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Concurrent Session: Policy and Planning of Tourism Product Development in Asian Countries

POLICY AND PLANNING OF THE TOURISM INDUSTRY INMALAYSIA

___________________________________________________________ Amran HamzahCourse Coordinator, Tourism Planning ProgrammeDepartment of Urban and Regional Planning, Faculty of Built EnvironmentUniversiti Teknologi Malaysia, Skudai, Johor MALAYSIA

ABSTRACT

Tourism is currently the second highest contributor to Malaysias Gross Domestic Product (GDP) after manufacturing. Despite its relatively late entrant as a big time tourism player,the tourism industry in Malaysia has grown by leaps and bounds since the early 1990s. This

paper will, firstly, trace the development of the tourism industry in Malaysia viz-a-viz its performance, institutional framework and policy planning initiatives. Secondly, it will discussMalaysias efforts, successes and failures in promoting regional cooperation in tourism.Thirdly, the role of budget airlines, development of thematic/transborder heritage trails and

growth in youth tourism will be evaluated in the light of multi-destination visitation. Fourthly,a SWOT Analysis will be used to discus the potential of improving regional cooperation intourism as an economic venture as well as a tool for Asian cohesion. Finally, a list of action

plans will be recommended to provide a systematic mechanism for enhancing regional cooperation in the region.

INTRODUCTION

Malaysia is a relatively new entrant into tourism in relation to its ASEAN neighbours.

Serious efforts in developing and promoting tourism began only with theestablishment of the Tourist Development Corporation Malaysia (TDCM) in 1972 andit took another 15 years before a specific ministry, the Ministry of Arts, Culture andTourism (MOCAT) was set up in 1987. In April 2004, MOCAT was split to facilitatethe establishment of a separate ministry responsible solely for matters related totourism i.e. the Ministry of Tourism (MOT). This latest development reflects thegovernments seriousness in promoting tourism as the second major income earner for the country after manufacturing.

Prior to the Visit Malaysia Year (VMY) campaign in 1990, Malaysia was frequentlymarketed as only an element of a wider tourist circuit, including the neighbouringcountries of Thailand, Singapore and Indonesia (King, 1993:107). At that time,Malaysias share of the Far Eastern Asia-Pacific tourism market was only in theregion of 10% to 13%. Although the market share increased to 17.6% during thecampaign year of 1990, it fell again to around 13% in 1991 (MOCAT, undated). Inthose days, many tourists spent only a part of their holiday in Malaysia, which was themain reason why Malaysia did not appear in the list of top tourism earners.Malaysias late entry presented it with the problem of selecting a distinct tourism

product/image for the country, the way the Singapore Girl is synonymous withSingapore, or Thailand is the Land of Smiles or Bali is all culture. The followingextract from a PATA (1991 quoted in MOCAT, 1992: 1) editorial summarisedMalaysias obscure tourist image at that time:

Malaysias greatest strength is its tourism product diversitybut like a doubleedged sword, Malaysias product diversity has proven to be a marketing stumbling

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block. As it has a little of everything, Malaysia has failed to cut a distinct image inthe international tourism arena.

Over the years, the tourist image that Malaysia portrayed had changed from BeautifulMalaysia to Only Malaysia, followed by Fascinating Malaysia and currently

Malaysia, Truly Asia. Consequently, tourism promotion materials ranging from billboards to brochures and CNN advertisements often portray a bevy of local beauties representing the Malays, Chinese, Indians and other ethnic groups allexotically dressed in their traditional costume. In essence, Malaysia is currentlyselling its multiculturalism and cultural diversity representing all the major civilisations in Asia as its tourism image (Malays, Chinese, and Indians), projected bythe promotion tag line, Malaysia, Truly Asia.

