While growth in recent years has slowed for various reasons, our tourism industry has grown tremendously over the last decade both in terms of visits by foreign nationals and the revenue they have generated for local businesses engaged in the hospitality trades. While results have been impressive, one cannot help but wonder if, in fact, they could have been a great deal better if the right strategies and concepts had been employed. So, like Oliver, I want to know if there is more to be had. Are there, in fact, opportunities that we can leverage and if so, what change will be needed to bring these about?
The Important Business of Tourism
The hospitality industry is made up of businesses that receive and entertain guests, visitors, or strangers, with liberality and goodwill. These include hotels, restaurants, casinos, catering, resorts, clubs and any other service that deals with tourists. Tourism is one of Malaysia’s most important sources of income contributing about 7 percent or RM48bil to Malaysia’s GDP. In Asia China attracts the greatest number of tourists. Malaysia is next in line after China. Last year we attracted 22,052,488 foreign tourists who collectively generated RM49,561,200,000 worth of receipts compared to 5,550,748 tourists and RM8,580,500,000 in 1998, increases of 3.97 and 5.78 percent respectively.
The Current Outlook
Speaking at a briefing on the incoming Pata Tourism Forecasts 2009 to 2011 in Bangkok in April, John Koldowski, Strategic Intelligence Director of the Pacific Asia Travel Association (Pata), noted that while the current financial crisis is bound to have an impact on the people who would have otherwise chosen to visit Malaysia (and the money they would have spent), it would also have an impact on people intending to take more expensive holidays who, now downgrading their own expectations, may visit Malaysia instead. “You lose some and gain some,” said Koldowski. Many believe the hospitality industry is in for a hard time until the employment situation improves. Consumer spending continues to be cautious and many a popular tourism destination has suffered. The United Nations World Tourism Organisation (UNWTO) is forecasting at best flat growth for international tourism and even allows that growth may contract by two percent. It’s generally agreed that our tourism business will be affected by the global economic situation. Our ministry of tourism has lowered its 2009 tourist arrivals forecast by 10 percent to 20 million.
Is Malaysia Targeting The Right Markets?
Like many other countries, Malaysia is hoping domestic tourism will help to improve our tourism prospects or at least hold things together for the time being. Ngiam Foong, president of the Malaysian Association of Tour and Travel Agents (MATTA) is among those who believe that it is the long haul tourist, both foreign and domestic, who will be most affected by the current global economic situation, arguing that the focus now ought to shift to the regional and domestic markets. Certainly as far as the near term goes, this sounds pretty reasonable. But what of the longer term view? Malaysian Association of Hotels (MAH) vice-president Ivo Nekvapil believes we can do better. It is his opinion that Malaysia can attract better quality tourists by setting our sights on the right markets. No doubt there are others who share his view. It is, after all, a view that makes sense when you take a look at some of the numbers.
Since 1998 Singaporeans have made up no less than half of Malaysia’s foreign tourist visits. Given the size of the population of Singapore it is reasonable that these are made up of frequent, short, stays. In 2008, 11,003492 or 49.9 percent of our tourist visits were from Singaporeans. At present almost ninety percent of foreign visits to Malaysia are from tourists from Asian markets, with, as we have just noted, a huge chunk coming from Singapore. Apart from Singapore, our other major markets are Indonesia (11 percent), Thailand (6.8 percent), Brunei (4.9 percent) and China (4.3 percent). More poorly represented are those markets where we expect tourists to have bigger pockets, like the U. K. (1.7 percent), the U. S. A. (1 percent), Germany (0.5 percent).
Malaysia also benefits from an active domestic market. At 36,253,589 guests, well over half the 61,648,201 hotel guest registrations in 2007 were by Malaysians. While this would surely, given the size and demographic profile of our population, include a great deal of business travel, it is nevertheless a testament to an effective program to encourage Malaysians to travel and holiday in their own country.
Looking at distribution of our tourism product gives us further food for thought. Based on 2007 annualised figures for hotel guests by state, 26.92 percent of hotel guests stayed in hotels in Kuala Lumpur. The figure become even more pronounced (33.99 percent) when we extract and look at the figures for foreign guests or non-Malaysians.
The next most important destination by results appears to be Pahang with 11.95 percent of hotel guests staying there (11.44 percent of foreign hotel guests) followed by Sabah at 10.01 percent (10.48 percent among foreigners), Penang at 8.41 percent (9.45 percent among foreigners) and Kedah at 7.35 percent (7.4 percent among foreigners).
I have often argued that Kuala Lumpur is not Malaysia, or more appropriately, Kuala Lumpur does not reflect what Malaysia really is. Come to KL and you might as well be in any other cosmopolitan metropolis. In no way am I knocking the importance of a more affordable clubbing and shopping experience for Singaporeans or the obvious benefits of the various, ahem, attractions, at the top of the hill yet I cannot help but feel that the figures would pan out somewhat differently if we took out Singaporean visitors as well as visitors to Genting Highlands, Pahang. This is surely a pity given all the unique experiences that we have to offer.
How Did We Get Here And Where Could We Be?
There are some who believe that Malaysia should brand itself as a value-for-money tourist destination to exploit consumer sentiments and behaviour during the current global economic situation. Not cheap, mind you, but value-for-money. Both Shaharuddin Saaid, Malaysian Association Of Hotel Owners (MAHO) executive director and MATTA’s Ngiam agree.
