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Malaysia’s tourism revival

ANN/THE STAR – Malaysia’s tourism industry, affected by the closure of borders from 2020 to 2022 due to the COVID-19 pandemic, is still in the process of recovery and it has been two years since the country welcomed back international tourists.

However, there are positive indications of recovery in the tourism industry as tourist arrivals doubled over the past year.

According to Tourism Malaysia’s data, the country welcomed 20.14 million international visitors in 2023, up from 10.07 million in 2022, generating MYR71.3 billion in tourism revenue. The 100 per cent increase in tourist arrivals is a promising development, though it remains 22.8 per cent lower than the 26.1 million recorded in 2019.

Looking ahead to 2024, Tourism Malaysia has set a target of achieving 27.3 million tourist arrivals with a total expenditure reaching MYR102.7 billion.

If the industry’s growth last year up until Q1 of 2024 is anything to go by, this ambitious venture may just be realised.

According to the fifth annual report by Mastercard Economics Institute (MEI), Malaysia’s tourism recovery is on track, with certain categories – such as shopping and dining – recording numbers higher than pre-pandemic levels.

The report draws on a unique analysis of aggregated and anonymised Mastercard transaction data, including Mastercard SpendingPulse and third-party data sources, to provide comprehensive insights into the travel industry across 74 markets, 13 of which are in the Asia Pacific region (APAC).

Entitled Travel Trends 2024: Breaking Boundaries, the report also analyses key tourism trends for 2024 and beyond.

APAC destinations, as per the report, are trending worldwide. By measuring the change in share of tourism transactions over 12 months (ending March 2024), MEI is able to determine the top 10 trending tourism destinations worldwide – and APAC countries make up half of the list.

Malaysia places 6th on the list, ranking second if taking only the APAC destinations into consideration. It places ahead of Australia (7th), South Korea (8th) and Indonesia (10th).

Malaysia received 20.14 million international arrivals in 2023. PHOTO: ANN/THE STAR

Meanwhile, Japan takes the top spot, with a growth of 0.9 per cent. Travellers from Asia made up 79.4 per cent of the country’s total passenger traffic by the end of 2023. It also received 3,081,600 international visitors in March 2024.

Aside from receiving more visits, APAC countries – excluding Australia and New Zealand (ANZ) – have also been seeing longer stays and higher spending by tourists.

As of March 2024, travellers to APAC are extending their trips by an average of 1.2 days. This sums up to a total duration of 7.4 days, which compares to the 2019 average of 6.1 days. Affordability of the destinations, warm weather and favourable exchange rates are the top reasons for the extended stays by tourists from outside APAC, such as the Americas and Europe.

Both worldwide and in Asean, travellers are extending by approximately one more day of vacation per trip. Looking at Malaysia specifically, tourists are spending an average of 6.4 days – this shows positive growth, when compared to the average 5.6 days seen pre-Covid-19.

When it comes to shopping in Asean markets, tourism spending on casual apparel sees a substantial increase for the period of April 2023 to March 2024. Malaysia recorded a 73.8 per cent increase during the 12 months than the same period last year, but luxury apparel shopping by tourists here saw a lower increase of 47.1 per cent.

Interestingly, Thailand is the only Asean market that recorded a higher increase in fine dining compared to casual dining, at 42.5 per cent compared to 41.6 per cent, respectively. As a side note, the Thai capital Bangkok currently has more than 30 Michelin-starred restaurants.

Thailand is expected to return to its pre-pandemic economic levels by the end of 2024. It has been receiving a higher number of visitors from Asean (19.9 per cent above 2019 levels as of February 2024) countries, South Asia (21.6 per cent) and Europe (1.8 per cent).

Visa exemptions in APAC for tourists from China will undoubtedly boost tourism in countries like Thailand, Singapore and Malaysia as well. Especially as outbound travel from mainland China, which now stands at 80.3 per cent of 2019 levels, continues to recover – unimpeded by Chinese tourists’ preference for domestic trips post-pandemic.

Like most travellers worldwide, Chinese tourists are also prioritising experiences, spending 10 per cent on this in 2024 compared to seven per cent in 2023.

Spending on experiences and nightlife currently makes up 12 per cent of tourism sales, the highest point in the last five years, with Australian tourists being the highest spenders worldwide. Their spending is higher than the global average of 12 per cent, as they spend one of every five dollars (19 per cent) in these categories.

“Consumers in the Asia Pacific region have an intense desire and willingness to travel and are becoming increasingly savvy to ensure they get the best value and unforgettable experiences from their trips,” David Mann, chief economist, Asia Pacific, Mastercard, said in a statement.

He added that “businesses targeting tourism dollars need to review their current strategies, and shift them if necessary, to maintain their appeal to travellers”.

MEI also reported that nine out of 10 of the highest spending days of all time for the cruise and airline industries, respectively, were recorded during the first three months of 2024. Cruise transactions across the globe also saw an 11.8 per cent growth in March 2024 compared to 2019.

Malaysia may capitalise on this growing interest in cruises by introducing more enticing cruise packages that let tourists experience the best of what the country has to offer.

Meanwhile, MEI’s analysis of flight booking data shows that the top summer destination is Munich, bolstered by the German city’s hosting of the month-long UEFA 2024 football championship (June 14 to July 14). Tokyo places second, while Bali (Indonesia) places sixth and Bangkok places seventh.

For Asean travellers, specifically those from Malaysia, Bali is also one of the top three destinations for the period of June to August 2024, alongside Shanghai (China) and Hanoi (Vietnam).

Meanwhile, Kuala Lumpur is among the top three destinations for Singaporean travellers, alongside Bangkok and Perth (Australia).

There is an even greater boost on tourism dining in Asean markets, with Malaysia recording the highest increase in casual dining, totalling 82.8 per cent. It also recorded a 50.4 per cent increase in fine dining.

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