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5 Feb, 2001

Malaysia Reports Surge in Arrivals from Thailan

BANGKOK — A near doubling of visitor arrivals from Thailand to Malaysia has played a major role in helping our southern neighbour report a surge in tourism arrivals for 2000. After slumping in 1998, total arrivals into Malaysia began recovering in 1999 and are projected to have crossed the 10 million mark in 2000, a major turnaround from 7.9 million in 1999.

In Jan-September 2000, the last period for which firm statistics are available, arrivals from Thailand totalled 635,366, up a solid 70% over the same period of 1999. Thailand is now Malaysia’s second strongest market, and is projected to have ended the year with a total of over 800,000.

If this growth continues, it soon will balance out the major deficit that Malaysia has long suffered in its overall exchange of visitors flows with Thailand. In Jan-September 2000, Malaysian visitor arrivals to Thailand totalled 766,533, and took a dip in November 2000 due to the floods in south Thailand, leading the Tourism Authority of Thailand to scramble a recovery programme to resuscitate growth from what is the leading source of visitor arrivals into south Thailand.

Malaysia has long watched this deficit with some dismay and, according to Thai tourism officials, tried to plug it by discouraging Malaysians from crossing the border into Thailand. The Malaysian media has often been accused of playing up reports of AIDS in South Thailand as part of this alleged campaign.

Now, however, there has been a major switch in strategies. Rather than discouraging Malaysians from visiting Thailand, Malaysian tourism officials have mounted a marketing campaign to get more Thais to visit to Malaysia. This, according to Tourism Malaysia’s Director-General Abdulla Jonid, is part of the tourism recovery campaign that he set into place after being called out of six years of retirement to again take the helm of an agency that he headed in the early 1990s.

Indeed, Malaysia has focussed on attracting visitors from all of the ASEAN countries with which it shares an overland border crossing. In Jan-Sept 2000, Singaporean visitors to Malaysian were up 17.6% to 3.77 million, Indonesians were up 74.5% to 391,722. Only Bruneians were down 14.5% to 145,511.

Overall, the ASEAN countries now comprise 75% of total visitor arrivals into Malaysia, as compared to only 21% of the total visitors into Thailand. The other Asian countries like Korea, Japan, China, Taiwan and India total another 10% of the total market share. Europe comprises only 3%.

Mr Jonid credits the pricing stability that came with the pegging of the Malaysian ringgit to the US$ at 3.80, down from 2.50 before the economic crisis, as a major reason for the boom.

Mr Jonid says the plan is to continue to focus on countries that have been relatively less affected by the economic crisis, such as India and China from both of which arrivals rose 222% and 137% in Jan-Sept 2000 over the same period of 1999. This is also a vast increase over the 38% and 19% increase in arrivals respectively from India and China in all of 1999 over 1998.

Indeed, the two countries lend themselves well to the marketing slogan of ‘Malaysia – Truly Asia’ which seeks to highlight the mix of Chinese, Indian and Malay cultures that make up the fabric of Malaysian society.

To better attract visitors from the two countries, the Malaysians are working hard to reduce visa barriers as well as improve access. Both China and India are a potential source of cheap labour which can threaten to flood out Malaysia with illegal immigrants. Hence, while Malaysians are not taking the same route as Thailand in granting visas on arrival, they are trying to speed up visa issuance at their respective embassies while being careful to screen out potential illegal immigrants.

In early January, Mr Jonid met with the Malaysian High Commissioner in India to look at all the problems relating to Indians visiting Malaysia. They discussed the possibility of establishing a visa-processing offices outside New Delhi, in markets like Mumbai.

They are also studying other options like the Australian visa processing system under which prospective visitors are screened electronically or the American system under which repeat visitors like business travellers can drop their applications into a box outside the diplomatic mission. These options were to be discussed further during a planned trip by the Malaysian Immigration Division chief to India.

The two countries have also upgraded their aviation agreement under which India will grant Malaysian Airlines nine more flights from India to Malaysia, including four out of Mumbai, two each to New Delhi and Bangalore and one to Hyderabad. If all begin operations as projected in April 2001, it will give Malaysia access to all the political, economic and Information Technology capital cities of India and become a major source of arrivals.

By contrast, the aviation agreement between Thailand and India has been in the doldrums for the last 20 years, with no increase in either seat capacity or the number of destinations to be served between the two countries.

The Malaysians are promising more aggressive marketing world-wide in 2001 as they, too, pursue their strategic objective of moving the national economy away from dependence on oil/gas and cash crops like rubber to service industries like tourism, finance and Information Technology.

They also have a lot of hotel rooms to fill. Between 1989-99, the number of hotels rose by 50% to reach 1,527 in 2000. The supply of rooms has risen from 61,000 in 1993 to over 140,000 in 2000. Average occupancy is around 60-70%.

Earnings from tourism totalled US$3.42 billion from tourism in 1999, up 44.7% over 1998. The previous high was in 1996 with tourism earnings exceeding US$2.97 billion. The average length of stay and daily expenditure have remained constant at 5.5 nights and US$74.4 respectively, indicating that they have not been adversely affected by the Asian economic downturn, says Mr Jonid.

The Meetings, Incentives, Conventions and Exhibitions (MICE) business too has shown positive growth. Between 1995 and 1999, the number of conventions held in Malaysia rose by roughly 25% from 663 in 1995 to over 800 in 1999. Total expenditure by the MICE segment rose from US$236.1 million in 1995 to US$303.2 million in 1999.

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