Malaysia's Tourism Industry

Over the last few years, the economy of Malaysia has experienced a significant transformation. In less than three decades, this South East Asian country has gone from relying mainly in mining and agricultural exports to being considered one of the economies with the most potential in the 21st century. The diversification of the Malaysian economy has brought about the development of the local tourist industry, which nowadays constitutes the nation's fifth most important source of income. How has the tourist industry come to play such an important role in the local economy, and what are the prospects for the future?

Tourism in Malaysia: a thriving industry

There are two governmental agencies that oversee all aspects related to the tourist industry in Malaysia. These are the Ministry of Culture, Arts, and Tourism and the Malaysia Tourism Promotion Board. The creation of these agencies was crucial for the development of the tourist industry in the country, which prior to the 1980s was virtually inexistent.

During the 1990s, the Malaysia Economic Transformation Programme included the tourist industry as one of the 12 key economic areas that would help secure the country's economic growth in a sustainable manner. It was during this decade that the Malaysian economy experienced its most significant growth levels, which earned the country the inclusion in the list of "Asian Tiger Cub Economies".

One of the most influential events in the development of the Malaysian tourist industry was the launch of a worldwide marketing campaign in 1999, which promoted the country as the foremost tourist destination in Asia with the slogan "Malaysia, truly Asia". The campaign was a clear success, as in just one year the number of visitors to the country rose to 7.4 million.

According to a recent report published by the BBC, in 2013 Malaysia was among the top ten most visited countries in the world. During 2012, Malaysia welcomed more than 25 million tourists, who spent over $20 billion during their stay in the country. Last year, Malaysia's capital Kuala Lumpur was the 8th most visited capital in the world with 9.2 million overnight visitors, being ahead of other highly popular tourist cities such as Barcelona, Hong Kong, Amsterdam, or Rome. 2012 was also a record year in terms of the total expenditure that tourists made during their stay in Malaysia, as tourist receipts amounted to 60 billion Malaysian ringgit (approximately $20 billion). This figure represents an impressive 4.2 per cent increase over the previous year.

Tourists in Malaysia: where do they come from?

Due to geographical proximity, the majority of tourists in Malaysia come from Singapore, as every month more than 1 million Singaporeans visit their neighbouring country. Next are tourists from Indonesia, China, Brunei, and Thailand. The number of Indian visitors has also increased significantly, as it has gone from barely 45,000 in 1999 to 638,000 in 2012. Malaysia also attracts large number of tourists from the Philippines, Japan, Australia, the United Kingdom, South Korea, and the USA.

The most popular activities and tourist destinations in Malaysia

The capital city Kuala Lumpur is known for its numerous shopping and entertainment opportunities. Other popular tourist destinations include the islands of Penang and Langkawi, which offer watersports and upscale accommodation; the Cameron Highlands, a centre for eco-tourism; and the cities of Kota Kinabalu, Miri, and Kuching, which are the gateways to Borneo's breathtaking natural landscapes, and which offer great opportunities for wildlife watching and for the practice of adventure sports.

Tourism in Malaysia: challenges and opportunities

The Malaysian government aims to continue promoting tourism as one of the main drivers of the local economy. According to government forecasts, by 2020 tourist revenues are expected to bring in more than $60 billion and over 36 million visitors a year. To achieve that, is it essential that the tourist industry reduces the environmental impact of its operations, which for some years have resulted in deforestation and pollution.

Moreover, it will be necessary to capitalise on the country's retail facilities, which currently have placed Malaysia as the world's 4th best shopping destination. Another important element that can help drive the growth of the local tourist industry includes the establishment of the Malaysia's Major Events agency, which hopes to firmly establish the country as one of the leading destinations in the Asia-Pacific region through the celebration of sports, entertainment, and art events, such as the Malaysian Grand Prix, the ATP Tournament, and the Art Expo Malaysia.

Likewise, the renovation of heritage sites in the Sarawak and Sabah regions is expected to attract more tourists to areas outside peninsular Malaysia. Last but not least, the Malaysian government is in the process of devising a number of economic strategies with the objective of encouraging further private investment in the major tourist developments of this country.