Outlook 2020 – the tourism industry at a glance

2020 is gearing up to be a big year. Prime Minister Tun Mahathir Mohammad launched the new Visit Malaysia 2020 campaign earlier in July complete with a logo, slogan and new tourism targets for next year. Building off 2018’s achievements of 25.8 million arrivals and RM84.1 billion in tourism receipts, the government has set its sights on reaching a target of 30 million arrivals and RM100 billion in receipts for 2020. While much attention (and criticism) was given to the design of the new logo, we need to start thinking about how we can best ensure that not only do we meet the targets, we do so in a sustainable way that does not encourage over-tourism or the wrong kind of image for Malaysia.

Reaching 30 million arrivals and RM100 billion receipts is an ambitious goal but not an impossible one. Tourism in Southeast Asia is growing rapidly and is expected to contribute 4.9% (USD209.4 billion) to the region’s combined GDP by 2025, making Southeast Asia the second-fastest growing region for tourism in the world after South Asia. In Malaysia, tourism has been a key contributor to the overall economy; inbound tourism contributed 5.9% to the country’s GDP last year and 6.1% in 2017. After manufacturing and commodities, it is the third largest contributor to Malaysia’s foreign exchange receipts.[1] Tourism Malaysia remains confident that the industry will be on track to meet these targets; in fact, results from the first quarter of 2019 showed a growth of 4.8% in tourist arrivals and a surge of 16.9% in tourism revenue compared to the same period last year.[2]

The case for change

Currently, Malaysia is focused on numbers – increasing the number of inbound tourists into Malaysia and increasing the amount they spend here from lodging to money spent on food and drinks as well as entertainment. Malaysia’s track record in that respect has been limited. Compared to the past 10 years, the number of tourist receipts and number of arrivals has not grown exponentially; in fact there has only been an increase of MYR5 million in receipts since 2007.

However, demand is changing. Mass tourism is no longer sufficient. Travellers today are getting more selective when choosing their travel destinations and planning their itinerary. A study by Expedia Group found that people tend to choose travel destinations based on the activities available, whether it could prove to be a once in a lifetime experience and to experience the culture. Almost 60% of respondents to the Bookings.com survey would choose to not go to a destination if they feel it will negatively impact the people who live there.[3] This increasing awareness has led to more travellers to literally seek out the path less travelled. Rather than simply hopping from landmark to landmark, travellers today want to do something. This could be anything from learning local arts and crafts, doing outdoor sports and activities, cooking the local cuisine, or even volunteering.

We’re also seeing a rise of younger travellers. More millennials today have reached a point in their lives where they are earning more and willing to spend more on vacation. Expedia reports that millennials are the group most likely to travel either for business or leisure, taking an average of 2.9 personal trips and 1.6 business trips a year.[4]

How people are using social media is also changing the way the tourism industry operates. With the speed and convenience of (almost) universal internet connection, all it takes is a few seconds on Instagram for someone’s holiday photos, videos and stories to spread through the circles of followers online. In fact, it seems people are making decisions based on whether or not where they’re going is worth posting on the platform themselves – a survey found that more than 40% of people under the age of 33 prioritise ‘instagrammability’ when choosing a holiday destination.[5]

Even the way travel information is consumed and used is changing. Generic, comprehensive travel guides are of the past, with more travellers using increasingly short-form, hyper-relevant and individualised content which can be neatly integrated into social media feeds. A survey by Booking.com found that 52% of travellers would be excited about tech travel innovations such as a digital tour guide to give a truly bespoke experience.

What can be done

Reflecting on her experience working to deliver transformational change to the tourism industry, Dr Sarinder, Executive Vice President at PEMANDU Associates, notes that the response from the private sector tends to be very good. Private sector players have shown a willingness to cooperate in labs and are willing to do what needs to be done to drive the industry forward – what they need is support from the government. There is an opportunity here for Tourism Malaysia to change the mindset and play a more facilitative role in creating a private sector-driven industry that is accessible, interesting and sustainable.

 Many of Malaysia’s selling points are focused on shopping (we’ve seen five outlet malls pop up in five years, one of which is conveniently located just a stone’s throw away from KLIA airport) or on landmarks where busloads of tourists unload, take pictures, then get back on the bus to be whisked away to the next destination. This isn’t sustainable in the long run and it runs the risk of painting Malaysia as a one-visit destination.

Instead, we could focus on creating unique, memorable experiences to encourage people to come back. Global best practice has shown that in order to truly connect with visitors (and ultimately, grow market share) the focus needs to be on the emotions, feelings and sensations the visitors experience throughout their journey.

  1. Offer a steady stream of fresh tourism products

Unfortunately, the revenue-generating potential of our local tourist sites are currently not fully maximised due to the lack of creative content and experiences provided by these sites.

