Tourism Industry of Malaysia

Topics: Tourism, Economics, Malaysia Pages: 5 (1486 words) Published: November 23, 2010
Tourism Industry of Malaysia (Background)

The early 70s spelt the beginning of a `new era`. The old Tourism Department of 1959 was then upgraded into the Tourism Development Corporation.

The formation of the Tourism Development Corporation (TDC) in 1972 and placing it under the purview of the Ministry of Trade and Industry (MITI) for strategic planning and focus charted a new era in the history of the tourism industry. That was the same year Malaysia Airlines was formed (1972). It was the dawn of a new beginning and both TDC and MAS were tasked to put Malaysia on the world tourist map. Since then, the Malaysian economy remains relatively robust with manufacturing and tourism taking the lead.

Today, the tourism industry has experienced a rapid growth and gained an importance in the Malaysian economy. It is the second largest foreign exchange earner, after manufacturing. This is in line with the government’s objective to accelerate the domestic private sector and stimulate the services sector to spearhead economic growth.

Tourism’s Contribution Receipts

In the context of tourism receipts, the contribution from this sector has been very encouraging. For instance, the Malaysian economy registered RM17.40 billion in receipts from 10.22 million visitors in 2000 (just a year after implementing the three-pronged action).

This constituted a 28.9 per cent increase between 1999 and 2000.

With the exception of 2003 (SARS & Gulf War), this upward trend continued until today.

From the tourism receipts (tourism revenue) contribution, there exists a steady growth. For example, tourism receipts increased from RM17.40 billion in 2000 to RM24.20 billion a year later and then increased further to RM25.80 billion (2002), RM29.7 billion (2004) and RM32.00 billion in 2005. Last year Malaysia received RM36.3 billion (USD10.4 billion) in tourism receipts.

The top 10 markets in 2006 were Singapore (9,656,251 arrivals), Thailand (1,891,921 arrivals), Indonesia (1,217,024 arrivals), Brunei (784,446 arrivals), China (439,294 arrivals), Japan (354,213 arrivals), India (279,046 arrivals), Australia (277,125 arrivals), United Kingdom (252,035 arrivals) and the Philippines (211,123 arrivals). Gross Domestic Product (GDP) Malaysia's services sector is the largest sector in the economy, contributing 52.4% to GDP and 48.6% to total employment in 2000. The government views the services sector as a catalyst for growth Last year, the national GDP was at RM1,098.3 billion or USD 313.8 billion (constant 1987 prices) with a growth of 5.9 % of which RM36.3 billion or USD 10.3 billion came from the tourism sector thus making it as the second economic contributor for 2006. The Services Sector accounts about 54 % of the national GDP. Jobs / Employment Out of the total national workforce, 51% (2005) were in the services sector. This translates into almost 5.4 million out of the 10.73 million of the national workforce being employed either directly or indirectly in the tourism sector, be it in hotels, restaurants, travel agencies, airlines, transportation etc…By providing job opportunities, the tourism sector has played a role in keeping unemployment down to a low at 3.5% (2005/2006). Retail Sector With the introduction of the MEGA SALE Carnival in 1999, the economy received a boost from the retail sector. The Malaysian tourism authority has undertaken efforts to position Malaysia as a leading international shopping destination. The Mega Sales Carnivals were held on a nationwide basis were successful in attracting more shoppers. Each Mega Sale has managed to attract additional half a million foreign visitors and day-trippers from theneighbouring countries, on top of the normal tourist arrivals. The effort facilitated the growth in tourism expenditure and consumer demand, which enhanced the growth of retail trade.

For instance, in 2003, the retail sector made up just over 13% of Malaysia’s gross domestic product (GDP) and employed about...
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