TOURISM INDUSTRY IN MALAYSIA : THE EXPERIENCE AND THE CHALLENGE Robiah Hj.

Suratman Department of Land Administration and Development Faculty Geoinformation and Real Estate University Technology of Malaysia, Skudai Johor MALAYSIA.

Introduction Tourism has become one of the worlds largest and fastest growing industries. The tourism industry is globally a rapid growing industry and contributes to the economic enhancement as well as generates employment opportunities, apart from contributes to the development, especially in a developing country like Malaysia. The international tourist arrivals worldwide for the year 2005 was 806 million with Asia Pacific receiving 155 million tourists, and the international arrivals is expected to reach 1.0 billion by 2010 (NMP,2006:199). The rapid growth is seen as a huge potential for further advancement of the industry, and thus strengthening of the nations economy through it.

The Background Malaysia is a South East Asian country which covers an area of about 336,700 square kilometer and consists of West and East Malaysia. West Malaysia is bordered by Thailand to the north, Singapore to the south, South China Sea to the east, and Straits of Malacca to the west. While, East Malaysia shares its southern border with Indonesia, and is cradled by the South China Sea to the west and north, and the Sulu Sea to the northeast. Malaysia is made up of the 13 states, namely Selangor, Perak, Negeri Sembilan, Melaka, Johor, Pahang, Pulau Pinang, Kedah, Perlis, Terengganu, Kelantan, Sabah and Sarawak along with three Federal Territories of Kuala Lumpur, Putrajaya and Labuan. Malaysia's capital city is Kuala Lumpur while the new administrative center is in Putrajaya. With the population of 23 million, which consists of Malays (57%), Chinese (30%), Indians (8%) and indigenous people, Malaysia become an exotic blend of cultures and multiracial population which practices various religions such as Islam, Buddhism, Taoism, Hinduism and Christianity. All this cultures have influenced each other, creating a truly Malaysian culture.

Like other developing countries, Malaysia is rich with diverse natural attractions which become an asset to the countrys tourism industry. This is recognized by the World Travel & Tourism Council (WTTC), who declared Malaysia as; a destination full of unrealized potential with the main strength as the availability of a vast range of diverse attractions to suit all tastes; relatively affordable prices and; largely unspoilt destination (NTP, 2004 : 10). The geographic location of Malaysia, surrounded by sea, has made its rich with surrounding islands attractions in the form of well-preserved nature, white sandy beach, diverse sea creatures and beautiful corals. On the other hand, the larger part of Malaysian land, especially Sabah dan Sarawak is covered with Tropical rainforest which holds hundreds of thousands of animal species, many of which are unique to the region and the world. These include 286 species of mammals, 736 species of birds, 406 species of amphibians and reptiles and more than 100,000 species of insects (The Encylopedia of Malaysia, 1998)

Malaysia is also abound in historical monuments such as old buildings from the era of Portuguese and British colonization, especially in the cities like Kuala Lumpur, Melaka, Pulau Pinang and Taiping. In addition, there are also the remains of ancient settlements like the mousoleum and settlement of Lembah Bujang Kedah and pre-historic cemetery of Gua Niah Sarawak. Malaysia is experiencing a rapid development rate as a developing country, parallel with the nations economic growth. Implementation of large scale projects and of world standard such as the Petronas Twin Tower and Kuala Lumpur International Airport (KLIA) had brought credit to the nations tourism industry. The 88-storey Petronas Twin Tower with the height of 452 meters, is known as the world's tallest freestanding twin tower and serves as a landmark for Malaysia. While KLIA which is capable of handling hundreds of international flights per day, is recognized as one of the best international airports. Other tourism products include leisure and sports- related activities as well as businessrelated events.