TOURIST ARRIVALS TO MALAYSIA

In 2002, the bulk of tourist arrivals to Malaysia was from the Southeast Asia region

(73%), in which tourists from Singapore formed the largest group (57%), followed byThailand (9%). Between 2001 to 2002, tourists from Singapore and Thailand grew by8.6 % and 15.4% respectively but the biggest increase was recorded by arrivals fromthe emerging tourist markets of India and China, which grew by 27.8% and 23%respectively (Table 1). Another significant tourist market is from the Middle East,which grew by 14.8%. The big increase in tourist arrivals from China and India is dueto the aggressive promotional blitz carried out by the government while the increasein arrivals from West Asia is a direct consequence of September 11 and the invasionof Iraq, which diverted Middle Eastern tourists to the safe Muslim country of Malaysia.

Table 1: Tourist Arrivals To Malaysia, 2001 - 2002JANUARY-DECEMBER COUNTRY OF

RESIDENCE 2001 2002(%) CHANGE JAN-DEC 2002/JAN-DEC

2001Singapore 6,951,594 7,547,761 8.6Thailand 1,018,797 1,166,937 15.4Indonesia 777,449 769,128 -1.1Brunei 309,529 256,952 -17.0China 453,246 557,647 23.0Japan 397,639 354,563 -10.8

Taiwan 249,811 209,706 -16.1Hong Kong 144,611 116,409 -19.5South Korea 66,343 64,301 -3.1India 143,513 183,360 27.8West Asia 114,776 131,779 14.8Canada 38,935 34,996 -10.1U.S.A 145,827 127,920 -12.3Australia 222,340 193,794 -12.8United Kingdom 262,423 239,294 -8.8Denmark 19,770 17,297 -12.5Finland 15,284 12,908 -15.5

Norway 12,530 11,589 -7.5Sweden 35,053 29,044 -17.1

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Germany 70,401 54,645 -22.4Russia 4,276 5,067 18.5Italy 20,636 16,805 -18.6France 32,922 27,434 -16.7South Africa 20,766 13,720 -33.9Others 1,246,602 1,148,954 -7.8GRAND TOTAL 12,775,073 13,292,010 4.0

Source: Tourism Malaysia, 2003

In contrast, tourist arrivals from Australasia, Europe and the USA experienced adecrease, mainly influenced by the invasion of Iraq and the SARS outbreak. Despitethe significant drop in tourist arrivals. the traditional markets such as the UnitedKingdom (239, 294 tourists in 2002) and Australia (193, 794 tourists) are still bigger than the emerging markets of India, China and the Middle East respectively. In thenear future, the number of tourist arrivals form the United Kingdom is expected torise again given the recent establishment of direct flights from Heathrow Airport inLondon to Langkawi Island.

Tourist Receipts

Prior to the success of the Visit Malaysia Year (VMY) campaign in 1990, the revenuefrom tourism was in the range of RM 1000 m. to RM 2000 m. from 1981 to 1988(Table 2). In 1989, the tourist receipts rose by 39% to RM 2803 m. and by 61%during VMY 1990 (RM 4500 m), when tourism became big time in Malaysia. By1994, revenue from tourism again increased significantly (RM 8298 m.), boosted byVisit Malaysia Year II campaign. By this time, tourism had became the second major

contributor to the nations Gross Domestic Product (GDP). More importantly,Malaysia had caught up with Singapore, Thailand and Indonesia in terms of tourismarrivals and tourist receipts, making it a tourism destination in its own right rather than an element in the wider tourist circuit mentioned earlier (King, 1993).

Table 2: Malaysia Tourist Receipts (1989 2002)YEAR REVENUE (RM million) GROWTH (%)1989 2, 803 39.31990 4, 500 60.51991 4, 283 -4.81992 4, 595 7.31993 5, 066 10.21994 8, 298 63.81995 9, 174 10.51996 10, 354 12.91997 9, 699 -6.31998 8, 580 11.51999 12, 321 43.52000 17, 335 40.72001 24, 221 39.72002 25, 781 6.4

Source : Tourism Malaysia, 2003

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In 1996, the tourist receipts breached RM 1 b. for the first time (RM 1.4) and RM 2 bin 2001 (RM 2.4 b.). In 2002, the country earned RM 2.6 b. from tourism despite thereal and perceived threat from militants associated with the Jakarta bombing.

