TEMPO.CO, Jakarta - Uncertainty of the epidemic hits Malaysia's tourism recovery without opening up foreign tourists, it is difficult to support

Tourism has always been one of the main sources of income for the Malaysia economy. Prior to the pandemic outbreak, tourism pumped some RM86 billion into Malaysia in 2019. The industry has also created numerous job opportunities, adding 3.6 million jobs across the country.

However, the Coronavirus outbreak of 2020 has impacted industries across the world. The highly people-centric tourism industry was suddenly brought to a halt.

It has been two years and the Covid-19 pandemic has continued to rage on. Countries around the world have rolled out their vaccination drives to inoculate their population against the virus which has brought the number of confirmed cases down significantly. As the tourism industry almost saw signs of recovery on the horizon, a highly contagious Omicron variant of the virus was detected, setting the tourism industry even further back on their road to recovery.

Oriental Daily conducted a number of interviews with several Malaysian tourism company operators to get a better understanding of the current state of the industry.
Leong Wai Hong, acting chairperson of the Malaysian Inbound Tourism Association, said that the unstable and uncertain epidemic has made the tourism industry unable to see a way forward.

According to her the new Omicron variant of the coronavirus has had little impact on the tourism industry in general, however it has had a more noticeable effect on the recovering inbound tourism industry.

"In this period of uncertainty, those of us in the industry cannot see a way forward. We are unable to make plans for anything because the pandemic is changing so often.”
For example, local inbound tourism operators had at first, planned to roll out several promotional activities in 2022 for tourism. However due to the uncertainty brought about by the Omicron variant, many of these projects had to be readjusted or put on hold.
Speaking frankly, she said that although Malaysia’s current tourism industry is experiencing a good recovery, the climate is still far from conducive for a full recovery of the tourism sector.

“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 pointed out that in order to assist travel agencies with this recovery, the best solution for now would be to open up to allow many more inbound tourists in.
She believes that if the government does not aggressively push for the reopening of our borders, the inbound tourism industry will experience a late recovery and will be the industry that suffers the worst impact from the pandemic.

Hotel occupancy was less than 30% in 2021

Malaysian Association of Hotels CEO Yap Lee Sheng(?) also agreed that the hotel industry in Malaysia is in urgent need of foreign tourists.

They said that 45% of tourists in Malaysia’s hotel industry are foreign tourists while the remaining 55% are domestic tourists. In the absence of foreign tourists, the market demand from domestic tourists is not enough to sustain the local hotel industry.

They also mentioned that the emergence of the Omicron variant has cause many countries to tighten restrictions and shutter their borders once again in order to stem the spread of the virus. This, in turn, will delay the reopening of international borders and has become a major concern for the hotel industry.

According to them, before the coronavirus pandemic, the average occupancy rate of hotels in Malaysia in 2019 was 64%. In 2020 as the pandemic struck and the national Movement Control Order (MCO) was implemented, the average occupancy rate for hotels nationwide plunged by half to just 32%.

“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 reopened.”“In 2021 we expected the average occupancy of hotels (for the entire year) to be under 30%.”

He explained that at the moment, hotels in the country only have high occupancy rates on weekends or in areas with popular tourist attractions like Langkawi and Penang - but not elsewhere.

“As a whole, the hospitality industry is still struggling with small recoveries in operations but hardly any financial improvement.”

The aviation industry’s slow recovery

They admitted that the recovery process of Malaysia’s local aviation market is very slow and that of the international market is even worse. They are hoping the coronavirus situation will begin to stabilise more in the next few months.

Looking back on his experience in the last two years, Malindo Air CEO Mushafiz Mustafa Bakri said that all airline companies have been hit hard by this unprecedented pandemic. Malindo Air’s revenue in March 2020 had tumbled by 95% compared to that of the previous year.

He told us that he originally believed that the coronavirus pandemic would pass quickly with an impact of just 4-6 months like the SARS pandemic. It ended up lasting for over two years.

In an interview with Oriental Daily, he said 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 reduce 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.”

