Malaysia's tourism budget cut to impact arrivals

Malaysia’s Ministry of Finance will be reviewing Tourism Malaysia’s promotional and advertising budget, which had been slashed by 25 per cent or RM50 million (US$12 million) from an initial budget of RM200 million earlier this year.

The budget cut was the result of tumbling oil prices which had forced the government to trim its spending and operating expenditure.

According to a report on the Sunday Star, Chua Tee Yong, Malaysia’s deputy finance minister had said: “We will look into the issue, but we need to take into consideration the fiscal demands on the government.”

When contacted by TTG Asia e-Daily, Hamzah Rahmat, president of the Malaysian Association of Tour & Travel Agents, said: “When the promotional and advertising budget is cut, it means less tourists will visit Malaysia. As tourism is the second largest foreign exchange earner, agencies that bring revenue such as Tourism Malaysia should not have its budget cut.”

Last year, tourism receipts rose by 10 per cent to RM72 billion from RM65.4 billion in 2013. The Malaysia Year of Festivals 2015 campaign is expected to help the country achieve the target of 29.4 million arrivals and RM89 billion in tourism receipts this year.

However, with the budget cut as well as dismal 1Q arrival figures for 2015, which saw a drop of 8.6 per cent year-on-year from seven million arrivals in 1Q2014, trade members have expressed doubts that this year’s target will be met.

Mint Leong, secretary-general of the Malaysian Inbound Tourism Association, said: “To maximise yield with a reduced budget, Tourism Malaysia should target key markets that can bring revenue to the country, such as China and India. We should implement visa-free travel for tourists from both countries as these are good markets with a big population of middle and high net income individuals."

Arokia Das, senior manager at Luxury Tours Malaysia advocates Tourism Malaysia to have dialogues with the travel trade on what will sell. “With inputs from industry players, there can be a more holistic approach for promotions going forward,” he said.

Ally Bhoonee, executive director at World Avenues, meanwhile, urges the Malaysian NTO to conduct more B2B roadshows in key markets while adopting a more stringent approach with mega fam trips to optimise funds.

He remarked: “What’s happening now is that agency bosses are extending the invitations to junior staff instead. Some of them do not speak English and they don’t know the product. How will they go back and sell Malaysia? We need to bring in decision makers and product managers who can feature the destination in their brochures and websites."

-TTG Asia.