Published January 13, 2009

Malaysia cuts visitor arrival target by 9%

Promotion spending for Asean to be raised by two-thirds to RM50 million

By PAULINE NG
IN KUALA LUMPUR

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MALAYSIA has cut its 2009 visitor arrival target 9 per cent to 20 million - the first reduction in six years.

It comes after five straight years of expanding targets, with 2008's 22 million arrivals just short of the 22.5 million forecast. Even so, this was 5 per cent above 2007.

More than half of last year's arrivals were from Asean, with Singapore alone accounting for 11 million.

With no sign of an upturn in the global economy, and long-haul travel looking more and more like a luxury, the Cabinet Committee for Tourism trimmed the 2009 target to 20 million arrivals, geared mainly towards Asean, China and India.

With this in mind, the committee plans to increase marketing and promotion expenditure for Asean by two-thirds to RM50 million (S$20.8 million), according to a report in The Star newspaper.

In the past decade, the importance of tourism has grown to such an extent that it is now one of Malaysia's top service sectors and a major money spinner.

In 1998 the sector drew 5.5 million tourists and earned RM8.5 billion in receipts. Except for a blip in 2003 because of Sars, growth has been relatively steady, and by 2007, receipts touched RM46 billion. Should projections run true, they will hit RM50 billion this year.

Recognising tourism's hefty contribution to the economy, allocations to the sector have been rising steadily, from RM700 million under the 8th Malaysia Plan to RM1.8 billion in the subsequent five-year programme that ends in 2010.

The sector's prospects remain bright, notwithstanding this year's projected decline in arrivals.

The Malaysian Association of Hotels has said forward bookings for the first four months of the year 'look very healthy'. It reckons that in the worst-case scenario, occupancy this year will hover around 65 per cent - unchanged from 2008.

Some areas enjoyed improved occupancy rates last year. In the Klang Valley, for example, occupancy was 10 per cent higher. Sabah enjoyed a 30 per cent-plus increase in international tourists and is now short of hotel rooms, with an estimated 6,000 more required during peak periods.

Penang's current manufacturing slump has been offset to some extent by a tourism boom, so much so that the state government is hoping earlier approvals given for four new hotels in the Georgetown World Heritage zone and buffer zone do not fall foul of United Nations height guidelines. Penang will also get a Hard Rock Hotel this year on the bustling beach strip of Batu Ferringhi.

Benefiting partly from Thailand's political woes, Malaysia welcomed a record two million-plus tourists last month. Sustaining the momentum will be a challenge, but it appears the sector is holding up reasonably well.

Budget carrier AirAsia is claiming some of the credit, saying its new routes have attracted thousands of foreigners.