Malaysia looks to attract more Chinese tourists

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As part of a broad national strategy to promote itself as a prime tourism destination, Malaysia has ramped up efforts to court Chinese visitors with a series of initiatives.

In July Tourism Malaysia signed a memorandum of understanding (MoU) with Chinese e-commerce platform Alibaba. The partnership allows Chinese consumers to access Malaysian tourism products and services promoted and sold through the Alibaba website.

Among the offerings made available through the agreement are local tour and hotel packages – with and without flights – mobile vouchers for dining and shopping, tickets to local attractions and events, as well as local transportation and communication services.

Ease of access

The MoU follows efforts on the part of the Malaysian government to facilitate entry for tourists. In March of this year Nazri Aziz, minister of tourism and culture, officially launched an e-visa programme intended to ease entry restrictions for visitors from China and elsewhere in Asia.

The new system will have three phases of implementation, the first of which will affect Chinese nationals living in mainland China. The second phase will include Chinese nationals living outside of the mainland, while the third will impact other Asian countries such as India, Myanmar, Nepal and Sri Lanka.

In addition, the government is allowing visa-free entry for Chinese tourists staying in the country for 15 days or less through to December 31.

The success of these initiatives could spur significant growth in the sector. China currently has the largest outbound tourism market in the world; in 2015 over 120m Chinese nationals visited destinations abroad, and Malaysia was a key beneficiary of this traffic. Arrivals from China numbered 1.68m in 2015, a 4% increase from the previous year.

As the disposable income of China's middle class continues to expand, this market will only grow larger, creating opportunities for increased tourism in nations like Malaysia.

Branching out

Inbound tourist arrivals from China have continued to see positive growth this year, with increased demand for flights from the mainland. Consequently, carriers like AirAsia have increased offerings between the two countries. Beginning in July, the airline increased weekly flights from Beijing and Shanghai to Kuala Lumpur from seven to 11.

Additionally, in October last year, Malaysia welcomed inaugural flights from Air China; China’s flag carrier started with four weekly direct flights from Beijing to Kuala Lumpur.

Capturing a larger portion of Chinese overseas tourists is only part of Malaysia’s multi-pronged growth strategy for the sector.

The government has set a target of bringing in 30.5m visitors by the end of 2016, an ambitious goal it plans to support with a sizeable contribution of RM1.2bn ($298.4m) from the national budget. This represents an 18.7% increase from the 25.7m arrivals recorded last year.

By year’s end, tourist receipts are expected to reach RM103bn ($25.6bn), comprising nearly 15% of the country’s GDP and representing growth of approximately 70% from 2012.

As of July, year-to-date arrivals were up 3.7% year-on-year (y-o-y) at 13.03m, while receipts totalled RM37.4bn ($9.2bn), a 10.7% y-o-y increase, local media reported.

In seeking to boost sector performance, the government has also been strengthening its ties with corporate partners. In July Tourism Malaysia announced a renewed partnership with Malaysia Airlines. Under the agreement, the country’s flag carrier will sponsor flights to bring in foreign media and tour agents from key markets to generate publicity about Malaysia’s tourism offerings.

Other initiatives have targeted domestic travellers. At the Malaysian Association of Tour and Travel Agents Fair to be held in September this year, key attractions – such as the Kota Baru floating market and the gastronomic sites in Ipoh – will be highlighted.

On the go

To increase long-term sector capacity, the country has also been investing in key transport infrastructure, with numerous projects across the country under way.

A high-speed rail service between Malaysia and Singapore, under development since 2013, is expected to cut travel time between the neighbouring nations from four hours by car to 90 minutes upon completion in 2026.

The tourism industry, particularly in Malacca, is expected to benefit from this development, as 50% of Malaysia’s tourists come from Singapore.

Additionally, a new integrated transport system in Penang, a popular destination in the north of the country, is intended to increase economic and tourist activity. The Penang Transport Master Plan includes monorail and tramlines, a cable car connecting the island to the mainland and a reclamation project of islands south of Penang Island.

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