Malaysia looks to Indian and Indonesian tourists to replace the Chinese

Tourism Malaysia Published 2 months ago on 2 December 2022 | Author TIN Media

The hospitality industry is looking to travellers from nations like India and Indonesia to fill the gap as one of the nation's biggest sources of tourism earnings before the Covid-19 epidemic returns to the market.

Before the pandemic, 10% of China's 1.41 billion people travelled abroad, making it a significant tourist destination for the entire world. China spent US$255 billion in foreign tourism in 2019, according to the World Tourism Organization's (UNWTO) International Tourism Highlights, 2020 Edition.

According to the same research, Malaysia was rated 16th out of 20 nations with the highest travel balance surplus in 2019, which is calculated as the difference between international receipts (inbound) and international tourist expenditures (outbound).

3.11 million Chinese visitors came to Malaysia in that year, spending RM15.33 billion, or 17.8% of the RM86.1 billion in tourism-related revenue received by the nation.

"The comeback of the China market is anticipated by the entire world. We require Chinese tourism revenue. The Edge is informed by Christina Toh, president of the Malaysian Association of Hotels (MAH), that "we are also waiting for them."

She claims that there are still no indications that China will relax its zero-Covid-19 policy or reopen its borders.

On Tuesday, China's Ministry of Culture and Tourism announced that it would keep the Covid-19 regulations in place, prohibiting inbound and outbound group tours, airfare and hotel packages, and travel agents from running them.

According to the Malaysian Inbound Tourism Association, China may not reopen its borders to foreign travelers until 2024. (Mita). "We must maintain reality. We don't think we can rely on Chinese tourists returning next year, according to discussions among our members and our Chinese counterparts (there hasn't been any official word on when China would open its borders)," the organization's president Uzaidi Udanis told The Edge. 3,560 businesses engaged in the tourism industry are members of Mita.

Notably, China reported 17,595 new Covid-19 infections on November 15, the highest number since April.

In addition, Uzaidi anticipates that Chinese visitors will largely travel in regulated groups or with family and friends when they do return, as compared to before the pandemic, when they traveled in busloads. Around 60% to 70% of Chinese visitors to Malaysia at the time often arrived on tour packages.

The Greater China, Hong Kong, and Taiwan markets are the focus of the Malaysia Inbound Chinese Association (Mica), which is more upbeat. By March of next year, according to its president Datuk Dr. Angie Ng, China would likely remove its travel restrictions.

She refers to Chinese nationals who have Malaysia My Second Home passes or are business travelers by saying, "Our clientele are already returning."

There were 59,928 Chinese visitors overall between January and July of this year, some of them are reportedly expatriates, according to data from Malaysia's Ministry of Tourism and Culture.

As a result, a lot of players in the hospitality industry have redirected their attention to domestic travelers and markets like India and Indonesia.

According to MAH's Toh, Malaysia is lucky to have a sizable domestic tourism market, which has somewhat lessened the impact of the decline in Chinese travelers. 

Domestic tourism has made it possible for less-traveled areas to be found, and as a result, they have attracted larger numbers, she continues.

Hotels that depended largely on the China market, however, have been impacted. 
As a result, they are currently focusing on the markets in Indonesia and India.

According to Uzaidi, "The Indians have comparable travel behavior and patterns to the Chinese." She adds that business operators only need to modify their products to fit the market.

Despite not spending as much on expensive or upscale goods, he claims that Indians do spend more on travel and mementos. He uses the contrast between Indian tourists' fondness for chocolates and Chinese visitors' purchase of bird's nests as an illustration. Each Chinese tourist in 2019 spent RM4,921, of which 34.6% went on purchases. Comparatively, each Indian traveler spent RM4,922.60, of which 22.9% was spent on shopping.

Uzaidi further points out that several merchants who had been significantly reliant on Chinese customers had to close. He claims that Chinese visitors preferred to purchase local goods and even mattresses made in Malaysia in addition to expensive goods.

The void left by Chinese tourists can, in his opinion, be filled by Indian arrivals in Thailand and Bali, Indonesia, but Malaysia has not been properly exploiting this market, he notes.

Thailand received 661,751 Indian tourists between January 1 and October 26, or 66,175 on average each month. Bali, which welcomed visitors in March, saw 17,542 Indian arrivals in August and 22,964 in September. Malaysia welcomed 109,377 Indian tourists, or an average of 15,625 each month, according to data that only goes as far back as July.

"We lag Bali and Thailand significantly" (in attracting Indian tourists). For instance, there aren't any direct flights at the moment to Bali. Before traveling to Bali, the majority of Indian tourists must pass through Kuala Lumpur International Airport, also known as klia2. Although flights are accessible from India, Uzaidi claims that we do not gain from them. Because of this, we are losing out on tourist spending.

Additionally, the eVisa portal, an online tool for applying for a visa to Malaysia, had been having problems since September 26 and was offline for maintenance. Indian tourists' arrivals in Malaysia were impacted since it was functioning erratically, according to Uzaidi. He wishes the issue wouldn't come up again.

We do offer the Visa on Arrival option, but there are requirements. To be eligible, the traveler must be an Indian or Chinese national and be arriving in Malaysia directly from Indonesia, Singapore, or Thailand, he continues.

It is strange, according to Uzaidi, that Malaysia urges visitors to spend their money elsewhere before coming here.

Stringent visa restrictions, according to interim tourism, arts, and culture minister Datuk Seri Nancy Shukri, are deterring visitors. Because the tourists decided to travel elsewhere, the ministry's RM26.8 billion target for tourism spending may not be attained.

Mica is considering sending in visitors from Taiwan, Hong Kong, and Vietnam if China relaxes its travel restrictions.

Ng explains that Mica is promoting "Foliday," a campaign aimed at family and friends, and that "We are traveling to Hong Kong in January to promote Malaysia." The association has been in the market for 30 years and has 325 member companies.

Ng said of Greater China: "We need to be ready when the market recovers. Chinese visitors enjoy going to islands and engaging in eco- and agritourism.