NTP: Tourism sector 3rd highest contributor to Malaysian economy

Malaysia's tourism sector saw an improvement from fifth to third highest Gross National Income (GNI) contributor last year in 2014 despite a decline in tourist arrivals and receipts.

According to the National Transformation Programme Annual Report 2015, in terms of tourist receipts, it decreased by four percent from RM72 billion to RM 69.1 billion in 2015, while tourist arrivals recorded a decline of 6.3 percent from 27.4 million in 2014 to 25.7 million last year.

The drop in tourist arrivals and receipts can be attributed to the global economic slowdown and challenges such as the worst floods in 30 years which affected several states in Malaysia in early 2015 and the earthquake in Ranau, Sabah, in June 2015, regional travel advisory for the coastal areas of the south-eastern coast of Sabah as well as the lingering effects of the MH370 and MH17 incidents.

"Despite various challenges, tourism remains a resilient sector, and it is one of the economic pillars that can assist Malaysia's economic recovery," it said.

It said Malaysia’s competitiveness as a leading tourism destination in the region was recognised via numerous awards in 2015: Best Golf Destination in Asia for the second year running by the World Golf Awards 2015; Best International Destination - Food and Drink 2014 in April 2015 by Travel & Leisure magazine; second most popular shopping city in the world for Muslim tourists by the Muslim Travel Shopping Index 2015 and Top 10 Best Travel Destinations for 2016 by the Lonely Planet.

According to the report, the Malaysian cruise industry continued its upward growth trajectory in 2015 with a marked 50 percent increase in total cruise passengers to 523,272 from 352,322 in 2014.

It said outlet centres for premium items also continued to grow in popularity as Malaysia became the first country to have a Mitsui outlet outside Japan in 2015 and home to the largest Mitsui outlet to-date, which had attracted over one million visitors since its opening.

Tourist spending on shopping also picked up momentum last year, with the total spent on shopping rising by 0.2 percent to RM21.63 million and shopping representing 31.3 percent of the total tourist spending in Malaysia.

The report said government incentives and programmes continued to play a major role in developing the tourism industry, for example the Investment Tax Allowance had encouraged the opening of more 4- and 5-star hotels in 2015 including the luxury Kempinski-branded 5-star hotel which will commence construction in 2016.

The 2015 annual report also stated that in moving forward the government remains steadfast in achieving its ambitious targets of 36 million tourist arrivals and RM168 billion tourist receipts by 2020, given that 2015 represents a halfway mark for the Economic Transformation Programme and to take on board the dynamic landscape of the tourism sector.

"The Ministry of Tourism and Culture has decided that it is timely to review the existing initiatives and identify new product offerings, including incorporating the recommendations of the recent studies embarked by the

ministry," it said.