Prior to the Covid-19 pandemic, the tourism industry pumped some RM86 billion into Malaysia in 2019, providing 3.6 million jobs across the country.
But the coronavirus outbreak brought the whole industry screeching to a halt.
Countries around the world raced against time to inoculate their population against the virus, and this has helped bring the number of cases down significantly.
But as tourism saw some signs of recovery, a highly contagious Omicron variant was detected, setting the industry further back on its road to recovery.
The Oriental Daily interviewed several tourism industry players to get a better understanding of the current state of this key sector in the Malaysian economy.
Mint Leong, the acting chairperson of the Malaysian Inbound Tourism Association, said the uncertainty of the pandemic has made the industry unable to chart the way forward.
According to her, the local inbound tourism operators had, at first, planned to roll out several promotional activities in 2022 for tourism. However, due to the rise of the Omicron variant, many of these projects had to be readjusted or put on hold.
Leong said although Malaysia’s current tourism sector is experiencing some recovery, the climate is still far from conducive to a full recovery.
“Every stage of recovery has been short-lived. Progress flattens out and then recovery begins again before being flattened. This unpredictable state is far from conducive to the overall recovery of the tourism sector.”
She said if the government does not aggressively push for the reopening of our borders, the inbound tourism industry will continue to suffer.
Malaysian Association of Hotels CEO Yap Lip Seng agreed that the hotel industry in the country is in urgent need of foreign tourists. The market demand from domestic tourists is not enough to sustain the local hotel industry.
According to the association, before the pandemic, the average occupancy rate of hotels in Malaysia in 2019 was 64 percent. After the movement control order (MCO) was implemented in 2020, the average occupancy rate for hotels nationwide plunged by half to just 32 percent.
“We were expecting a better recovery in 2021, not knowing that it would end up worse since another MCO was imposed from January to October and interstate travel was only recently allowed," Yap said.
He explained that at present, hotels in the country have high occupancy rates only on weekends or in areas with popular tourist attractions like Langkawi and Penang - but not elsewhere.
Slow for the aviation industry
Malindo Air CEO Mushafiz Mustafa Bakri said all airline companies had been hit hard by this unprecedented pandemic.
Malindo Air’s revenue in March 2020 had tumbled by 95 percent compared to that of the previous year.
He told the Oriental Daily that due to the sharp drop in revenue, the airline was forced to downsize and major adjustments were made, including the reduction of aircraft and employees to cut costs.
“We returned 20 Boeing 777s and three ATR-72s. Without these aircraft in service, we had to lay off some employees either through termination or a Voluntary Separation Scheme (VSS). This has had a significant impact on our operations since 2020," Mushafiz said.
He said the aviation industry is very concerned about the government’s actions and response to the new Omicron variant.
The industry hopes the government and Asean will discuss the establishment of more Vaccinated Travel Lane (VTL) to unify the cross-border tourism policies of various countries, he added.
In an effort to control the spread of the coronavirus outbreak across borders, Malaysia shuttered its international borders for nearly two years.
The exceptions are the Langkawi tourism bubble, which was only opened to foreign tourists in the second half of 2021, and the VTL between Malaysia and Singapore.
These measures were not enough for Malaysian tourism companies which rely on foreign tourists, let alone tourism companies that have suffered through this two-year slump. To them, the domestic tourism industry can only fully recover when the borders are reopened.
Mushafiz said that the current obstacles in the way on the road to recovery are the closure of the national borders and the different isolation, testing and vaccination requirements of various countries.
“The VTL between Malaysia and Singapore is an encouraging initiative. Hopefully, we will be able to continue working with countries like Indonesia, Thailand and our other neighbours in Asean," he said, adding that more emphasis needs to be placed on discussions with other nations in the region.
Mushafiz believes that countries should accept tourists who are fully vaccinated against Covid-19.
Tourism Ministry must lead
Leong pointed out that the Tourism, Arts and Culture Ministry must take the lead in the recovery of the industry.
“The policy has to start with the government... We hope that the travel bubble in Langkawi can be extended to other places, quarantine should be reduced from seven to five days.
"This safer environment will be able to help inbound tourism operators bring more customers in," she said.
On the other hand, Yap said the Malaysian Association of Hotels has repeatedly suggested that the Asean Tourism Association introduce a single visa for Asean countries to attract more foreign tourists.
He explained that tourists holding this visa should be allowed unimpeded travel to the 10 Asean countries without having to apply for separate visas, thus allowing more tourists to visit these countries.