Tourism Industry In Malaysia

Tourism industry in Malaysia started from the early 1970s and has become the second highest foreign exchange earner for the country after the manufacturing sector (NTP 2004-2010 Main Report, 2004. pg 9). The sector is predicted to grow at the rate of 6.9% per year and contribute almost RM30 billion to the nations economy (Bernama News, 19 Mac, 2004). In the early growth of the industry, tourism was more focussed at beach resorts as a destination for relaxation. It was in the 1990s that it extended to include other attractions like shopping, events, theme park and nature-based. The main markets for Malaysia tourism are the neighbouring ASEAN countries especially Singapore, Thailand, Brunei and Indonesia. While others include Japan, Hong Kong, South Korea, China, Taiwan, India, United Kingdom, Australia, Canada and the United States of America. The Malaysian tourism industry had undergone multiple challenges before assuming its position in the world tourism destination map, abreast of the other popular destinations worldwide. The unstable world politics, SARS and challenge posed by the other ASEAN countries competing to draw tourists had initiated Malaysia to set its own strategy in diversifying the tourist attractions. Various studies were undertaken to identify the tourism demand characteristics and international trend apart from define the potential products to be promoted. As such, Malaysia had increased the tourism promotions, arranged various programmes and events, as well as diversified and upgraded the tourism-related facilities. Malaysia Truly Asia is the tagline which is internationally recognized as a uniquely Malaysian brand to promote tourism in Malaysia. The branding first established 1999 had also played a major role as the marketing strategy to highlight the Malaysia unique characteristics. The uniqueness portrayed through Malaysia Truly Asia is the diversity of tourism products offered which comprise almost all of the attractions that exist in the other Asian countries. Greater emphasis was placed on attracting tourists from the shorthaul and regional markets of ASEAN, China, India, Japan and West Asia.

Tourism Promotion Programs In Malaysia and the Achievements

Visit Malaysia Year Campaign Visit Malaysia Year Campaign which was started in 1990 became the starting point for the expansion of the countrys tourism industry. It succeeded in attracting around 7.45 million international tourists (Rajah 1) compared to 4.85 million in the previous year. Due to the success, the Visit Malaysia Year Campaign was repeated in 1994 and 2007. Visit Malaysia Year 2007 was launched in conjunction with the celebration of 50 years of Malaysian independence, whereby 240 events and festivals were organized throughout the year. These include the floral festival, cultural performances, Kuala Lumpur International Arts Festival, National Water Festival, Colours of Malaysia, Penang International Lantern Festival, Gawai Dayak and Borneo cultural festival, Colour and Flavours of Malaysia parade and World Firework Competition. With the variety of events

and festivals, Malaysia was able to increase tourist arrivals to the country up to 20,100,00 in the year 2007 alone (www.tourism.gov.my/statistic). With the Visit Malaysia Campaigns, Malaysias arrivals are expected to breach 24.6 million by 2010, with tourism receipts close to RM60 billion or US$17 billion.
25000000 20000000 Tourist 15000000 10000000 5000000 0 2002 2003 2004 2005 2006 2000 1990 1992 1994 1996 1991 1993 1995 1997 1998 1999 2001 2007

Year

Sources : MOTOUR, 2005. and (www.tourism.gov.my/statistic). Figure 1: Tourists Arrival 1989 2007

Encouragement for private investment in the tourism industry The involvement of private sector through investments in tourism related activities has also influenced the healthy growth of the industry. To encourage more investments from the sector, Malaysian government had prepared incentives in the form of financial funding, whereby two special funds were launched in 2001, namely the Tourism Infrastructure Fund (TIF) and The Special Fund for Tourism and Infrastructure. Major projects under these funds included resort development, renovation and refurbishment of hotels as well as provision of related infrastructure and services. Investments by the public sector are to support works related to improvement of public amenities, upgrading and beautification of selected tourism sites, as well as restoration of historical building and sites. Continuous initiatives and incentives by the government has increased the Hotels 2,500 confidence of the private sector to 2,000 continue investing in tourism-related developments. This is demonstrated 1,500 through the increase in the number of 1,000 hotels by 51.2 per cent from 1,492 in 500 2000 to 2,256 in 2005, while the supply of 0 Year 2000 2005 hotel rooms rose by 37.3 per cent from 124,413 in 2000 to 170,873 in 2005. Travel and Tour agencies increased substantially from 1021, in 2000 to 2,383 in 2005 and licenses issued to tour coach and car rental operators increased from 18,406 in 2000 to 20,610 in 2005 (Nine Malaysia Plan, 2006:195).

