Tourism remains Malaysia’s star performer

KUALA LUMPUR – Malaysia will bank on tourism to play an integral part in boosting the country’s economy and coffers in the coming years.

With this in mind the government allocated a whopping RM858 million (US$ 373 million) in its Budget 2008 to enhance the country’s attractions, diversify the tourism products as well as upgrade the tourism facilities.

In presenting the Budget last Friday Prime Minister Datuk Seri Abdullah Ahmad Badawi also gave a leg up for homestay by allocating RM22 million to increase such activities in 47 selected villages. In addition, the development of ecotourism projects will be undertaken to generate income for the rural community, including Orang Asli.

The Malaysia Economic Report 2007/2008, released on the same day as Budget 2008, attested to the bright future of the tourism industry. It projects tourist arrivals to increase to 21.5 million next year, raking in RM49 billion, contributing 7.2 per cent to the Gross Domestic Product (GDP with the continued aggressive and focused promotional programmes.

By 2010 the number of tourist arrivals could increase to 24.6 million, generating receipts totalling RM59.4 billion and providing 520,700 jobs.

With the Visit Malaysia Year (VMY) 2007 campaign being well received as reflected in higher tourist arrivals in the first six months of this year, the Treasury estimates the gross receipts to expand further and contribute 7.1 per cent to the GDP this year.

The bulk of the tourists is expected from ASEAN countries, followed by Japan, China and Australia.

The industry’s gross receipts have been steadily increasing at an average rate of 14.1 per cent a year between 2000 and 2006.

Tourist spending remains the main contributor to earnings in the services account, generating 45.3 per cent of gross receipts on an annual basis.

The Treasury said travel outflows are also on the rise as more Malaysians travel abroad for business, leisure, education, health and pilgrimage.

Strong tourist spending had cushioned outflows in the services account as reflected in the higher net inflows posted over the period.

Net inflows doubled from RM11.2 billion in 2000 to RM23.5 billion in 2006, significantly improving the deficit in the service account.

In addition to the VMY campaign, the Treasury said the government was embarking on a number of strategies to raise Malaysia’s image as a premier, quality and value-for-money destination.

The focus will be on quality to change the present composition of tourist arrivals by giving more attention to the long haul and higher-yield segments.

To achieve this, the private sector is expected to come up with more interesting, creative and value-for-money products, especially in the development of niche products, and to raise service standards and quality to meet the demands of high-end tourists, it added.

The Malaysian travel industry welcomed the good news, adding that the allocation would further boost Malaysia’s lure as the region’s leading tourist destination.

Ngiam Foon, President of the Malaysian Association of Tour and Travel Agents said with upgraded facilities, such as better information counter, Malaysia would be able to attract more tourists.