As the pandemic struck, there was an 83.4% decline in international arrivals to a mere 4.3m people in 2020 

by JUNE MOH / pic MUHD AMIN NAHARUL

MALAYSIA’S economy is strongly driven by its tourism industry. 

In 2019, the sector contributed to 15.9% of the national GDP, attracting 26.1 million international arrivals and generating US$20.6 billion (RM91.16 billion) for the economy and 3.6 million jobs. 

As the pandemic struck, there was an 83.4% decline in international arrivals to a mere 4.3 million people in 2020. The average hotel occupancy rate also dropped from 64% in 2019 to 32% in 2020. 

Since then, the government has mainly relied on domestic tourists while also implementing exceptions, such as opening the Langkawi tourism bubble for foreigners and initiating the Vaccinated Travel Lane (VTL) for fully vaccinated passengers between Malaysia and Singapore. 

With the full border reopening on April 1, 2022, Malaysia’s tourism industry is on track to recovery. 

Malaysia recorded a welcoming rise in foreign tourist arrivals after the borders reopened. 

The main focus of tourist arrivals in 2023 would be on the domestic, regional and medium-haul markets, says Zainuddin (pic tourism.gov.my)

Tourism Malaysia reportedly was optimistic about achieving the government’s target of attracting 9.2 million foreign tourists visiting Malaysia this year. 

According to Tourism Malaysia DG Datuk Zainuddin Abdul Wahab, Malaysia has anticipated an economic recession that might occur next year; thus, it will focus on specific markets. 

“The main focus of tourist arrivals would be on the domestic, regional and medium-haul markets,” he said. 

Although China was the main contributor last year, it has not opened its borders, so the agency is targeting tourists from other nations such as neighbouring countries and the Middle East. 

In addition, Malaysia is also focusing on “Smart Tourism”, which involves the digitisation and development of smart products and infrastructures, to secure a resilient and sustainable tourism industry against future crises, such as another pandemic. 

According to Monitor Deloitte, the Smart Tourism 4.0 initiative is expected to increase the revenue for Malaysia’s tourism industry fourfold from the current US$25 billion to US$110 billion by 2030. 

To support domestic tourism, the government provided tax relief for domestic travel expenses of up to RM1,000. 

The tax relief for domestic travel expenses has been extended from Jan 1, 2022, to Dec 31, 2022.

• This article first appeared in The Malaysian Reserve weekly print edition