Tuesday, September 11, 2007

Tourism set to stay a star performer in Malaysia's Economy

TOURISM, a star performer of the Malaysian economy, is expected to remain a key focus in years to come.

Tourist arrivals are likely to in-crease to 21.5 million next year, which is expected to bring in RM49bil and contribute 7.2% to the nominal Gross Domestic Product (GDP).

By 2010, tourist arrivals are likely to increase to 24.6 million, generating gross receipts of RM59.4bil and providing some 520,000 people with jobs.

To achieve this, in addition to Visit Malaysia Year 2007 (VMY2007) campaign, the Government is embarking on strategies to raise the image of Malaysia into a premier and value-for-money destination.

This includes giving more attention to the longer haul and higher yield segments.

The private sector, too, is expected to come up with more interesting, creative and value-for-money products especially in the development of niche products.

The Government has called on the private sector to raise service standards and quality to meet the demands of high-end tourists.

Showtime: Dancers from the Culture, Arts and Heritage Ministry performing at a recent event in Klang to commemorate the nation's 50th birthday as well as to launch the Klang Tourism Fest.
Domestic tourism would also play an important role with more being done to attract Malaysians to travel within the country.

This reduces foreign exchange outflows and can offset fluctuations in foreign tourist arrivals arising from external shocks such as natural disasters, pandemic diseases and security threats.

The factors driving domestic tourism include rising household incomes, improved quality of life and the five-day-work-week for the private sector which resulted in Malaysians travelling more often and taking more holidays.

Over the past 30 years, the tourism industry has contributed significantly in terms of foreign exchange earnings and job creation.

Tourist arrivals have increased by 15-fold to 17.5 million in 2006 compared with only 1.2 million in 1974.

Gross earnings from tourism increased to RM38.2bil in 2006 accounting for 6.7% of nominal GDP.

The first six months of VMY 2007 has shown even higher tourist arrivals and it is anticipated that gross receipts would increase further and account for about 7.1% of GDP this year.

Statistics show that the largest number of tourists are from Asean countries, followed by Japan, China and Australia.

The Middle East and India are seen as markets of growing importance.

As for job opportunities, tourism-related activities provided 492,000 direct employment opportunities last year or 4.4% of the total work force.

However, the employment creation is in fact even higher – given the strong linkages the tourism industry has with other segments of the economy such as transport, retail, utilities, food and beverages, and financial services.

As for tourism and the balance of payments, gross receipts of the industry have been steadily increasing at an average of 14.1% per year from 2000 to 2006 (with the exception of 2003 due to the Severe Acute Respiratory Syndrome (SARS) outbreak and tensions in the Middle East.)

However, travel outflows are also on the rise as more Malaysians travel abroad for business, leisure, health, education and pilgrimage.

Nevertheless, the strong tourist spending has cushioned the outflows in the services account.

Source : STAR
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