TOURISM ORGANISATION

The tourism planning organisation in Malaysia is complex and influenced by thethree-tier form of government i.e. Federal government, State governments and LocalAuthorities:

The National Tourism Organisation

Essentially, tourism is a Federal affair and the overall policy planning is carried out bythe Ministry of Culture, Arts and Tourism (MOCAT) (Ministry of Tourism as fromApril 2004). Meanwhile, the Malaysia Tourism Promotion Board (MTPB or TourismMalaysia) is responsible for the marketing and promotional aspects of tourism. Inaddition to the MOCAT/MOT and Tourism Malaysia, Federal government agenciesrelated to rural development are also involved directly in tourism development. Theseagencies are as follows:

Department of Agriculture (agrotourism) Department of Forestry (ecotourism) Department of Fisheries (coastal tourism) Department of Wildlife and National Parks (ecotourism) Department of Aborigines Affairs (ethnic tourism) Department of Museums and Antiquities (heritage/cultural tourism).

In the light of the above situation, it is not surprising to note that overlapping jurisdiction does occur between these Federal government agencies. For instance, jurisdiction over agro tourism/homestay programme is problematic given the activeinvolvement of both MOCAT/MOT and the Department of Agriculture. Similarly,

both MOCAT/MOT and the Ministry of Education (together with PAMPENA, asubsidiary company of MOCAT/MOT) are responsible for the Program Pelancongan

Pelajar (PPP) (Students Tourism Programme). As such, it can be surmised withoutcynicism that MOCAT/MOTs real task is not merely to provide the overallframework and direction for tourism product development but to integrate thefragmented programmes formulated by the related agencies.

As tourism is a Federal responsibility, almost all revenues from tourism such as the 10% sales tax and 5 % service tax are collected by the Federal government for redistribution to the 13 states in Malaysia. Due its limited budget, Tourism Malaysiamarkets and promotes only 13 major tourism destinations in Malaysia during their

participation in travel marts abroad. This has caused resentment amongst the Stategovernments who would like the various tourism attractions/products within their states to be equally promoted. As a consequence, several State governments, notablyMelaka and Penang, have taken the proactive step of carrying out their own

promotion to the extent of participating directly in travel marts and printing as well asdistributing their own promotional materials. Melaka, for instance, is currently usingthe promotional tag line, Visit Melaka Means Visiting Malaysia, which is frownedupon by both MOCAT/MOT and Tourism Malaysia (pers.comm. Tourism MalaysiaDirector of Planning and Research, 2004).

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State Tourism Organisation

In Malaysia, land is a State matter and the State Economic Planning Unit (SEPU) isentrusted to formulate strategies and policies related to tourism development withineach state. As tourism in Malaysia is private-sector led, both the Federal and State

governments are only required to provide the infrastructure to facilitate privateinvestments. By way of practice, however, the provision of tourism infrastructureinclude not only the hard infrastructure such as roads, airports and jetties, etc. butalso the soft infrastructure in the form of the organisation of special events.

Special events such as the Malaysia Mega Sale Carnival, Citra Warna Carnival,Malaysia Open House, etc. are huge events that attract up to 100, 000 tourists, whichare held with the intention of filling up hotel rooms, boosting consumer demand andestablishing Malaysia as a destination of never ending festivities and merriment(Tourism Malaysia promotional brochures). However, although the calendar of eventsare well planned beforehand, the integration of events into the overall planning and

product development framework is lacking. As competition between the various statesincreases, the lack of coordination in implementing promotional blitzes sometimesexperienced clashes in timing. For instance, last year saw the simultaneous launchingof the Visit Sarawak Year, Visit Johor Year and Visit Perlis Year. The aggressive butfragmented promotional blitzes carried by the various State governments fail to takeinto account the fact that the majority of tourists to Malaysia only stay at 2 differentlocations during their visit (Oppermann, 1992).

