With international travel cut off, industry sees domestic tourism as lifeline and route to recovery

KUALA LUMPUR (March 11): With tourism receipts down 85% in 2020 in tandem with the drop in international tourist arrivals, industry players see the domestic market as its lifeline and route to recovery.

Malaysian Association of Tour & Travel Agents (MATTA) President Datuk Tan Kok Liang opined that at this juncture, with the current operating conditions in place, domestic tourism will be the main driver of the tourism industry in 2021, and this could be the case until 2023, based on current operating conditions.

He noted that the industry’s recovery is dependent on domestic and global vaccine rollouts, the opening up of inter-state and international borders, as well as a return of confidence for tourists to start travelling again.

“Given that there are so many variables that are up in the air, it is also difficult to forecast which tourism sub-sectors will be the first to emerge and mount a recovery from the pandemic,” said Tan.

Tan stated that following the Global Financial Crisis in 2008, leisure travel rebounded faster than corporate travel. As such, he viewed that the government should look at prioritising the leisure market first, as part of its plan to revive the Malaysian tourism sector. He added that the sector on the whole has a great multiplier effect, and thus needs to be given priority in the nation’s economic recovery plan.

Malaysian Association of Hotels (MAH) chief executive officer (CEO) Yap Lip Seng said, “With the first quarter as good as gone, and no signs of international tourism at least till 2022, the industry is not expecting any improvements, and instead anticipates 2021 to be worse than 2020.

He said that domestic tourism will still be the sole focus and lifeline of the industry, highlighting that the industry is hoping for a return in business events and domestic corporate travels. He shared that the second quarter of 2021 (2Q21) will likely see pent up demand driving domestic leisure travel and that it would contribute to selected beach, island and highland destinations.

He noted that tourist arrivals and spending could see a recovery in 2025, based on the progress Malaysia has made, but this is also subject to government initiatives to bring about a recovery in the industry, domestically and internationally.

Emir Research’s analyst Amanda Yeo pointed out that the continuous closure of international borders will result in the tourism industry taking its time to recover from the crisis. She pointed out that while vaccine rollouts do provide an opportunity for recovery, it will take months or even years for some countries to achieve herd immunity.

Nevertheless, she believes that the industry will fare better in 2021, with domestic tourism driving growth.

“A key factor in ensuring the continued recovery of the tourism sector is for the travel operators to ensure that tourists keep observing the SOPs with regards to putting on a mask whenever they are in public, observing physical distancing and avoiding crowded places. So, tourist and travel operators must build in all these simple requirements in all their itineraries and visit schedules,’ she said.

Like Tan, Yeo also believes in the potential offered by eco-tourism, noting that Malaysian players could relook their marketing strategies by promoting rural or agro tourism, adventure tourism, ecotourism, and cultural & heritage tourism.

She said industry players would be able to weather the storm through ticket sales at natural and recreational parks, and museums.  

According to Tourism Malaysia yesterday, Malaysia’s 2020 tourist receipts plunged 85.3% to RM12.69 billion – the lowest since 1998 – from RM86.14 billion a year earlier. This came about as international tourist arrivals fell 83.4% to 4.33 million individuals, from 26.1 million over the same period.

Average per capita expenditure stood at RM2,928, a decline of 11.3% from RM3,300 in 2019.

When contacted, Tourism Malaysia said it could not comment on any forecast for 2021. 

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