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Tourism in Malaysia

Linda Bethke
May 11, 2020

2020 was to be the big year for Malaysia's tourism sector. Hotels and airlines were expecting millions of guests. What came was a virus. And with it, the worst crisis Malaysia's tourism industry has ever faced.

Empty sun beds are usually hard to find on the Malaysian holiday island Langkawi
Empty sun beds are usually hard to find on the Malaysian holiday island LangkawiImage: Malaysia Tourism Promotion Board

This year, tourism was supposed to boom like never before. Worldwide, the advertising drive for the big campaign "Visit Malaysia 2020" was set in motion. The Southeast Asian country was expecting around 30 million tourists and revenues of a solid €20 billion ($21.5 billion). However, the COVID-19 pandemic has put a damper on all of this, particularly affecting the more than 3.5 million people working in the tourism industry.

The hotel sector has been hardest hit

Until recently, most visitors came from Singapore, Indonesia and China. But the Southeast Asian country was also becoming increasingly appealing to European tourists.

Since the entry ban, many hotels are struggling to survive. "It can be said that Malaysia will lose at least 60% of its tourism business by 2020," says Yap Lip Seng, CEO of the Malaysian Hotel Association. The result: wage cuts and unpaid holidays. This is the only chance to save jobs. But often, smaller hotels cannot afford this. Thousands of employees in the industry will find themselves on the street.

Hotels on the popular holiday island of Langkawi are also waiting for an end to the crisis
Hotels on the popular holiday island of Langkawi are also waiting for an end to the crisisImage: Malaysia Tourism Promotion Board

To support the businesses, some hotels are being used as quarantine centers for Malaysians returning from abroad. The government promised the equivalent of €30 per room per night. More than 23,000 rooms appeared on the list. They were nevertheless not fully occupied.

The Malaysian hotel association therefore assumes that the emergency scheme will not lead to a significant upswing: "It still helps the participating hotels, considering that there is almost no income at all during this period," Yap says. Around 35% of hotels in Malaysia had to close temporarily. According to a survey, around 15% of the hotels believe that they will not survive the coronavirus crisis and will have to close completely.

Cooking on a back burner

The situation is similarly dramatic in the catering industry. Bars, which in this Muslim country are mainly frequented by expats and tourists, are temporarily closed. Thousands of restaurants are facing bankruptcy.

As diverse as the cultures in this Southeast Asian country are, so is the culinary range. But no matter whether Malaysian, Thai, Chinese or Indian restaurants — they are all running their business on a back burner. If at all, they currently only offer take-away meals. Many establishments are completely closed — some probably forever.

The small boats on the Malaysian island Penang are waiting for visitors
The small boats on the Malaysian island Penang are waiting for visitorsImage: Malaysia Tourism Promotion Board

The months of slump have hit thousands of street stalls even harder. Especially at sights like the popular limestone Batu Caves, tourists are the main source of income. Without them and without social security, the livelihood of many families is jeopardized. Non-profit organizations distribute food to those who are now left with nothing.

The government lifeline

The Malaysian government wants to push ahead with a merger of the national airline, Malaysia Airlines, and the low-cost Asia Airlines in order to save both airlines in the coronavirus crisis. The country's two largest airlines have been hit hard in two ways.

On the one hand, the otherwise lively domestic traffic to the many Malaysian islands has disappeared, on the other hand there are hardly any international flights. Although a merger was already being discussed before the COVID-19 pandemic, the economic crisis could now be the deciding factor.

Employees in the Bako National Park on the Malaysian part of the island of Borneo are hoping for better days
Employees in the Bako National Park on the Malaysian part of the island of Borneo are hoping for better daysImage: Malaysia Tourism Promotion Board

The total sum for the wage subsidy program was increased to just under €3 billion. This is intended to especially help small and medium-sized companies in the sector. This is to enable employers to retain their workforce over this period and keep the industry going. The subsidy is to be granted until December.

#TravelLater: Travel to help the country recover

Domestic tourism will play an important role in the industry's recovery. Therefore, in its social media posts, the Malaysian Tourist Board encourages locals, under the hashtag #TravelLater, to travel in their own country after the crisis in order to boost the local economy. "It may take months for the tourism industry to recover from the effects of COVID-19 and we need all the help we can get to rebuild," said Datuk Musa Yusof, director general of Tourism Malaysia.

Malaysia hopes for rapid recovery of tourism

Sultan Abdul Samad building, Kuala Lumpur, Malaysia  (Malaysia Tourism Promotion Board)
Visitors to the capital Kuala Lumpur love the Sultan Abdul Samad building with its impressive Moorish architectureImage: Malaysia Tourism Promotion Board

The biggest challenge will be to restore the trust of domestic and foreign tourists. The "Clean and Safe Malaysia" campaign is one of the ways in which this is to be achieved. The aim is to award certification to hotels that meet the requirements of the relevant authorities.

In addition, airlines, hotels, transport companies and other operators are to cooperate and offer joint travel packages. This will reduce costs for businesses and visitors and make the country's tourist industry more competitive. The tourism sector in Malaysia is expected to slowly recover at the end of the year and stabilize by June 2021.

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