The value that Shaharuddin refers to has to do with the variety of attractions he says Malaysia presents in the form of nature, man-made attractions, culture and he stresses, most importantly, the people. “The infrastructure, facilites and services are similar to many First World countries and the cost of visiting Malaysia is still comparatively very cheap,” he explains.
He adds, “those good attractions must continue to perform, be well maintained and be improved from time to time to keep on bringing in tourists to the destinations in the future. Malaysia should explore our tourism assets and exploit them to our advantage to attract tourists, especially the niche, up-market, high spending and long stay tourists.”
According to Shaharuddin Malaysia should be promoting eco-tourism, medical tourism and meetings, incentives, conventions and exhibitions (MICE).
Pointing to Malaysia’s current focus on the Asean and regional markets, Ngiam is of the opinion that Malaysia should focus on the interests of people in those markets which, according to him include, not only MICE and eco-tourism but shopping which he sees as the main activity of interest.
But is selling “Malaysia Truly Asia” to an “Asian” market the right thing to do? Nekvapil feels that branding “Malaysia Truly Asia” is something that ought to be maintained. “You cannot keep changing brand and taglines. You must keep them going if they are successful, and the present campaign is very successful. For instance, Singapore’s ‘Singapore Girl’ has been going on more for than 30 years.”
I agree that consistency is a key attribute of successful branding, though of course “Singapore Girl” was the marketing concept identified and developed in 1972 by Ian Batey for Singapore Airlines and not the country.
Of Features, Benefits
Features are swell but benefits sell. Having state of the art medical facilities I would imagine is a cost of entry to the medical-tourism market just as being successful in MICE marketing is predicated on having excellent features and conveniences there. And no doubt, any other country competing for these or eco-tourism or shopping and so on would ensure they have excellent features in their chosen arenas for the global tourist dollar. All things being equal then, it is the state of the heart and not the state of the art that, in my opinion, can make the biggest difference in having someone choose a Malaysian destination over that of any other country. The other thing I want to say is that we have gotten to where we are now, largely because of efforts to market the country but I think that it is timely to consider parallel marketing of specific states because of their own unique DNAs. Perhaps we could not do that effectively before because of budgetary constraints and so decided to concentrate efforts on what could be seen as the lowest common denominator.
Focus is essential to effective branding, positioning and marketing. And going forward we may need to, perhaps, sacrifice the efficiency of how we have been doing things so far, in favour of more effective measures to ensure sustainability of Malaysia’s success as an important tourist destination and therefore the success of our local hospitality industries.
It is because we have so many unique tourist experiences tied in to different geographies within the country that I think it important for us to start looking at these as sub-branding programmes. Malaysia is culturally and historically rich.
Consider the associations between Penang and the British East India Company. If they had not colonised Penang, given that Sir Stamford Raffles was on the staff of one of its early governors, Singapore might not have been founded to become what it is today. Consider Malacca’s Portugese-Dutch-Indian heritage. Romantic destinations, both, that conjure images of swashbuckling captains and pirates. The rich Indian culture that shaped things like the wayang kulit of our East Coast states. The virginal rainforests of Pahang and Sarawak. The era of tin prospecting that built Perak and Selangor. And the list goes on.
Branding originated as a means to help people identify livestock and property. From the hands of the producer, branding passed on to the consumer who used this to identify products and services. Today, the identification of products and services has gone beyond packaging and brand identity activities, beyond advertising slogans and messages. It has come to encompass and embrace the experiences that consumers associate with those products and services, before the purchase, during the purchase and after the purchase. And tourism, is all about the experience.
DNA & The Future of Malaysia’s Tourism
One may argue that different people value different things and so we are faced with either being all things to all people which leads us to being nothing for no one – this is the danger of promoting the lowest common denominator. Or that we may alienate groups of people whose custom we could have benefited from. But I am a proponent of promoting the best, and then selling the rest.
I believe successful tourism begins with identifying the DNA, the essence or heart of the tourism experience that one wants to promote. This is what leads to the unique identification of a destination. I remember Alaska’s own efforts in this regard. In that case it had to do with the mysticism of native American Indian totem poles and rituals, awe inspiring sights like seeing the Southern Lights over a pristine glacial landscape, the energy and solitude of its wilderness. All these suggesting an experience captured in the line “the adventure of a lifetime” that is still in use twenty years after.
Whether Malaysia or a specific state, identifying the experiential DNA of the place cannot be an easy thing to do. The answer lies of course in the most memorable experiences that a tourist bring back and the most indelible impression the visit makes on that tourist.
But how does one go about discovering these deep truths? Who do we ask? It is a truism that if you ask ten people for an opinion you will end up with ten opinions. And how does one go about asking the right questions that will yield meaningful answers? I am sure our highly skilled colleagues in consumer research have their own notions but I will toss in two things for consideration. First, talk to that most erudite and articulate group of tourists known as travellers. These are people who live and breathe the experience of the destination and the journey there. Second, look to the projective field of semiotics to delve deep for your answers for it is in images and sights and sounds and smells and not in words that the answers lie.
If done right, you cannot but succeed in uncovering those elements that will help shape a compelling notion of what Malaysia or Penang or Malacca or Pahang is all about. Sell that, supported by all those other things which I would call costs of entry into whatever field of tourism you choose to grow.
And the development of activities around the essence of each tourism experience coupled with the successful results of focused communication and promotion, which I am sure will come, will enable the sustainability of those very things which will keep our tourism offering truly unique and evergreen.