He admitted that while the recovery of the Malaysian aviation market was very slow, the international market was doing much worse. He hopes that the pandemic will simmer down and that things will stabilise in the coming months.

“We wanted a bottomed-out V-shaped recovery, but what we really got is more of an L-shaped recovery.”

He said that the aviation industry is very concerned about the government’s actions and response to this new Covid variant as the operation of the aviation industry depends on the actions of the government.

He hopes the government will not take a zero-tolerance approach in dealing with this Covid-19 variant as Malindo Air has opted to take a risk-based approach with the experience they have accrued over the last two years in dealing with Covid-19 and its variants.

The industry hopes the government and ASEAN to discuss the establishment of more VTLs to unify the cross-border tourism policies of various countries

In an effort to control the spread of the coronavirus outbreak across borders, Malaysia shuttered their international borders for nearly two years. The only exceptions are the Langkawi Tourism Bubble, which was only opened to foreign tourists in the second half of 2021 and the Vaccinated Travel Lane (VTL) between Malaysia and Singapore.

These measures were not enough for Malaysian tourism companies who rely on foreign tourists, let along 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.

Oriental Daily interviewed several representatives of the tourism sector who are hoping that the government will create more policies that will reset and revitalise the tourism industry.

In an interview with Oriental Daily, Malindo Air CEO Mushafiz Mustafa Bakri said that the current obstacles in the way on the road to national recovery are the closure of the national borders and the different isolation, testing and vaccination requirements of various countries.

“We are calling on ASEAN countries to come to an agreement on travel documents, testing requirements, testing methods, vaccines and length of quarantine period.”

He hopes that such an agreement will expedite the reopening of borders and once again allow the aviation industry to start flying again and once again connect ASEAN nations.

“The Vaccinated Travel Lane (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 that recovery must be based on distance at this point of time and more emphasis needs to be placed on discussions with ASEAN nations.

He believes that countries should accept tourists who wish to enter and have been vaccinated against the coronavirus. It is only when people can once again move around without restriction can the tourism industry regain its momentum on the road to recovery.

Full recovery needs a strong leadership from MOTAC

Mint Leong, acting chairperson of the Malaysian Inbound Tourism Association pointed out that the Ministry of Tourism and Culture (MOTAC) must take the lead in the recovery of the tourism industry since a lot of communication and policymaking across departments and agencies have to be involved.

She emphasised that the full recovery of the tourism industry requires MOTAC to take a strong leadership role, to be responsible for communication and connection between various departments after taking into consideration the suggestions and concerns from industry leaders.

“The policy has to start with the government. If the government does not allow Malaysians to travel abroad and foreign tourists to enter, it will be a complete failure as a ministry.”

She is hoping that the government can negotiate with ASEAN countries to open up more tourist bubbles and flights and to make plans in advance to select suitable locations for tourist bubbles and target traveller groups.

“We hope that the travel bubble in Langkawi can be extended to other places, quarantine should be reduced from 7 to 5 days. This safer environment will be able to help inbound tourism operators bring more customers in.”

She suggested that Malaysia should refer to the tourism policies of some other countries in this pandemic such as those of more liberal countries like those in Europe and America to then craft a suitable model for Malaysia’s tourism industry.

An ASEAN travel visa has been proposed to allow for travel between 10 countries

On the other hand, Malaysian Association of Hotels CEO Yap Lip Seng said that the association has repeatedly suggested that the ASEAN Tourism Association introduce a single visa for ASEAN countries in order 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 more ASEAN countries and spend more time here.

He 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.

He also said that ASEAN as a whole is a very competitive tourist destination because of the wide variety of attractions, cultures and natural heritage that are competitive with other travel destinations.

He pointed out that ASEAN member nations can work together to promote tourism in ASEAN through a clever marketing slogan being “One Vision, One Identity, One Community” when promoting and encouraging tourism in their respective countries.

He believes that as long as the 10 ASEAN countries can commit to this it will bring an influx of a large number of tourists and eventually benefit all ASEAN member nations.

