An unprecedented time for the tourism industry in Malaysia
Tourism is one of the largest industries in Malaysia, contributing 6.7 percent to its gross domestic product (GDP) in 2019. This, however, dropped to two percent in 2020. Tourism is also one of the largest sectors of employment in Malaysia, employing close to a quarter of the total workforce in Malaysia. However, the COVID-19 pandemic resulted in a drastic decline in the year-on-year growth of tourist arrivals, as Malaysia closed its borders to international visitors and restricted entry for non-residents. Tourism-related businesses saw a significant decrease in earnings as tourism receipts all but dried up.To make up for the loss of international tourism, the Malaysian government encouraged domestic tourism during the two years of the pandemic. However, the domestic tourism expenditure was not able to mitigate the losses in this sector, especially since domestic tourism was hampered by the lockdowns and travel restrictions imposed within the country.
Recovering from the impact of COVID-19 on the tourism industry
The Malaysian government has recently announced a ten-year plan to aid the recovery of its tourism sector. The National Tourism Policy 2020-2030 has identified promoting and building sustainable tourism as one of its main strategies for recovery. It has also highlighted ecotourism, adventure, and sports tourism, as well as island and coastal tourism, among the travel experiences to promote.Despite the government’s plans, recovery to pre-pandemic levels in the tourism sector depends heavily on events and factors outside Malaysia. The majority of international tourists to Malaysia come from the ASEAN countries, followed by China. As of the third quarter of 2022, China is still pursuing a zero-COVID-19 strategy, with strict regulations on outbound travel. The lack of Chinese tourists would significantly impact Malaysia’s tourism revenues, as China was the third largest contributor to Malaysia’s tourism receipts.
