BY MAK KUM SHI AND
asmui@ocision.com
The importance of Malaysia’s tourism industry to the national economy and various industries such as retail, hospitality and real estate are not to be underestimated.
TOURISM in a national context does not exist in isolation. Tourism exists in an ecosystem that affects other factors such as national economies and industries such as retail, hospitality and real estate. In Malaysia’s case, it has benefited from tourism tremendously.
The tourism industry can have a high degree of influence on a country’s economy. The most accurate way to determine the strength of a country’s economy is by measuring the Gross Domestic Product (GDP), which is a primary indicator that is used to gauge a nation’s total economic activity.
Travel and tourism directly and indirectly contributes to the GDP of a country. The direct contributors include accommodation services, F&B services, retail trade, transportation services, as well as cultural, sports and recreational services. If the GDP continues to rise, this would indicate that the economy of the country is in good condition and is moving forward.
According to The Globe Shopper Index Asia-Pacific paper, tourism is growing worldwide and the Asia-Pacific region is no exception. According to the World Tourism Organisation (WTO), tourists accounted for 980 million international trips in 2011, of which 216 million were to Asia-Pacific destinations.
The paper had also cited the importance of shopping, which has not been lost
on tourism authorities. National sales in countries like Singapore and Malaysia are used to entice foreign spending. At the same time, tourism strategies in the region frequently seek to increase visitor spending in stores.
Perceiving the impact of tourism on GDP, the malaysian government had acknowledged the potential of tourism sector as a major source of revenue and a catalyst for the malaysian economic renaissance. Thus, to promote tourism in Malaysia, two government agencies, namely Tourism Malaysia and Malaysia Tourism Promotion Board (MTPB), had been established.
Tourism Malaysia chairman Wee Choo Keong said, “The dynamic shopping scene in malaysia contributes positively to the malaysian economy and this would not have been possible without the effort of all parties, the retail sector, the shopping associations, and everyone who is part of the larger retail and tourism industry.”
“I would like to take the opportunity to share that for the first half of 2015, the total tourist receipts amounted to RM33.8bil, with shopping constituting the biggest share of it of about RM10bil,” Wee added.
According to Tourism Malaysia, Malaysia registered 27.4 million tourist arrivals and RM72bil in receipts in 2014. Tourists spent RM21.6bil on shopping in Malaysia, an increase of 9.3% compared to RM19.8bil in 2013. Total tourist receipts for 2014 were RM72bil, making tourism as the second-largest foreign exchange earner for Malaysia (after manufactured goods).
The Economic impact in Malaysia 2015 by World Travel & Tourism Council reported that the direct contribution of travel and tourism to GDP was RM61bil (5.7% of total GDP) in 2014, and is forecast to rise by 5.6% in 2015, while the total contribution was RM161bil (14.9% GDP) in 2014, and is forecast to rise 5.3% in 2015.
The Malaysia Airports Traffic 2014 from Malaysia Airports Holding Bhd reported a total passenger movements of 83,348,003 in 2014, which include international terminal passengers, domestic terminal passengers, and transit passengers. This showed an increase of 4.7% from 2013, which recorded a total passenger movements of 79,587,084.
Driving the tourism ecosystem
According to Tourism Malaysia official website, they aim to promote malaysia to become an outstanding tourist destination by presenting Malaysia's unique wonders, attractions and cultures. Their ultimate goal is to see a rising number of foreign tourists to Malaysia and a longer average length of stay, which in turn will boost Malaysia's tourism revenue.
The scenic view from the chalets at Pangkor Laut Resort.
In 1999, Malaysia's tourism board came out with one campaign called “Malaysia Truly Asia”. It succeeded in bringing over 7.9 million tourists into malaysia and receipts of around RM12.3bil revenue. The revenue and tourist arrival number kept increasing year-on-year.
Recognising the potential of the retail sector to further boost tourist expenditure in the country, Tourism Malaysia formed Secretariat Shopping Malaysia 12 years ago in 2003 to streamline all efforts in intensifying the development of the shopping sector as a major component of Malaysia’s tourism economy.
One of the early initiatives was to increase the annual nation-wide mega sales Carnival from once a year previously, to thrice yearly to spur shopping in malaysia. The three national level annual campaigns are the 1Malaysia Grand Prix Sale in march, 1Malaysia Mega Sale Carnival from June to september, and 1Malaysia Year-End Sale from November to January.
These mega shopping seasons lure shoppers with marked-down prices, huge range of products, including duty-free goods, as well as value buys and numerous promotional activities.
