Malaysia has witnessed a slowdown in tourism over the past year because largely because of circumstances beyond the Malaysian government’s control. There was the crash of flight MH 370 on March 8, 2014 – which simply went missing from the radar screen, with no signs found whatsoever of the 239 missing passengers.
This was compounded by the highly unfortunate downing of Flight MH17 in Ukraine by Russian separatists, just a few months later. Over 280 passengers were killed immediately. So, for no fault of its own, suddenly Malaysia found itself at the receiving end of great misfortune. It is clear that tourism and travel in the country has taken a great blow. It has been a severe setback not just for the Malaysian airline industry, but for all other businesses related to tourism in Malaysia.
This has been further compounded by the slow GDP growth during this period, which has led people in Malaysia preferring low cost tourism options. There has been a significant growth of low cost carriers such as AirAsia in Malaysia as a result.
So, the uncertainty in the Malaysian economy compounded by the unfortunate events we talked about has been a double blow to Malaysia’s tourism industry. But the economy has picked up by quite a bit in the latter half of 2014, which has certainly helped matters for the country’s tourism industry.
Tourism in Malaysia is very much fragmented as we have a large number of businesses competing with each other here, both multinational and domestic. Some of the businesses such as car rental, travel accommodation and travel retail have witnessed tremendous competition.
There are several great opportunities for international players to expand business here, and look for profitable business partnerships with business partners in Malaysia specializing in tourism. Young Malaysian entrepreneurs look for business partnerships with established international names because of the preference given by the public for foreign brand names.
One more factor that goes in the favor of Malaysia as a hotspot for tourism is the high broadband penetration in the country. Malaysia has a broadband penetration of close to 70%, which is the third highest in the world, and certainly much higher than other ASEAN countries. This high acceptance of internet in Malaysia has led to the growth of a number of internet players, many of who are heavily involved in tourism.
Even international online tourism companies such as Expedia have shown a great interest in Malaysia forming profitable business partnerships with local entrepreneurs. Certainly, while the country has been pegged back quite a bit by circumstances beyond its control, things are looking better this 2015 than at any moment in the recent past. We expect tourism in Malaysia to get back on track this 2015.
Tourism in Asia is not just about exploring the beaches in Sri Lanka, the Great Wall of China or the shopping malls of Singapore. It is equally about medical tourism (hospitals), health tourism (holistic health care centers) and business tourism (corporate retreats). To put it simply, tourism is BIG business in Asia. If your company in involved in tourism, this represents an excellent opportunity to form highly profitable business partnerships with local entrepreneurs involved in the Asian tourism industry.
In this series of articles based on the theme “Tourism Asia”, we analyze the strengths and weaknesses of the Tourism Industry in various Asian countries. Our goal is to feed you the most up-to-date information so that you’ll know exactly what lies ahead as you look to identify business partners and expand your business in these countries.
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