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Tourist arrivals up despite gloomy outlook

Saturday November 29, 2008

By LAALITHA HUNT

PETALING JAYA: Tourist arrivals in the third quarter showed an 8% increase despite the gloomy outlook on the sector.

To ensure that the performance is maintained, the Tourism Ministry is stepping up efforts to boost certain segments such as domestic tourism, education as well as eco and medical tourism.

The Malaysia My Second Home programme will also receive a boost. In view of the economic slowdown, Tourism Minister Datuk Seri Azalina Othman said the focus would be on budget travellers and tourists from emerging countries.

At the recent World Travel Market in London, she expressed strong hopes that Firefly and AirAsia would play an important role in wooing the budget travellers.

The number of long haul travellers has increased. In the first 10 months of the year, there were 303,569 tourist arrivals from Britain, a 36.1% increase from the same period last year. Each British tourist spent an average of RM3,510 and 9.6 days in Malaysia, according to Azalina.

British tourists spent an average RM3,510 and 9.6 days in Malaysia.

The concern is the tourist arrivals next year as the effects of the slowdown become more pronounced.

Economists contacted by StarBiz concurred that the widening global slowdown would likely impact the tourism sector next year.

“There will be cutbacks in travel and leisure activities by businesses and consumers in the recession-hit countries,” RAM Holdings Bhd group chief economist Dr Yeah Kim Leng said.

However, he said, the reduction in tourists from countries facing a slowdown such as China and India might not be that severe, particularly for intra-regional travel and those from the middle to budget segment.

Malaysian Institute of Economic Research executive director Professor Datuk Dr Mohamed Ariff Abdul Kareem also noted that global recession would hit local tourism.

“Even the Middle East numbers may be somewhat weaker in 2009, as oil prices are likely to stay below US$60 per barrel,” he said, adding that Malaysia was a favoured destination for Middle Eastern tourists.

However, Yeah considered the reduction in fuel cost as the silver lining in the gathering dark clouds for the airline, hospitality and tourism-related sectors as it would result in lower cost of travel.

He said tourist arrivals to Malaysia in the third quarter showed a healthy 8% year-on-year rise 5.8 million compared with 3.9% in the previous quarter and 1.2% in the first quarter.

“Despite a number of advanced countries such as the US, Japan, Europe and Singapore registering economic contraction this year, tourists from these countries to Malaysia increased by 4.3% to 16.3 million in the first nine months,”he told StarBiz.

However, according to industry sources, tourist numbers might have been inflated with the inclusion of transit passengers.

An official with Malaysia Airports Holdings Bhd confirmed that out of 22.6 million travellers to Malaysia from January to October, 1.2% - or 241,000 - were transit passengers.

“Some of them (transit passengers) were included in the total number of tourist arrivals as they decided to visit the country,” the official said.

Meanwhile, a check with the Malaysian Association of Hotels showed average occupancy rates in the first quarter had increased by 1.5% compared with the previous corresponding period.

However, in the second quarter, the rates dropped 0.7% from a year ago.

On efforts to boost the industry, Ariff said the Government had overlooked the tourism sector in the RM7bil stimulus package announced recently.

“There is a need for the Government to focus on domestic tourism to take up the slack in foreign tourists. With reduced purchasing power, domestic tourism may also take a beating. The stimulus package must therefore pay serious attention to this sector,” he said.

However, Yeah said, although there were no specific instruments targeted at uplifting the tourism sector in the recent stimulus package, the higher government spending and measures to raise disposable income would help prop up consumer spending, thereby lending some support to the medical and domestic tourism industry.

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