Monday, January 01, 2007

Tourism Related Firms in the Spotlight this Year

PETALING JAYA: Tourism-related companies will be a thematic play this year in view of the Visit Malaysia Year (VMY) 2007 campaign, according to analysts.

“Airlines will be the main beneficiaries while shares of consumer-linked companies such as retail, food and beverage, and hotels will benefit indirectly,” said a senior analyst with a local research house.

He said that in general, the campaign would provide a boost to the earnings of these companies, barring unforeseen circumstances.

“There are certain risks such as the threat of political instability in neighbouring countries and natural disasters such as floods which may affect tourist arrivals,” the analyst said.

“Nevertheless, on the whole, the prospects look bright.”

Meanwhile, RAM Consultancy Services Sdn Bhd managing director and chief economist Dr Yeah Kim Leng said VMY2007 should be a much-anticipated event for the retail sector.
“If successfully promoted, it should help to increase the number of non-Asean tourists, particularly the higher spending, high income tourists from Europe, America and Northeast Asian countries.”

From an economic viewpoint, Yeah said, VMY2007 would have a significant impact on the local economy but this depended much on the average length of stay and amount spent per visitor.
“Both the airline and hotel sectors should see higher traffic volumes and occupancy rates in line with the anticipated increase in tourist arrivals,” he said.

“Given that retail and hotel industries are labour-intensive sectors, the impact on the local economy will be felt not just in terms of stronger growth but also higher disposal income growth for those employed in industries such as these,” Yeah added.

Tourism contributes as much as 12% to 14% of the country‘s gross domestic product, with the bulk of the spending benefiting the retail, hospitality and transport industries.

Besides state events, a total of 240 programmes have been planned for VMY2007 consisting of 50 major events.

Source : STAR
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