Take A Tour

The government is using the Malaysia Tourism Transformation Plan 2020, a part of the wider Vision 2020, to develop the tourism sector as a whole and increase both tourist arrivals as well as tourist receipts.

Malaysia has set out a number of goals to maintain the impressive growth and investment experienced in the tourism sector over the last few years. Through the Malaysia Tourism Transformation Plan 2020, an eight-year strategic plan started in 2012, the government is aiming to attract 36 million visitors with an annual receipt of MYR168 billion. For 2016, the target was set at 30.5 million visitors and tourist receipts of MYR103 billion. This marked a slight increase on the 2015 figure of 25.7 million visitors; however, it represent quite a significant increase on 2015’s tourism receipts of MYR69.1 billion according to Tourism Malaysia, which is a part of the Ministry of Tourism and Culture. In 1H2016, government statistics showed that the country was on track to achieving its short-term targets with a little over 13 million people visiting the country compared to 12.5 million in the same period the year before. The ASEAN region plays an important role in the country’s tourism sector and accounted for 75.7% of arrivals in 1H2016. Singapore was the largest single contributor with 6.59 million tourists making the short trip over the border. This was followed by Indonesia in second place with 1.37 million tourists and China in third place with 992,463 tourists heading over to Malaysia.

Going forward, it is expected that China will start to make up a larger share of annual visitors. During Chinese New Year, it is predicted around 150,000 visitors made the trip to Malaysia, which would be a 30% increase on the previous year’s New Year celebrations. The visitors come not just for the actual day, which fell on January 28 in 2017, but arrived up to a week before the big day and hotels in Sabah were fully booked for months. Both governments are making a concerted effort to increase the number of Chinese tourists heading to Malaysia, with the Secretary General of Malaysian Inbound Tourism Association (MITA), Y.H. Lee, predicting that in 2017 around 4 million Chinese tourists will head to Malaysia. Demand is already increasing with many charters flights to Penang, Pulau Langkawi, Pahang, Perak, Johor, and Sabah experiencing increased demand. The demographics and income levels of the Chinese traveler has changed. Trends for Chinese visitors, like much of the world, are moving away from package-tours and the stereotype of the large group of Chinese tourists for more tailor-made, individual trips focused more on the experience rather than the material goods, which are increasingly available in Chinese cities anyway. A survey by found that 75% of Chinese tourists had made independent travel arrangements in 2015 and were seeking a much broader set of experiences for their travel activities, such as eco-tours and local dining rather than a busload of tourists all visiting the same destination.

Along with visitors, the government is looking to attract more investment to the sector. The Middle East is naturally a prime location to try and pull in both tourists and investment. Many in the Middle East see Malaysia as a family-friendly destination for a holiday due to the cultural similarities and sensitivities to the Muslim faith. A major investor in the tourist sector in Malaysia over the last few years has been Qatar. Currently, it is estimated that Qataris have around USD15 billion invested in projects in Malaysia with an aim to develop the growing industry, according to the Qatari Ambassador to Malaysia Ahmad Jazri Mohamed Johar. Malaysia has become a popular honeymoon destination for Qataris; hence, the Qatari government is making efforts to increasing awareness of the investment opportunities in the sector, especially in the state of Kedah, which is one of the most popular destinations for Qatari visitors. For investors, there are a number of major infrastructure projects in the pipeline, especially in transport. Over the next couple of years, the Malaysian government is looking to invest USD15 billion in a new mass rapid transit project on top of the high-speed rail between Singapore and Malaysia. The new rail link will span 400km and shorten travel time between KL and Singapore to just 90 minutes, which is certain to draw in an increased amount of tourists.

The government sees tourism as an integral part of the economy going forward, with the Malaysia Tourism Transformation Plan 2020 leading the way. Part of the wider Vision 2020, the plan sets out a number of strategic targets to keep the sector moving forward while also creating a competitive and attractive sector for investors and tourists alike. Vision 2020 hopes to turn Malaysia into a high-income nation, and part of this will be expanding the tourism sector. The plan has set a goal of 36 million annual tourists and an annual receipt of MYR168 billion. The targets are not as unattainable as first imagined. The Asia Pacific region is expected to lead global tourism growth and will expand by 4.9% annually according to the UNWTO. In light of this, the Malaysian government has doubled down on its commitment to growth by quadrupling the Ministry of Tourism and Culture’s 2015 budget compared to MYR1.2 billion. Included in the budget was an extension on a tax exemption for tour operators, which will continue until 2018. Malaysia is in a strong position to maintain its growth over recent years including visitors, investment, and tourist receipts. Due to a weak ringgit compared to region currencies, holidays in Malaysia are relative cheap for tourists.

To help meet its targets, the government has made long-term investments to develop its ports and shoreline infrastructure to cater to the lucrative market of the cruise industry, especially affluent Chinese tourists. The top 10% of Chinese traveler vastly outpaces their middle-class counterpart, spending on average USD2,225 per day, according to a report by the Chinese International Travel Monitor (CITF). The affluent tourists spend much of their money on accommodation and shopping. Much of the development in the tourism sector is aimed at this segment of luxury and business travellers. Between 2015 and 2018, over 5,000 upscale rooms are expected to open up in KL, with 1,700 in Penang and 1,500 in Langkawi. Even a small increase in this segment could have a significant effect on tourist receipts; hence, the sudden shift in focus to increase the numbers in this segment.

Malaysia has made some positive steps in developing its tourism sector, along with much of the region. Malaysia faces some tough competition from its neighbors, with Thailand, Indonesia, and Singapore close competitors. KL also has stiff competition, with Bangkok, Seoul, and Tokyo ranking above KL in terms of tourist revenue generated according to a survey conducted by MasterCard. In terms of its new target of the wealthy Chinese tourist, then Australia, Japan, Hong Kong, and South Korea are high on the list of top destinations and Malaysia still has some work to do in order to push itself into that group. The Malaysian tourism sector is certainly well positioned to take advantage of the current weak ringgit as well as the strong growth in the Chinese market. On top of this, it has the ability to tap into the Middle East to bring in fresh investment as well as more affluent tourists. Still, to achieve the 2020 targets the sector must look to cater to many types of tourists and maintain a diversified attraction so it does not become too dependent on one small segment.

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