KUALA LUMPUR (Dec 6): Malaysia's tourism sector is anticipated to fully recover by next year, with the number of tourist arrivals seen surpassing pre-Covid-19 levels, driven by better flight connectivity and increased visitors from China and India, said Tourism Malaysia deputy director general (promotion) Datuk Musa Yusof.

Speaking at the Bursa Malaysia-HLIB Stratum Focus Series XVI (16th) event titled “Tourism: Welcoming A New Dawn” on Wednesday, Musa cited revenge travel in the post-pandemic era, which reflects a surge in tourist activity as individuals explore multiple destinations for their holidays.

“More eco-friendly infrastructure and sustainable options are also increasingly sought after among tourists, who are more often than not, business travellers seeking leisure time, and recently after the pandemic, digital nomads who can ‘work from anywhere’,” he said.

Following a remarkable increase to 14.4 million tourist arrivals in the first nine months of 2023, Malaysia has revised its full-year forecast upwards by 18.63% to 19.1 million, up from its initial forecast of 16.1 million, said Musa.

“We hope the 2024 [tourist arrivals] figure will be higher than pre-Covid-19 levels,” Musa said without disclosing the forecasts.

“We will head towards the third phase of our strategic plan: Strengthen & Boost, which will also be the year where we gear up for the upcoming Visit Malaysia Year 2026, a benchmark that is hoped to bring us even further than our pre-pandemic success”.

In 2019, Malaysia recorded 26.1 million international visitors, before dropping by 83.4% to 4.33 million in 2020 — the year when the Covid-19 outbreak first emerged. The following year, in 2021, the number plummeted further to a mere 130,000.

With the announcement of Malaysia's transition from the Covid-19 phase to the endemic phase by the previous government under Datuk Seri Ismail Sabri Yaakob's administration, tourist arrivals rebounded to 10.1 million in 2022.

According to Musa, Tourism Malaysia will continue to foster smart partnerships and collaborations with both local and international industry players to further boost demand for Malaysia’s tourism offerings.

He said, focus on targeted and fast conversion markets will be heightened for more effective marketing as well as the development of niche products and services, such as Muslim-friendly tourism, medical tourism, sports and the Malaysia My Second Home (MM2H) programme.

Meanwhile, the current depreciation of the Malaysian ringgit against the US dollar will also boost the country’s tourism sector, said Hong Leong Investment Bank (HLIB) head of research Jeremy Goh.

“In terms of currency depreciation, we are actually the second after Thailand in the Southeast Asia region, so in that perspective, we are relatively cheaper. Our hotel costs are also cheaper, compared to Singapore and Indonesia.

“[Weak] ringgit is actually positive for tourism — everything comes relatively cheaper for foreigners. Bear in mind, our number one source of tourists is Singapore. So, as we can see, the strong recovery in tourism last year is not driven fully by the Chinese tourists,” said Goh.

At the time of writing, the ringgit slipped 0.09% to 4.6675 against the US dollar. Year to date, it has fallen 5.87% against the greenback.

According to Tourism Malaysia, the post-pandemic top 10 ranking of tourist arrivals to Malaysia is led by visitors from Singapore, followed by Indonesia, Thailand, China, Brunei, India, South Korea, Vietnam, Australia and the Philippines.

Asked on the risks for the tourism sector due to a rise in Covid-19 cases and high transportation costs amid recession fears, Goh said: “I think people around the world have started to treat the virus as endemic, so we have to accept that and life goes on. On the transportation cost, RON95 petrol is the cheapest in Malaysia. We will see how the government will roll out the targeted subsidy, and what kind of mechanism [the government will announce]. But it is still too early to comment on this."

The government is expected to roll out a targeted subsidy programme for RON95 petrol in the second half of 2024, Economy Minister Rafizi Ramli announced last week. He cited a system in which the top 20% of income earners are recipients of the 53% of blanket fuel subsidies, which is neither sustainable nor fair.