From YS Chan
Tourist arrival figures to Malaysia for the first half of this year were posted on Tourism Malaysia’s website yesterday (Oct 16), and total arrivals were 9,160,069 – a massive 329.6% increase over the same period last year.
Arrivals from Saudi Arabia registered a double-digit growth at 85.3%. However, the increase in arrivals from another top 44 countries registered triple-digit, or higher, growth.
Among the highest were tourists from China, with the number increasing by 1,182.5%. Meanwhile, Russian tourists increased by 1,899.5% and Taiwan by 1,569.3%.
Such astronomical percentages will not be repeated in the second half of this year as large numbers of tourists had started arriving in the second half of 2022, following the lifting of international travel restrictions in April, and the easing of Covid-19 conditions in May last year.
As a result, there were 7,938,804 tourist arrivals to Malaysia in the second half of 2022, compared with only 2,132,160 in the first half, for a total of 10,070,964 tourists coming to the country last year. The momentum in the last quarter of 2022, at 1.5 million arrivals monthly, carried on in 2023.
Last year, I projected that tourist arrivals would reach 18 million in 2023. So far, we are on track. I also predicted that arrivals would increase to 24 million in 2024, 30 million in 2025, 36 million in 2026, and peaking at 42 million in 2027.
However, in the recent 2024 budget announcement, Prime Minister Anwar Ibrahim said 2026 has been designated Visit Malaysia Year (VMY) and the government is targetting 26.1 million tourist arrivals and RM97.6 billion in revenue.
VMY 2026 targets are close to those achieved in 2019 when we received 26.1 million tourist arrivals and earned RM89.4 billion in inbound tourism expenditure, in addition to 84.7 million domestic tourists and RM92.6 billion in domestic tourism expenditure.
My prediction of much higher tourist arrivals in the coming years was premised on the government granting visa-free entry for nationals from countries such as China, India and Bangladesh, as it had long been granted to citizens of 163 other countries.
Granting visa-free entry does not mean that all foreigners can enter Malaysia freely. They are still subject to scrutiny by our immigration officers who are trained to detect suspicious characters.
Hence, there is no good reason to believe that nationals from China, India and Bangladesh pose greater risks than citizens of 163 other countries, as their incomes are fast rising, and their rapidly expanding middle-class populations offer the greatest potential for tourist arrivals.
But if we wish to maintain the status quo out of antiquated mindsets, then arrivals in the coming years would remain the same as in pre-pandemic years.
In the decade from 2010 to 2019, tourist arrivals have plateaued, averaging 25.8 million a year.
As announced in the 2024 budget last Friday, the government will only be improving its visa-on-arrival facilities, social visit passes, and multiple entry visas aimed at encouraging the entry of tourists and investors, especially from India and China.
If we are still dishing out more of the same, the results will remain unchanged.
Hence, the target of 26.1 million tourist arrivals for VMY 2026 is the same number that arrived in 2019. However, it is not difficult to attract 10 million more for the same year by just granting visa-free entry.
The best way to ascertain its viability is to run a pilot project by granting 14-day visa-free entry for six months from January 2024 for nationals from China, India and Bangladesh. Not only tourism could boom but so would trade and investments when we are perceived as friendlier.
After the trial period, we could discontinue visa-free entry, or may even consider granting visa-free entry for 30 days as given to citizens from 94 other countries before upgrading to 90 days as enjoyed by nationals from 69 other nations.
Or we can do nothing and maintain the status quo, content with an average of 25.8 million tourist arrivals per year from 2023 to 2032, repeating what was achieved in the decade from 2010 to 2019. If so, we remain stagnant while other countries race ahead, especially Asean nations.
In any case, the profile of tourists would differ somewhat from those that came in 2019, with the greatest increase from countries in Southeast Asia, followed by those in South Asia and East Asia. The biggest decrease would be in long-haul markets from Europe and North America.
In 2019, foreign tourists stayed for an average of 6.2 nights, but this had dropped to only 3.9 nights this year.
Apart from shorter stays, an even greater percentage would be travelling on their own without needing to join tour groups that are escorted by tour leaders and travelling in tour buses.
They could stay in licenced hotels or private residences, dine in restaurants, and shop in a variety of places.
Hence, accommodation providers, food and beverage outlets and retail stores are the main beneficiaries, together with those providing transport, such as e-hailing services.
YS Chan is an FMT reader.
The views expressed are those of the writer and do not necessarily reflect those of FMT.