In response to the State governments request for more representation on tourismmatters, the Federal government set up the State Tourism Action Council (STAC) in2002 for each and every state in Peninsular Malaysia. Established under MOCAT, theSTACs are supposed to form a link between the Federal government and the variousState governments on tourism related matters. With a small operating budget, theSTACs are empowered to carry out product development and organising events buttheir efforts, so far, have been focussed mainly on the latter.

Local Tourism Organisation

At the local level, the local authorities are now required to not only Think Tourism but also to Act Tourism (KPKT, 2003). However, MOCAT/MOTs call for localauthorities to be more proactive in the planning, management and promotion of

tourism has not been well received by the local authorities, citing the lack of fundingand qualified personnel as the major constraints. Moreover, local authorities do notregard tourism as their core business since their establishment under the Ministry of Housing and Local Government is for the purpose of providing and maintaining

public facilities such as recreational areas, landscaping and garbage disposal. Another main reason for their reluctance to be actively involved in tourism is the lack of mechanism for direct revenue capture given that almost all income from tourism arechannelled back to the Federal government coffers.

At the local authority level, the bulk of the tourism-related projects carried out are inthe form of street improvement and beautification programmes. Modelled on the

successful Bintang Walk project in Kuala Lumpur, several local authorities haveembarked on their own programmes to create a vibrant focal point cum tourist

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attraction within their cities/town (e.g. Hang Tuah Mall in Melaka, Star Walk in Alor Star, Batu Pahat Walk in Batu Pahat, Meldrum Walk in Johor, etc.). However, these

projects have not been able to emulate the success of Bintang Walk due to the lack of critical mass.

TOURISM POLICY PLANNING

The following section will trace the development of policies related to tourism policy planning in Malaysia. Subsequently, it will discuss the implications of Malaysiastourism strategies and policies on cross-border tourism and regional cooperation.

i. Five Year Economic Plans

The planning policies covering tourism development in relation to the other economic sectors are contained in the countrys Five Year Economic Plans.Tourism only came into prominence in the Sixth Malaysia Plan (1991 1995)which recognised the countrys image/identity problem and subsequentlyrecommended that the tourism industry will place increasing emphasis ondeveloping a more distinct Malaysian image and identity (GOM, 1991:240).The distinct Malaysian image and identity recommended was identifiedas the Malaysian way of life, which was later cemented in the SeventhMalaysia Plan (1996 2000), in which rural tourism and community-basedtourism and nature-based tourism were identified as new tourism products.The Seventh Malaysia Plan (GOM, 1996: 520) also recommended that nature-

based tourism which includes eco- and agro-based tourism that projects thecountrys tropical climate and terrain will also be developed and

promotedthese will include areas encompassing hot springs, waterfall, lakes,rivers, forest reserves, agricultural parks and fishing villages as well as oil

palm and rubber estates.

The Eight Malaysia Plan (2001 2005) reflects Malaysias growing maturityand confidence as a top draw tourism destination (GOM, 2001). Significantly,the Malaysian government is no longer contented to play second fiddle toSingapore and Thailand within the tourist circuit . This is reflected by theEight Malaysia Plans strategy of expanding international access in newstrategic tourist markets as well as to promote the Kuala Lumpur InternationalAirport (KLIA) as a regional hub (GOM, 2001: 452). In addition, the Eight

Malaysia Plan proposed the development of cruise tourism, yachting andleisure boat activities to tap the expected growth of Asia as a vacation andcruise destination (GOM, 2001: 449). The Plan further recommends theenhancement of economic linkages by developing fly-cruise packages for medium and long-haul markets. Central to this strategy is the completion of the ASEAN Cruise Working Group study which is supposed to outline thestrategies to develop cruise tourism and the development of a joint-marketing

plan for ASEAN.

ii. National Tourism Policy (1992)

In 1992 the Federal government prepared the National Tourism Policy Study(NTPS) which recommended broad policies for the planning, development and

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marketing of tourism. This study is currently being reviewed given that itscontents are mostly dated. Nonetheless, the policy objectives in the NTPS arestill being used as guiding principles and they can be summarised as follows: generate foreign policies; encourage equitable economic and social development; promote rural enterprises; generate employment; accelerate urban/rural integration and cultural exchange; encourage participation in the tourism sector by all ethnic communities; create an improved image of Malaysia internationally; and forge national unity.

