Tourism Market In Malaysia Outstrips Expectations

Tourist arrivals to Malaysia outstripped our expectations in 2009. Looking at the most recent data available from the Immigration Department, the country welcomed 21.51mn tourists over January- November 2009, an increase of 7.6% year-on-year (y-o-y). October and November were particularly strong months, with tourist arrivals up by 14.3% and 11% y-o-y respectively. The robust performance is in stark contrast to the dire prognosis of a fall of 9% forecast by the government at the start of 2009 and shows that Malaysia did well to withstand the lack of consumer demand for global tourism during a difficult year. We now believe that tourist arrivals can post a positive increase of 7% y-o-y for 2009.

We remain bullish about the long-term prospects for Malaysian tourism, which continues to benefit from strong government support and a relatively secure and stable political situation.

The country offers a range of tourism options, from meetings, incentives, conventions and exhibitions (MICE) travel to beach holidays, and the state is committed to supporting an industry that is an important generator of foreign exchange.

AirAsia-Jetstar Tie-Up

In January 2010, Malaysian airline AirAsia announced a link-up with Australian low-cost carrier Jetstar. The airlines will take advantage of the greater scale to get better deals on costs for fuel, spare parts and new aircraft, among other cost savings. In particular, both companies are keen to use their influence on aircraft manufacturers to place joint orders for planes that are already set up in a single economy class specification suitable for use by low-cost carriers.

Attracting Muslim tourists

Efforts to attract more Muslim tourists from the Middle East to Malaysia appear to be bearing fruit. Approxiamtely two-thirds of Malaysia’s population are Muslim and halal food is widely available, making the country an attractive place for Muslims from the Middle East to visit. Malaysian industry sources also say that visitors from the Middle East stay twice as long as tourists from other parts of the world and spend nearly three-times more money.

Looking at data for November 2009, Tourism Malaysia reported a 119.5% annual increase in the number of visitors from Saudi Arabia, alongside an 80.3% increase in arrivals from the UAE and a 47.4% increase in the number of visitors from Iran. We would expect a further increase in Muslim tourists coming to Malaysia in 2010, when the sixth World Islamic Economic Forum comes to the Kuala Lumpur Convention Centre in May.

Malaysia Tourism Report Q1 2010: