No immediate recovery for tourism sector

Workforce and cost of operations will be a major concern for tourism and hospitality moving forward


THE tourism industry recovery is expected to take up to three years to reach pre-pandemic level, Malaysian Association of Hotels CEO Yap Lip Seng said.

Ahead of borders reopening on April 1, the industry also anticipates locals opting to travel overseas instead of domestic, he said, thus the domestic travel demands need to be balanced with the influx of international tourists.

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Yap said full recovery must be driven by corresponding intensive tourism marketing to put Malaysia on the world tourism map again which would include strategic and targeting marketing to high yield markets as well as incentives for stakeholders to drive arrivals.

“The hospitality industry worldwide has been badly impacted by the pandemic losing talents at all levels and it is worse here in Malaysia due to lack of financial support to retain its people over the past two years.

“It will continue to be an ongoing issue as we enter recovery mode but the positive news of borders reopening will boost confidence in the industry and encourage people back into hospitality careers,” he told The Malaysian Reserve (TMR).

Yap said cost of operations will be a major concern for tourism and hospitality moving forward as we return into full operations. Items such as electricity will be a burden for hotels with the increased tariffs, and the impending implementation of new minimum wage will further hamper the industry’s recovery.

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“At industry level, we see the need for a strategic marketing plan for Malaysia and in competition with neighbouring countries that have been aggressive in attracting tourist arrivals.

“Malaysia had been historically focused on tourist arrival numbers with almost half of it attributed to one single source country (Singapore) and this needs to be expanded to more high yield markets. Overall tourism management needs to be more competitive,” he added.

He said Malaysia has always been a popular nature tourism destination but there are potentials for other markets such as business and business events, culture as well as culinary.

“For the reopening of borders, we will likely expect pent up demand targeting islands and beach destinations,” he said.

Read more: Pahang targets more than 8m tourists on border reopening

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid thinks rebound to pre-pandemic is quite likely but a sense cautiousness among the travellers and Malaysians will continue to prevail.

“I suppose the trajectory for tourist arrivals will be much better than the past two years. In 2019, tourist arrivals stood at 26.1 million and it fell dramatically to 4.3 million in 2020 and 100,000 in the first nine months of 2021.

“Perhaps, tourist arrivals could reach half of the 2019’s figure which is about 13.05 million. This is very much compared to 2020 and 2021 if it materialises,” he told TMR.

He said likewise, the aviation sector will benefit from the reopening of the international borders.

“In 2019, passenger traffic at Malaysian airports stood 105.3 million passengers while in 2020 and 2021, the statistics collapsed to 25.8 million and 10.7 million, respectively. The latest number that we have for January 2022, it was showing at 2.74 million which is way higher than 759,000 in January 2021.

“That represents a whopping 262% jump in passenger traffic at the airport during January alone. Of course, this has been supported by domestic passengers which accounted for 90% of total passenger traffic. But again, both international and domestic passengers’ traffic have recorded substantial growth of 183% and 273%, respectively,” he said.

Meanwhile, Malaysian Association of Tour and Travel Agents treasurer Nigel Wong said reaching pre-pandemic levels may still take a bit of time because the trade is still cautiously optimistic given the current uncertainties and various other global factors that potentially impact the cost of travel.

He said the World Tourism Organisation has indicated that most tourism professionals only see a rebound in 2023.

Manpower is still a problem as many former tourism professionals have taken to doing other forms of work during the crisis with some may not return to the trade, said Wong.

“The current rise in the cost of living due to factors caused by the pandemic and the recent turmoil caused by the Ukraine-Russian conflict will make travel more challenging.

“Other factors include the various restrictions and associated costs imposed on travel by certain countries which will cause travellers to rethink travel to those destinations and for some, maybe discourage them from traveling at all,” he told TMR.