Malaysia risks falling short of tourism target despite 1Q surge — TA Securities

• Malaysia has set an ambitious target of attracting 27.3 million tourists this year, which would generate tourism receipts of RM102.7 billion and boost economic growth.

KUALA LUMPUR (June 25): Malaysia risks falling short of its own tourism target for this year, despite a surge in the first three months of the year (1Q2024), TA Securities flagged, urging the government to step up efforts to encourage tourist arrivals.

Arrivals totalled 5.8 million tourists in January to March, an increase of 33% when compared to the same period last year, but lower than the 6.82 million arrivals needed for each quarter to achieve the full-year target for 2024, TA Securities said in a note. The number of tourists was also about 8% lower than the average in the same quarter before the Covid-19 pandemic, it noted.

“There is ample room for Malaysia to maximise benefits from selected countries to achieve optimal traffic and revenue,” TA Securities said.

Malaysia has set an ambitious target of attracting 27.3 million tourists this year, which would generate tourism receipts of RM102.7 billion and boost economic growth. To achieve the goal, the government is focusing its efforts on China, among other priority markets.

Last year, the government removed visa requirements for Chinese travellers to Malaysia until December 2024, followed by an extension until the end of 2026 announced earlier this month. In 1Q2024, China was Malaysia’s largest source of tourists after Indonesia and Singapore.

More than half of Singaporeans chose Malaysia as their destination, though the share of receipts was relatively low at 19.53% compared to the global average. TA Securities said Tourism Malaysia, the main government agency promoting tourism, should focus on efforts to extend the length of stays by tourists.

“This involves implementing market prioritisation and strategic marketing plans to secure a larger share of the tourism pie,” the research house said.

Broadly, TA Securities said Malaysia should expand and improve air connectivity by increasing flight frequencies, establishing new routes, and collaborating with international airlines to make Malaysia more accessible to global tourists.

Malaysia should also further liberalise visa policies to make travel to the country easier, and consider extending visa-free entry or e-visa options to more countries, particularly those with high tourism potential, the research house said.

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