013, and to boost the number of flights from Colombo to Malaysia. As for India, officials are targeting 780,000 arrivals in 2014, compared to 700,000 in 2013, with initiatives to promote new destinations such as Penang, Borneo and Johor. In addition, Indian travellers arriving in Malaysia from a third country will now be offered visas on arrival.

In China, too, TM is making visits to secondary cities to promote Malaysia as a tourist destination. Chinese travellers are increasingly made up of wealthier, more independent, younger holidaymakers who are interested in all-season travel, rather than travelling only in groups during public holidays. Malaysia’s ethnic Chinese also often act as ambassadors for Malaysia when they visit relatives in China. Malaysia is easily touted as a suitable destination, since many in the country speak Chinese, and it is less costly than Singapore or Bali, while offering many of the same attractions.

Building on efforts to draw more culturally oriented visitors, Festival Year 2015 will showcase an assortment of cultural festivals and programmes. Shouldering a portion of the promotional activity for these and other programmes will be Malaysian students studying overseas. Under an initiative called the Student Ambassadors Programme, a contingent of the 15,000 Malaysian students in the UK and Ireland will volunteer as tourism ambassadors, assisting tour operators to promote packages to Malaysia, especially VMY 2014.

Expat Programme

These young ambassadors will also be tasked with publicising the country’s long-term programme for expats, Malaysia My Second Home (MM2H), which allows foreigners to stay in Malaysia for an unrestricted period by issuing multiple-entry social visit passes. A popular choice for retirees, Malaysia was rated the third-best retirement spot in the world by Internationalliving.com’s annual global retirement index in 2013 and 2014. Since its launch in 2002, according to the MoT, 22,320 people from over 120 countries have been approved to live in Malaysia under MM2H.

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The Report: Malaysia 2014

Tourism chapter from The Report: Malaysia 2014

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