Tourism site operators and service providers need to look into offering new paid experiences to increase their potential revenue. One way this could be done is to allow private sector companies to develop and manage publicly owned sites that have been evaluated to have the potential to become tourist attractions. This way, the quality and type of experiences offered at the site will be driven by the private sector who tend to have more time and money to invest in development planning and are usually the first ones to capitalise on a new trend. They may, however, fail to adequately consider the economic and social benefits which is where the government can step in to regulate the industry and ensure it benefits the nation holistically.

  1. Use social media to spread brand awareness and capture interest

Customer service and satisfaction have been transformed as a result of the widespread use of social media as a way to record and communicate experiences. People today choose where to go based on word of mouth. When choosing a destination, they ask their family members, friends and even co-workers if they have been there before. Failing that, they turn to travel blogs and videos taken by others who have been there and are sharing their experiences with the world. Over 97% of millennials share photos and videos of their travels online, building an influential web of peer-to-peer content that is valuable to discerning industry players.

This trend hasn’t gone unnoticed. Many hotels and attractions overseas have turned to running social contests and campaigns to ensure that they get some credit for their visitor’s social activity.[6] Instead of using staged, professional photos, campaigns encourage visitors to take their own photos, tag them with a hashtag relating back to the attraction, and upload them onto social media for a reward. This creates user-generated content that is free, authentic and able to be repurposed across its marketing channels. Some attractions here are beginning to do the same. The ESCAPE theme park, based in Penang, ran a campaign on Facebook in April this year calling for visitors to post pictures of themselves on the site under the hashtag #escapephotosplash. Event venue Glamz, situated in Genting Highlands, tags all its posts and pictures shot on location with their unique hastag #glamzatgenting. However, more could be done to capitalise on the rising popularity of short, user-created travel videos or ‘vlogs’ shared on social media.

  1. Improve Malaysia’s marketing and cohesive brand image as a destination of choice

Budget is a common constraint when it comes to marketing tourism in Malaysia. In order to relieve some of the burden, marketing efforts could be collectively owned and collaboratively executed by both public and private sector players.

For example, as the government representative, Tourism Malaysia could take the lead in determining the marketing direction for the major markets and focus on a theme-based schedule to guide the industry players in their marketing efforts to sync with the overall messaging focus. This will ensure cohesivity on similar tourism products with both public and private sector players leveraging on each other’s marketing content. By doing so, the collaborative effort between Tourism Malaysia and private sector players will generate a comprehensive, streamlined tourism messaging but with the marketing expenses diffused across the industry. That said, it is important to understand that this approach does not play down other offerings but rather enables time for product development and can also reduce product fatigue.

  1. Upskill the local talent

There is a gap between the skills of local graduates and the demands of the industry. The hospitality and tourism syllabus currently taught in tertiary education institutions in Malaysia tend to lean towards hotel management and theoretical concepts. MATTA has commented before that no university or college provides actual job skill requirements needed by the tourism industry.[7] The industry is looking for graduates with technical knowledge, customer service skills and language proficiency in order to efficiently and effectively serve customers.

Understanding that the process of changing the academic syllabus within tertiary education institutions isn’t going to be quick or easy, this is an opportunity for the private sector to step up to the plate and offer apprenticeship programmes – divided between 70% on-the-job skills development and 30% certified knowledge training – to upskill our local graduates. Research has shown that apprenticeship in the leisure, tourism and hospitality sectors provide the best opportunities for fresh graduates to gain experience and customer skills.[8] In turn, offering apprenticeships helps to improve employee retention and company loyalty as many stay on to become full-time staff.

The times, they are a-changin’

Moving into 2020, the landscape of tourism is changing. Even the word ‘tourist’ is becoming outmoded, with many preferring the term ‘traveller’ when thinking about going abroad for vacation as the term ‘tourist’ has become attached to a few too many negative stereotypes.[9] In addition, while price is still important, we’re seeing more people make travel decisions based on their heart rather than their wallet. This has led to a growing change in consumption patterns, as more travellers come to places like Malaysia looking for unique experiences, rather than for shopping.

It’s also important to ensure that our attractions are being marketed and managed properly. This means creating end-to-end management; from ensuring that the site is accessible to all visitors and is connected to public and private transport, to seeing that it is marketed properly using a variety of channels as well as a storyline that is based on the site’s history and charms to garner public interest. Much like the old travel slogan “Malaysia, Truly Asia”, Malaysia is home to many interesting and uniquely Asian attractions which, if managed well, can easily get us to that RM100 billion target.

  1. The Edge Malaysia, 2019
  2. Prime Minister’s Office, 2019
  3. Bookings.com, 2018
  4. Expedia Group
  5. Econsultancy, 2019
  6. Entrepreneur, 2017
  7. New Straits Times, 2019
  8. Travel Daily, 2018
  9. The Invisible Tourist, 2017

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