The significant departure from the traditional sea, sand and sun marketsegment is evident in the NTPS which recommends new areas for productdevelopment namely:

fly drive holidays; riverine tourism; ecotourism; agrotourism; cultural and heritage based tourism; MICE; and special interest tourism.

Essentially, tourism product development in Malaysia over the past 10 yearshad focused on the exploitation of its diverse nature and culture basedattractions. The nature/culture theme is taken up by most state governments,for instance, Sarawak uses Culture, Adventure and Nature (CAN) as its

promotional tag line. Melaka and Penang, on the other hand are heavily promoting their cultural heritage notably the distinct cultural potpourri that isa legacy of a cosmopolitan past. The only major addition to the policiesrecommended in the NTPS is the promotion of Malaysia as a shoppingdestination exemplified by the heavy investment in promoting Malaysia as ashopping haven, mainly through the thrice yearly Mega Sale Carnivals.

iii. National Ecotourism Plan (1996)

The National Ecotourism Plan was prepared in 1996 by a leadingenvironmental NGO, Worldwide Fund for Nature Malaysia (WWF Malaysia)for MOCAT. It contains strategies and guidelines for the development andmanagement of ecotourism in Malaysia, based on the principles of sustainability. Due to its comprehensiveness and very specific guidelines,notably Section 3, the National Ecotourism Plan can be considered more of a

blueprint rather than a strategic policy document.

The National Ecotourism Plan is divided into 5 sections, namely: Section 1 - issues, strategies and actions plans Section 2 - site listing Section 3 - development guidelines Section 4 - status of ecotourism

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Section 5 - Malaysias position in Asia Pacific Region

A brief summary of the three most important sections of the NationalEcotourism Plan is given below:

Section 1 Issues, Strategies and Action Plans

Section 1 recommends 21 action plans covering aspects such as planning,management and capacity building to make Malaysia an internationalecotourism destination. The aims of the action plans are: to protect and manage protected areas; to integrate agency support and self financing of

ecotourism projects; to involve local community participation; to encourage pilot projects as models for best practices; and

to focus on the joint marketing.Section 2 Site Listing

Section 2 identifies 48 sites within the country of potential for ecotourismdevelopment and another 4 general project recommendations, namely: establishment of Visitor Information Centre on the islands of Johor and

Terengganu; provision of institutional assistance to strengthen the growth of

ecotourism; improving the quality of interpretive and promotional materials on

ecotourism; and establishment of pilot ecotourism projects.

Section 3 Development Guidelines

The development guidelines recommended in Section 3 are produced asmanual-type booklets covering a wide range of aspects from site managementto solid waste disposal. The guidelines are produced under 4 headings, namely: General Guidelines According to Site Category Carrying Capacity Guidelines According to Ecological Systems Specific Guidelines

Officially, the National Ecotourism Plan has never been accepted/endorsed byMOCAT but the lack of official recognition has not stopped the documentfrom being the source of guiding principles for the development andmanagement of ecotourism in this country for the past 8 years.

iv. Rural Tourism Master Plan (2001)

The Rural Tourism Master Plan (RTMP) was prepared for MOCAT, by a

consultant team from Ireland, on behalf of the United Nations DevelopmentProgramme (UNDP) and the World Tourism Organisation. The RTMP Study

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proposes a challenging target of increasing visitor spending in rural areas fromthe current RM 350 m. to RM 1 b. over a five year period. This is to beachieved by removing obstacles such as poor product quality, proliferation of litter, poor service quality, and by building on the two main strengths of Malaysia, namely its beautiful countryside and friendly people (RTMP, 2001:

I). The Strategic Vision for Rural Tourism, according to the RTMP documentis to create a new brand of tourist experience for visitors, particularly longstay/high spend visitors: featuring the attractive scenery of lush tropical landscape; presenting activities and amenities to participate in, and enjoy

in safety; providing new and improved ranges of accommodation; and offering a smiling and friendly customer care approach (rtmp, 2001:ii).