Hosting of International Anchor Events The involvement of a country as the venue for international events as well as organiser of meetings, conventions and exhibitions is seen as a huge potential for generating high economic return in the tourism sector. It could also indirectly attract foreign visitors either as delegations, participants, supporters, teams or audiences and bring in high spending business travellers that are willing to spend big on facilities such as accommodations, services and high quality products. Realising the potential, Malaysia had invested a huge sum to provide for the required facilities. Among the projects undertaken are developments of convention centers like the Kuala Lumpur Convention Center, Putrajaya Convention Center, Sepang International Circuit which feature Malaysia as host to Petronas Fl Grand Prix and Malaysian World Motorcycle Grand Prix. In addition are hotels of 5-star standard, also equipped with the necessities for organising international conventions and exhibitions. While events that mark Malaysia as one of the destinations in their calendars each year include International Regatta, Le Tour de Langkawi, World Amateur Inter-Team Golf Championship, F1 Powerboat World Championship Malaysia Grand Prix, Langkawi International Maritime and Aerospace (LIMA) and Rainforest world music festival. Based on the statistic by Ministry of Tourism, from the year 2001 to 2005 alone, Malaysia had been the host to a total of 48,751 international and national events and entertaining 16,538,496 participants with the total earnings of 20.61 billion (Table 1). Table 1 : Meeting, Conventions and Exibitions 2001 -2005
Indicator Number of Events International National Total Number of Participants Foreign Local Total Revenue (RM billion) Foreign Local Total 2001 925 2775 3700 2002 2956 8868 11824 2003 2294 6882 9176 2004 2875 8625 11500 2005 3230 9321 12551 2001-2005 12280 36471 48751

473486 3189360 3662846

699924 3288000 3987924

550741 3390000 3940741

675699 3494000 4169699

775286 3602000 4377286

3175136 16963360 20138496

1.23 1.98 3.21

2.03 2.04 4.07

1.73 2.10 3.63

2.14 2.17 4.31

2.95 2.24 5.19

10.08 10.53 20.61

Source : Ministry of Tourism, NMP, 2006.

Promoting Malaysia as a Shopping Destination Turning Malaysia into one of Asians favourite shopping destinations or the Asia gateway, is also among the strategies adopted to strengthen the tourism industry. This include rapid development of distinguished shopping malls such as Suria KLCC, Pavilion, Star Hill, Mid-Valley, AEON and so

forth which offer variety of products and brands from all over the world. Among the programs undertaken include the annual Malaysia mega sale carnival and Year End Sale to encourage tourists to shop in Malaysia. Within the carnival periods, shoppers are awarded various discounts, special offers and incentives. While programmes such as special visitors incentive programmes are particularly set for tourists by several shopping malls and retailers like Isetan KLCC, Suria KLCC, Metrojaya Department Store and Parkson whereby tourists can enjoy great discounts rebate on normal price.

With over 220 shopping establishments in Malaysia, the diversity of merchandise available during the sale ranges from fashion, accessories, jewellery, sophisticated electrical and hi-tech equipments and handicrafts.

Malaysia My Second Home Program The Malaysia, My Second Home Program was also one of the program adopted to promote Malaysia and encourage foreigners to own properties and live in Malaysia. This Malaysia, My Second Home Program evolved from the Silver Hair program, which the government introduced in 1996 to convince foreign retirees above 50 years of age into making Malaysia their second home. The program adopted to encourage foreigners, their spouses and dependants to choose Malaysia as their second home, had attracted a total of 7,308 participants during the year 2000-2005. The program was most popular among citizens from China comprising 24 per cent of the total, followed by Bangladesh at 15 per cent, Britain at 8 per cent and Singapore at 6 per cent (www.tourismmalaysia.gov.my ).