Yap said that this strategy is similar to the one adopted in European countries and can be an excellent strategy for the Malaysian tourism industry which has been highly dependent on foreign tourists and their high spending power.
He pointed out that Asean can take advantage of the Covid-19 pandemic to conduct a major reset of the tourism industry and to restart talks of collaborations between Asean nations to present itself as a destination as a whole.
Yap added that Asean as a whole is a highly attractive tourist destination because of the wide variety of attractions, cultures and natural heritage.
He believes that as long as the Asean countries can commit to this one-visa policy, it will bring an influx of a large number of tourists and eventually benefit all the member nations.
In addition, Yap said that Malaysia is very dependent on tourists from within Asean itself, especially from Singapore.
“Seventy percent of our tourists are from Asean and almost half of them are from Singapore.”
He said tourists from Singapore are not particularly helpful to the Malaysian hotel industry as they prefer to stay with their relatives and friends here.
Yap added that Malaysia needs to revamp its strategy in order to reduce its reliance on Singaporean tourists and instead, look towards expanding to attract tourists from other key markets such as China, India, Japan and South Korea.
Gradually reopen the borders
Tourism is inseparable from travel. As such, the recovery of the tourism industry is directly connected to freedom of movement.
Tourism, Arts and Culture Minister Nancy Shukri said with Malaysia on the road to becoming one of the countries with the best vaccination rates in the world, the Langkawi tourism bubble and VTL can potentially attract foreign travellers.
In a written reply to questions from the Oriental Daily, Nancy pointed out that as of Dec 21, 2021, over 600,000 domestic and foreign tourists have visited Langkawi with tourism revenue reaching RM640 million.
As of Dec 22, 2021, 1,089 tourists have visited Langkawi via the tourism bubble, including tourists from the United Kingdom, the United States, Australia, China, Germany, Indonesia and Thailand.
“We are looking forward to expanding the VTL to other Asean countries when the conditions permit," she said.
However, Malaysia and Singapore have temporarily suspended the sale of airline and bus tickets for the VTL from Dec 23, 2021, to Jan 20, 2022, due to a cluster of infections believed to have been from the Omicron variant in Singapore.
Nancy also mentioned that according to the report by the Malaysian Hotels Association, the average hotel occupancy rate in the third quarter of 2021 had increased to nearly 30 percent compared to that of the second quarter in the same year.
“The interstate travel ban was lifted on Oct 11 and the average (hotel) occupancy rate has risen steadily to 45 percent in November," she said, adding that this was a good indicator of recovery and given our international borders are still closed, it means that locals are beginning to adapt to the new normal in tourism.
Nevertheless, Nancy urged tourists to follow standard operating procedures (SOPs) while travelling to ensure that the number of Covid-19 cases remains low.
She pointed out that with the Omicron variant, the government will need to take all the necessary measures before fully reopening our borders.
Nancy said Malaysia had been actively participating in Asean-level discussions in order to break the Covid-19 chain of infection and to continue the implementation of the Asean Tourism Strategic Plan (ATSP) from 2016 to 2025.
Future travel patterns
Nancy pointed out that future travel patterns will definitely change and that travellers’ preferences and activities will shift towards familiar, predictable, trustable and low-risk destinations, such as domestic and regional resort destinations, outdoor activities and ecotourism attractions.
“Safe, uncrowded and comfortable destinations will have a surge in demand by travellers, giving rise to an opportunity to promote lesser-known destinations. Not only will this expand the economic benefits of tourism but also will solve the problem of crowds at popular attractions.”
In the aftermath of the pandemic, health and safety will become important factors in attracting tourists who prefer destinations with good infrastructure, proper medical facilities and compliance with standards for cleanliness, health and safety, she said.
Citing Tourism Malaysia’s survey on domestic travel in Malaysia last year, Nancy said most respondents revealed that Covid-19 had affected their travel behaviour.
“Almost all respondents put health and safety as a high priority in their travel decisions and would avoid travelling to crowded places. Most respondents prefer to arrange their own travel through online booking services.”
She said tourism operators must “dramatically” review their business processes to adjust and adapt to new travel patterns during the pandemic.
“Travellers are seeking further support to face changing circumstances and uncertainty. Travel operators are becoming more valuable and important in assisting travellers in making informed decisions.”
Nancy suggested that tourism operators remain flexible and engage more with consumers and other stakeholders in order to overcome challenges and make travel enjoyable again which will, in turn, encourage more tourists to travel.
This article is produced as a part of the Seafore Asean Masterclass project, with support from the Institute for War and Peace Reporting. It was first published in the Oriental Daily.