TA Research said despite the recovery in tourist numbers in the first quarter of 2023, Malaysia still appears to lag behind several South-East Asian countries.
PETALING JAYA: The Malaysian government and its related agencies need to intensify efforts to restore the country’s tourism to pre-pandemic levels.
According to TA Research, despite the recovery in tourist numbers in the first quarter of 2023 (1Q23), Malaysia still appears to lag behind several South-East Asian countries.
The brokerage noted that Vietnam, for one, recorded tremendous growth of 72% year-on-year (y-o-y) in tourist arrivals to 4.6 million in 1Q24, with the number surpassing its pre-pandemic levels, while Thailand and Singapore saw their 1Q24 tourist arrivals grow 43.5% y-o-y to 9.4 million and 49.6% y-o-y to 4.4 million, respectively.
As for Malaysia, tourist arrivals rose 32.5% y-o-y to 5.8 million in 1Q24, data from the Statistics Department revealed.
“The 5.8 million arrivals in 1Q24 may not be as rosy as we thought.
“It is still down by 13.2% as compared to the first quarter of 2019 (pre-pandemic level).
“Furthermore, it is lower than the 6.82 million quarterly arrivals needed to achieve the full year target,” TA Research argued.
While the brokerage acknowledged the government had already taken several commendable strategies to boost tourism, much work is still needed for Malaysia to meet its target of 27.3 million international arrivals for 2024, with tourism receipts of RM102.7bil.
“While achieving these goals may be challenging, success is possible if we strengthen our efforts,” it added.
Among the initiatives the brokerage recommended are to enhance marketing and promotion efforts, improve infrastructure and connectivity, simplify visa policies, promote sustainable and eco-friendly tourism, leverage technology and innovation, enhance safety and security and support cultural and event tourism.
For marketing and promotions, TA Research said the focus should be on key markets such as China, India, Europe and Asean.
Customised marketing campaigns that highlight Malaysia’s unique attractions and cultural diversity should be introduced..
“Invest in digital marketing strategies, including social media, online advertising and influencer partnerships to reach a broader audience, particularly younger travellers and digital nomads.
“Also, partner with international travel agencies, airlines and online travel platforms to promote Malaysia more effectively and create attractive travel packages,” it said.
It added Malaysia should expand and improve air connectivity by increasing flight frequencies, establishing new routes and collaborating with international airlines to make the country more accessible to global tourists.
This can be done while enhancing the transportation infrastructure within the country.
Also, TA Research said the government should further liberalise visa policies, simplify and streamline the application process and reduce bureaucratic hurdles to make travel to Malaysia easier.
“Economically, the significance of tourism cannot be overstated.
“This sector serves as a catalyst for job creation, bolstering opportunities across various industries and amplifying the performance of small and medium enterprises,” it said.
Specifically, TA Research highlighted several sectors that would benefit from the tourism boom. These included aviation, construction, consumer, healthcare and property.
“In our forecast, we expect Malaysia Airports Holdings Bhd
’s passenger movements to surpass the pre-pandemic level (105.3 million) to reach 118 million this year before inching higher to 121.5 million next year,” it said.
As for construction, it noted: “With a stronger influx of tourists anticipated this year, this will indirectly stimulate the construction activities as the existing facilities at customs and airports will require refurbishment and upgrades to accommodate the increased flow.”
Notably, it said the Kuala Lumpur International Airport aerotrain replacement project, awarded to the IJM Corp Bhd-led consortium, is slated for completion by January next year. It is expected to commence operations in 1Q25.
“Complementing this, we foresee an escalating demand for local infrastructure to enhance the transit route map.
“This includes a more comprehensive public transport expansion and improved customs check-in facilities.
“As a result, we anticipate an increased incentive to expedite the finalisation of the Johor Automated Rapid Transit project and upgrade the Kuala Lumpur-Singapore border customs facility,” TA Research said.
It said the arrival of tourists would also result in higher spending, benefiting local retailers as well as brewery companies.
Citing the Malaysian Healthcare Travel Council’s 2024 revenue target of RM2.4bil from health tourism, TA Research said this would likely be achieved through higher revenue intensity per patient due to healthcare inflation, gaining market share from Singapore, private hospitals’ active participation in Healthcare Expo (especially in Indonesia) and visa-free entry to China and India tourists.
Meanwhile, TA Research noted that the improved version of the Malaysia My Second Home programme could drive demand for homes, revitalising the country’s property sector, while retail and hospitality related real estate investment trusts would benefit from improved rates on improved tourism activities.