Program For Domestic Travellers The tourism industry is still largely supported by domestic travellers. Due to that, Malaysia Tourism has accelerate its promotions and actions to encourage domestic tourism, where people are encouraged to take local holidays through campaigns such as Cuti-cuti Malaysia and the issuing of good value packages. These campaigns had contributed to the strong growth of domestic tourism for the last few years, whereby it has grown faster than the international tourism. The number of domestic tourism trips increased by 30.1 per cent from 12.3 million in 2000 to 16.0 million in 2005. The number of domestic hotel guests more than doubled from 13.6 million in 2000 to 29.0 million in 2005. (Nine Malaysia Plan, 2006:194). The introduction of low-cost carriers (LCCs) which provided for more affordable air travel to various local destinations, especially Sabah and Sarawak, further contributed to the growth of local travel and tour.

Increased promotions such as the Malaysia Fest, shopping carnivals, colours of Malaysia and Cuti-Cuti Malaysia and the development of tour packages by Malaysia Airlines (MAS) and Malaysia Association of Tour and Travel Agents (MATA) have also added to the domestic tourism growth (Nine Malaysia Plan, 2006). The implementation of the fiveday work week for the public sector, beginning July 2005, had also given a boost to domestic tourism. With all the efforts either from the Government or the private sector, during 2001-2007 alone, foreign tourist arrivals increased at an average rate of 10 per cent per annum and reached 16.4 million in 2005 and 20.1 million in 2007. At the same time, Malaysia has the highest return on investment (ROI) compared to seven other countries in the region and earned USD 36.4 for every USD the government spent. The ROI based on Capital Investment (public plus private sector spending) showed that Malaysia had the 4th highest ROI and earned USD1.65 for every USD the government and private sector spent.

The Challenge The growth trend of the tourism sector in Malaysia especially for the past 10 years carries a good sign that it will continue to grow in this upcoming years based on the projection made by WTO. However, Malaysia could not rely solely on the current trend of foreign arrivals as factors such as the changing tourists needs and other Asian competitors are among challenges that need to be confronted to further empower the industry. This is crucial if the desire to become the ultimate tourist destination in Asia is to be realised. Based on research globally, new tourism is beginning to take up the demand characteristics such as quality products and experience, free and independent travellers (FIT) as opposed to mass tourism, use of new technologies in information seeking and distribution, maximise yield not volume, environmental concern and protection and direct marketing. Thus, Malaysia has to think of a way to enhance the tourism industry in the future in order to remain competitive and ensure what it offers fulfil or suit the global demand of the tourism industry.

Conclusion The tourism industry represents a very broad domain and could become one of the main sources of economic development and growth for a country. As for Malaysia, tourism related business and activities are growing rapidly. However, more organized and effective strategies are needed to ensure that all the tourism products that had been or to be introduced are well- promoted, marketed and handled. The trend toward green tourism and demand for quality tourism should also be taken into account to ensure the current tourism products could sustain and continue to generate economic return in the long run.

REFERENCES Abdul Aziz Hussin , 2007. Aspek Undang-undang Pelancongan di Malaysia. Dewan Bahasa Pustaka. Kuala Lumpur. City Hall of Kuala Lumpur, 1995. Pictorial Book of Kuala Lumpur. National Tourism Plan 2004-2010 Main Report, 2004. Ministery of Tourism, Malaysia Nine Malaysian Plan ,2006. Chapter 8 : Realising Tourism Potential. Malaysian Government. The Encylopedia of Malaysia, 1998. Volume 1 : The Environment. Archipelago Press. Kuala Lumpur Tourism Malaysia, 2007. Promotional Plan 2008-2009. Kuala Lumpur. Yahaya Ibrahim, 2008. Pelancongan Malaysia: Pembangunan dan Pemerkasaan Penerbit Universiti Utara Malaysia. www.tourismmalaysia.gov.my access on 16th July 2007.