Bigger budget allotments for Malaysia’s tourism in the works

Grants to encourage private sector players to promote the destination overseas

Malaysia is planning generous budget allocations to tourism, including RM100 million (US$24 million) in matching grants to support the private sector in promotional and marketing campaigns overseas.

The country’s finance minister, Lim Guan Eng, announced plans for the grant scheme while tabling the 2019 Budget.

The scheme could help the Ministry of Tourism, Arts and Culture Malaysia to achieve its target of 30 million foreign tourist arrivals by 2020, contributing RM100 billion in tourist receipts. Last year, the tourism industry contributed 14.9 per cent of the national GDP or RM201.4 billion.

For some inbound tourism players, grants are much needed as international marketing can be a costly exercise.

Uzaidi Udanis, president, Malaysian Inbound Tourism Association, said: “The cost of promotions is not cheap. For example, to participate at WTM in London, each tour operator has to spend at least RM30,000 for three days.”

Moreover, Sutra Group of Companies managing director, Syed Razif Al-Yahya pointed out the private sector’s complementary role in destination marketing.

He explained: “Tourism Malaysia may not have a physical presence in certain overseas markets due to budget constraints but inbound operators strong in those markets could apply to use the funds to do their own marketing.”

Lim further shared that half the country’s tourism tax proceeds, estimated at RM50 million, will be shared with the state governments to encourage and assist tourism activities in these states.

In addition, the government will make available RM500 million worth of loan facilities via the SME Tourism Fund with SME Bank at a two per cent interest subsidy. This will assist handicraft makers and homestay operators to expand their businesses.

The finance minister added that the federal government will provide tax free incentives to Swettenham Pier in the form of duty-free shops in a bid to improve cruise tourism.

Moreover, the Langkawi’s duty-free island status will be further expanded and enhanced, while Pangkor Island will become the country’s second duty-free island after Langkawi.

Meanwhile, to encourage domestic tourism, the government proposed to impose a departure levy for all outbound travellers by air starting June 1, 2019.

The proposed rate is two-tiered, RM20 for outbound travellers to ASEAN countries and RM40 to other countries, which the government said is consistent with Thailand (US$20), Hong Kong (US$15) and Japan (US$10).

-TTG Asia.