Recovery in Tourism Sector by 2024?

The Malaysian tourism sector is only expected to fully recover in 2024 to pre-Covid 19 pandemic levels.  Tourist arrivals will be slow and gradual in 2022 and 2023 on high costs and limited corporate budget. China is likely to keep borders closed to curb the spread of Covid-19. Malaysia's 2022 foreign tourist arrivals will only reach 30% of 2019 levels according to one estimate (CGS-CIMB). In 2023, it may hit 80% of 2019 levels.

For 2022, Malaysia's foreign tourist arrivals may reach 7.8 million people, compared to 26.1 million people in 2019. With the lack of tourists, Malaysia's tourism revenue fell to RM12.7 billion in 2020 from RM86.1 billion in 2019.

Source: https://www.tourism.gov.my/

The share of tourism to the economy fell to 14.1% of GDP in 2020, from 15.9% in 2019, reflecting a RM41.1 billion drop in gross value added. To cushion the impact, the sector relied heavily on domestic travellers throughout 2020 and 2021. The reasons to be less optimistic about a full recovery in the Malaysian tourism sector in 2022 and 2023 include rising costs of transportation and food. 

Meanwhile, the Ministry of Tourism, Arts and Culture (Motac) through Tourism Malaysia (TM) has launched the Tourism Recovery Plan 2022. This is a continuation of the Economic Stimulus Package.

Under land transport, TM has entered a strategic partnership with Express Rail Link Sdn Bhd and Keretapi Tanah Melayu Berhad (KTMB) to offer fare discounts of between RM10 and RM15, which will benefit a total of 64,675 riders in KLIA Ekspres and KTM service.

Under tourism associations, TM is collaborating with Malaysian Inbound Tourism Association, Malaysian Inbound Chinese Association, Malaysian Chinese Tourism Association, Malaysian Indian Tour and Travel Association and Bumitra Malaysia in offering various domestic travel destination packages by registered travel agents through the Shopee e-marketplace app.

A RM100 discount will be given to Malaysians buying travel packages between April 29 and Oct 31 and valid for travel until the end of this year. The target is to attract 14,935 Malaysians to spend about RM3 million through Shopee Pay on domestic holiday packages.

We need to develop a new unique selling proposition and examine new markets, as China follows its zero-tolerance Covid policy. Hotels, restaurants and tour operators are all impacted by the slow recovery of the tourism sector. Thailand expects only 20% of its pre-Covid tourist levels for 2022. But they are focused on higher-spending tourists rather than volume. Should we re-shape our Tourism Recovery Plan?

Source: https://www.bernama.com

References:

CGS-CIMB: Malaysian tourism sector to fully recover in 2024, Hailey Chung, TheEdgeMarkets, 3 June 2022

Realising potential of domestic tourism, YS Chan, The Sun Daily, 29 May 2022