In addition, Yap also said that Malaysia is very dependent on tourists from within ASEAN itself, especially from Singapore.

“70% of our tourists are from ASEAN and almost half of them are from Singapore.”

He said that tourists from Singapore are not particularly helpful to the Malaysian hotel industry as they prefer to stay with their relative and friends in their homes instead.

He believes 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.

Prepare for and take measures to deal with the new wave of epidemics. The Minister of Tourism hopes to gradually reopen the border

Tourism is inseparable from travel. As such, the recovery of the tourism industry is directly connected to freedom of movement. With Malaysia reopening interstate travel on October 11 and the launch of the international tourism bubble and Vaccinated Travel Lane (VTL) in November, the recovery of the local tourism sector has gradually been picking up.

Malaysia’s Tourism, Arts and Culture Minister Nancy Shukri believes that with Malaysia on the road to becoming one of the countries in the world with the best vaccination rates in the world, the Langkawi International Tourism Bubble and Vaccinated Travel Lane (VTL) can potentially attract foreign tourists.

“We hope that with the gradual reopening of borders such as the Langkawi International Tourism Bubble (LITB) on 15 November 2021, and the Malaysia-Singapore Vaccinated Travel Lane (VTL) on 29 November 2021, we will not only see an increase in tourists and tourism revenue but also help us inch closer to the complete reopening of our borders to foreign tourists.”

In a written reply to a question from an Oriental Daily reporter, Nancy pointed out that as of December 21, 2021, over 600,000 domestic and foreign tourists have visited Langkawi with tourism revenue reaching RM640 million.

As of December 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.

She also said that as of December 13, 2021, the Malaysia-Singapore VTL for air travel has brought 15,864 tourists to Malaysia. Meanwhile as of December 18, 2021, 22,003 tourists have come to Malaysia via the Malaysia-Singapore VTL on land.

“We are looking forward to expanding the VTL to other ASEAN countries when the conditions permit.”

However, Malaysia and Singapore agreed to temporarily suspend the sale of airline and bus tickets for the VTL from December 23, 2021 to January 20, 2022 due to a cluster of infections believes to have been from the Omicron mutation 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% compared to that of the second quarter in the same year.

“The interstate travel ban was lifted on October 11 and the average (hotel) occupancy rate has risen steadily to 45% in November.”

She said that this was a good indicator of recovery and that given our international borders are still closed, it means that locals are beginning to adapt to the new normal in tourism.

She said that MOTAC is working on numerous strategies to boost domestic tourism including incentivised programmes in the form of discounts with local airlines, the Malaysian Association of Hotels (MAH), rebates, gift voudhers as well as the purchase of cultural souvenirs.

“As of December 9, 2021, Malaysians have fully redeemed these rewards.”

While ttourists have started to travel under the conditions of the new normal, Nancy Shukri urges tourists to follow standard operating procedures (SOPs) while travelling to ensure that the number of Covid-19 cases remains low so that tourism activities can continue to open.

She pointed out that with the new coronavirus variant, the government will always be prepared to take all the necessary measures before fully reopening our borders.

Malaysia’s active participation in the recovery of tourism in ASEAN

Nancy Shukri added that on the road to ASEAN’s recovery, Malaysia has been actively participating in ASEAN-level discussions through the ASEAN National Tourism Organisation (NTO), its committees and working groups to propose mitigation and action plans 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.

She pointed out that Malaysia is actively playing a key leadership role in executing strategic action plans on investment, sustainability and marketing matters under the ATSP, which in turn will enhance ASEAN’s competitiveness as a single tourism destination.

She said that Malaysia is also working closely with all relevant ASEAN sectoral agencies to effectively and completely implement recovery plans and action and to ensure that policies and guidelines are aligned in order to jointly tackle the Covid-19 outbreak.

How the pandemic changed travel patterns towards health and safety

When discussing changes in future travel plans during the pandemic, 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, she said that most respondents are of the belief 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 believes that 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.”

She suggested that tourism operators remain flexible and to 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