Shopping Malaysia eventually became a recognisable brand associated with top-notch shopping. It is promoted in the country and overseas through all Tourism Malaysia’s offices, as well as through various online marketing platforms, including websites and social media, that reach out to a worldwide audience. Tourism missions, dialogues and meetings, at national and international levels, encompass the promotion of Shopping Malaysia.
These are part and parcel of strategies under the Malaysia Tourism Transformation Plan 2020 towards 36:168, which positions the Ministry of Tourism and Culture at the forefront to encourage innovation and creativity, to achieve the target of 36 million tourist arrivals and RM168bil in receipts by 2020.
The inviting grand entrance of one of the renowned hotels in Kuala Lumpur city centre.
“The government authorities have worked hard with many malls to position the nation as a shopping destination for over 10 years. The Malaysian Mega Sales, Year End Sales and GP Sales are amongst the initiatives of partnership, where the government encourages retailers across the nation to hold simultaneous sales across the country,” said Sunway Bhd property investment division managing director Datuk Ngeow Voon Yean.
Stimulating travel business
Malaysian Association of Tour and Travel Agents (MATTA), a leading organisation, has also helped in promoting the interests of the travel and tour industry in Malaysia. The group facilitates its members to do business by organising a variety of events.
Apart from the well-known MATTA Fairs that are conducted bi-annually in Kuala Lumpur and many other state Chapters, MATTA also organise B2B sessions to promote domestic tourism, training seminars for cruises, and more.
The MATTA Fair was packed from day one to day three. (MATTA Fair 2015 at PWTC, Kuala Lumpur.)
MATTA official mentioned that there’s not much significant difference between the number of people who choose to travel locally, and the number of people who opt for overseas trips.
The main point to look at is in the “why” they chose that particular location: business, education, visiting family members or friends. If one is interested in new sights and sounds, or even just for a relaxing holiday, there are plenty of options to choose from, both locally and overseas.
Normally, the younger generation is more prepared to go through the hassle of checking in and out at airports and spend more time on their feet, so they would usually choose a more vibrant and adventurous journey.
The older generation, on the other hand, would usually prefer a location where they can relax and unwind, in order to enjoy a better quality time.
Contributing to the hospitality industry
Sunway Bhd property investment division managing director Datuk Ngeow Voon Yean.
According to Ngeow, tourism has a direct impact on the hospitality business in Malaysia. He cited that the largest portion from the direct contribution of travel and tourism to GDP went to accommodation. “Tourism receipts help us grow and continuously improve the Group’s hospitality businesses, and thereby solidify our offerings to visitors from around over the world.
“Next year, for instance, we will have an exciting year ahead as we plan to open the 401-room Sunway Pyramid Tower West early next year, which will be connected to the expanded section of Sunway Pyramid. Under our Asset Enhancement Initiative, Pyramid Tower East will undergo major refurbishment next year, to be transformed into a four-and- a-half-star hotel in February 2017.
“The main Sunway Resort Hotel & Spa will also undergo a transformation into a brand new international five-star hotel. By 2018, we will be the largest and most integrated hotel development in the Klang Valley, prepared to support the nation’s tourism aims with over 2,400 rooms in the region.
“In addition, tourism receipts also help us innovate and pursue service excellence
in human capital development. One of the major drives in our hotel is customer- centricity. An example of this is how we are currently customising our services to meet the demands of travellers from our main markets.
“For instance, we bring in Arabic translators to assist our guests and have two Middle Eastern chefs in The Resort Café to serve F&B options, which are favourable to them. We are also personalising our services for tourists from China with additional well- trained Mandarin-speaking personnel at our hotel,” Ngeow explained.
Shopping destinations and zones
It is noteworthy that certain shopping destinations and zones have been earmarked for development. Such developments can potentially stimulate economic activity and also impact retail real estate values.
According to Tourism Malaysia, several clusters of major shopping destinations have been identified for high-impact development under the Tourism National Key Economic Areas (NKEA) strategic plan. The destinations are the Klang Valley (covering Kuala Lumpur and Selangor), Penang, Johor, Malacca, Kota Kinabalu, Labuan, Kuching, Miri and Langkawi.
In addition, Extended Shopping Zones with attractive shopping attributes have also been earmarked for development and promotion along with the major shopping destinations.
The Extended Shopping Zones are Jalan Tuanku Abdul Rahman Heritage Shopping Zone, Kuala Lumpur (private sector participation in this area is driven by the Batu Road Retailers Association or BARRA, representing some 300 businesses at Jalan Tuanku Abdul rahman); Bandar Utama, Bandar Sunway, Subang Jaya and Mutiara Damansara, Selangor; George Town, Penang; Malacca; Johor Bahru, Johor; Kota Kinabalu in Sabah; and Kuching and Miri in Sarawak.
