Economists expect Chinese tourists to boost Malaysia's tourism

This photo taken on June 18, 2023 shows a view the Strait of Malacca seen from Malacca, Malaysia. (Xinhua/Cheng Yiheng)

CGS CIMB said in its recent report that China's reopening gains could provide further impetus to Malaysia's economy and current account surplus, especially in 2024.

KUALA LUMPUR, July 5 (Xinhua) -- Malaysian economists have foreseen the potential growth of Chinese tourists to boost the Southeast Asian country's tourism industry.

PublicInvest Research said in its recent report that it expects China to contribute to the recovery of the global tourism industry, including Malaysia.

According to the research house, the resurgence of Chinese tourists will serve as a significant positive factor for the ASEAN region, albeit with a gradual recovery trajectory.

It is noteworthy that the total number of tourists visiting ASEAN countries has yet to surpass pre-pandemic levels.

Artists perform a dancing at the Penang Chinese New Year Celebration in George Town, Penang, Malaysia, Jan. 28, 2023. (Photo by Chong Voon Chung/Xinhua)

While the Chinese government itself has actively encouraged tourism, the research house noted that the backlog of passport and visa renewals is substantial, necessitating a considerable amount of time to be cleared.

It anticipated that tourist arrivals may not surpass the previous peak recorded in 2019 until at least the first half of 2024.

PublicInvest Research also said that the reopening of China has yielded a remarkable influx of 178,150 Chinese tourists to Malaysia in the first quarter, a stark contrast to the meager count of fewer than 1,900 visitors during the corresponding period in the preceding year.

Its assessment suggests the potential for a complete recovery to the pre-pandemic level of 3.1 million Chinese tourists observed in 2019 by the first half of 2024.

In light of these favourable trends in tourist arrivals and the subsequent revitalisation of tourism, it anticipated the creation of additional employment opportunities and heightened demand for goods and services within Malaysia's tourism sector.

Tourists cruise on Malacca river in Malacca, Malaysia, Sept. 19, 2020. (Xinhua/Zhu Wei)

Consequently, this development is poised to provide crucial support to Malaysia's domestic demand, said the research house.

It is noted that the tourism industry in Malaysia is placing considerable emphasis on a substantial resurgence in tourist arrivals during the second half of 2023, propelled by measures to address visa approval challenges and enhance flight connectivity.

Malaysia's tourist receipts amounted to 28.2 billion ringgit (6.05 billion U.S. dollars) in 2022, compared to 86.1 billion ringgit in 2019. The Malaysian government has set an ambitious target of attracting 16.1 million tourists this year, signifying a notable 60-percent surge compared to the previous year, with the objective of generating 49.2 billion ringgit (10.55 billion U.S. dollars) in tourist receipts.

Hong Leong Investment Bank Research also sees China as a key ingredient to Malaysia's tourist concoction in its recent report.

"The Chinese are not only important in terms of tourist numbers to Malaysia, they are also 'high-value tourists'," it said.

Tourists overlook the Malacca Strait on the St. Paul's Hill in Malacca, Malaysia, Sept. 18, 2020. (Xinhua/Zhu Wei)

It is noted that prior to the pandemic, China was the third-largest source of tourists to Malaysia, after Singapore and Indonesia.

However, in terms of contribution to tourist receipts, China ranks higher at second, owing to their stronger spending power.

From 2017-2019, the typical Chinese tourist spent 661 ringgit to 768 ringgit per day in Malaysia, which was 19 percent to 72 percent higher than what the average tourist did.

CGS CIMB also sees upside from a pick-up in Malaysia's tourism sector over the next 6 to 18 months underpinned by the potential growth of Chinese tourists in its recent report.

It said that China's reopening gains could provide further impetus to Malaysia's economy and current account surplus, especially in 2024.

Malaysian tourism sector recently called for improvement of related government departments to improve and attract more international tourists.

 Aerial photo taken on April 11, 2019 shows a view of Malacca, Malaysia. (Xinhua/Zhu Wei)

The Malaysian Association of Tour and Travel Agents (MATTA) said in a statement that a review of the current procedures on the handling of traveler with Not To Land (NTL) status is crucial to preventing abuses as Malaysia gears up to receive more international tourists.

MATTA President Tan Kok Liang said it is imperative that the government does all it can to uplift the image of Malaysia as a safe and attractive tourism destination by eliminating corruption at all levels at the Kuala Lumpur International Airport (KLIA), which is the main gateway.

Malaysian Prime Minister Anwar Ibrahim visited the KLIA on Sunday to ensure the Royal Malaysian Customs Department (JKDM) and the Immigration Department (JIM) are under control.

According to Malaysian official news agency Bernama, Anwar said the government will study measures to improve the condition of the departments.

"There are some customs weaknesses which need to be remedied. Generally, the majority of the services by immigration employees and personnel is proceeding smoothly. There are some problems. We would investigate to improve and appropriate actions would be taken if there are flaws." (1 ringgit equals 0.21 U.S. dollar)