A leading travel and shopping destination
The fact that Malaysia had won several leading tourism awards and leads in international shopping destination rankings should not be taken lightly.
Malaysia has led winners at the World Travel Awards Asia & Australasia Gala Ceremony 2015 in Hong Kong. Tourism Malaysia was recognised as Asia’s Leading Tourist Board, while Malaysia itself took the title of Asia’s Leading Destination.
Other accolades for Malaysia includes Pangkor Laut Resort and One World Hotel, which have taken the titles of Asia’s Leading Wedding Venue and Asia’s Leading Meetings & Conference Hotel respectively.
The official portal of ministry of Tourism and Culture Malaysia stated that Malaysia was placed as the 11th most visited country in the world in 2014 by World Tourism Organization (UNWTO), and as the most halal/muslim-friendly holiday destination for five consecutive years from 2011 to 2015 by CrescentRating’s Halal Friendly Travel (CraHFT).
Wee said, “We are also excited to be recognised as a top-notch shopping destination. Recently, Malaysia secured the second-top position as the Best Shopping Destination 2015 in the Muslim Travel Shopping Index by CrescentRating and MasterCard.”
“The global news network CNN ranked Kuala Lumpur as the world’s 4th Best shopping City, after New York, Tokyo and London, for two consecutive years in 2012 and 2013. The Geneva-based Globe Shopper Index ranked Kuala Lumpur as the second- best shopping destination in Asia Pacific 2012,” Wee added.
The index’s Asia-Pacific paper stated that Kuala Lumpur rarely finished first on individual index indicators, and its best category score is second. Although seldom leading, it is consistently strong, being the only city to finish in the top 10 in every category.
The city’s specific strength is the ability to combine low prices with a good range of products in a large number of stores, including three of the world’s 10 biggest shopping malls. Such malls include 1 Utama, the world’s fourth largest, which boasts its own rainforest with 100 varieties of flora and fauna.
Brilliant, sparkling Christmas decorations adorn the main entrance to Pavilion Kuala Lumpur along Jalan Bukit Bintang..
From high-end fashion of Bukit Bintang and KLCC areas to street market like Central Market and Petaling Street, Kuala Lumpur is the perfect place to experience city’s shopping scene in Malaysia.
Sunway Pyramid, which is located in Sunway Resort City, is one of the best- known tourism destinations within the region. The synergistic integration of their hospitality, multi-park attractions and retail components, offers tourists a convenient place to play, shop and stay, all within a safe, and connected township.
“In the Globe Shopper Index, Sunway Pyramid was highlighted as one of the main retail attractions for our themed architecture, themed precincts and our ice rink. The recognition has affected us positively as the ranking created a halo effect for the entire tourism and retail industry,” said Ngeow.
“Shopping is a major activity for tourists as our goods here are comparatively cheaper or more affordable than their home country, as well as other parts of Asia such as Hong Kong, Seoul, Tokyo and Singapore. They may not make the bulk of the retail purchase, but depending on malls, the percentage of retail purchase by tourists could be as high as 30%,” he added.
Pavilion Kuala Lumpur, the defining authority in fashion, dining and urban leisure
In the case of Pavilion Kuala Lumpur, it is the first mall in Malaysia to showcase the luxury duplex retailing concept that boasts an excellent tenant mix of over 550 stores, 20% of which are new brands to Malaysia.
As the defining authority in fashion, dining and urban leisure, Pavilion Kuala Lumpur has brought about retail innovation and excellence since its opening in 2007. The mall also presents some of the city’s most exciting fashion festivals, launches and signature events.
“With Kuala Lumpur being ranked as the second best shopping city, Pavilion Kuala Lumpur, and the surrounding malls can expect to receive more tourist shoppers, which in no doubt will boost the retail businesses in the mall,” said Pavilion Kuala Lumpur CEO of retail Joyce Yap.
A tourist looking at the little festive gifts offered in Pavilion Kuala Lumpur.
“Retail brands located in the city centre are affected more by the ups and downs
of tourism in Malaysia because the area is most concentrated with international hotels, notably Pavilion Kuala Lumpur where 30% of its shoppers are tourists.
“With the strong presence of tourism, retailers in malaysia will enjoy healthier revenues, which in turn will boost the overall economy. A healthy and stable economy will make Malaysia as an attractive country for foreign investors who will bring about growth in the country’s real estate value,” enthused Yap.
In conclusion, it is clear that tourism has a positive impact on Malaysia’s economy and industries. This in turn benefits various stakeholders in such industries.