Rural tourism is defined in the RTMP Study as:tourism that provides opportunities to visitors to visit rural areas andrural attractions, and to experience the culture and heritage of Malaysia, thereby providing socio-economic benefits for localcommunitiesthe proximity of many of these rural areas to thehinterland of jungle and rainforest also offers visitors an opportunityto extend their holiday and enjoy those unique natural resources(RTMP, 2001: 22).

The above definition of rural tourism shows the distinction between ruraltourism from eco/nature-based tourism in Malaysia and suggests thateco/nature-based tourism should be the progressive extension of the visitorstravel itinerary. Inherently, however, it also reflects the difficulty insegmenting the various components of the tourism product in Malaysia asthere is a big overlap between rural tourism, ecotourism and evencoastal/island tourism given that most coastal areas and islands are rural innature and outlook. Consequently, the RTMP includes islands such as PulauPerhentian as a potential rural tourism sites notwithstanding the fact that theisland is being aggressively promoted by the Terengganu State governmentfor island tourism.

The main approach recommended by RTMP to transform rural tourism inMalaysia is Starting Small to Grow Big (RTMP, 2001: III), which can beinterpreted as an incremental approach based on a number of selecteddestinations at one time. A list of Priority Districts (one in each state) are alsosuggested and the Kuala Pilah District is selected as a Pilot Model Area.Besides the recommended improvement in rural tourism infrastructure, RTMPalso proposed HRD programmes and capacity building. All in all, RuralTourism Product Development is expected to cost RM 75 m. over a 5-year

period while Human Resource Development will cost RM 5 m. However, theimplementation has been delayed due to financial constraints.

v. Second National Tourism Policy (2003 2010)

Currently, the Second National Tourism Policy (SNTP) is in the final stage of completion. As it would not be appropriate to reveal the content of a study

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which has not be officially accepted by MOCAT/MOT, it would be suffice tosay that the main output of the study to provide the mechanism for transforming the Malaysias low yield tourism to that of high yield. Inaddition, intra-region cooperation is seen as a major course of action inincreasing tourism receipts.

vi. Implications

It can be seen from the above discussion that the policy planning of tourismdevelopment in Malaysia is comprehensive and top-down in nature. Astourism is a Federal matter, MOCAT/MOT has provided the overallframework and direction for tourism product development since 1992,coinciding with the advent of big time tourism in Malaysia.

From then onwards, the major Unique Selling Proposition (USPs) identified inthe (First) National Tourism Policy were built upon, namely nature andculture. The National Ecotourism Plan (1996), for instance, provided a

blueprint for the development of nature-based tourism based on the principlesof sustainability, with a strong emphasis on local participation. The strategiesand policies contained in the Rural Tourism Master Plan (2001) call for thecommoditisation of rural resources notably the rural ambience and warm ruralhosts. Finally, the Second National Tourism Policy (2003 2010) currently

being prepared is emphasising on Malaysias unique multi-culturalism as itsmajor selling point.

Inherent in all the above documents are two specific themes. The first is thefocus on transforming Malaysias low yield to high yield tourism. Secondis the stress on regional cooperation/ cross-border tourism/multi-destinationvisitation as a catalyst for achieving the former. Given that tourism is anindustry, it is easy to understand the profit-motivated basis for supportingregional tourism cooperation. Even so, the mechanisms suggested are more inthe form of the establishment of joint committees but lacking in tangiblemeasures in stimulating regional cooperation between the industry playerswho are operating in a very competitive environment. Furthermore, it should

be pointed out that the other social benefits of cross-border tourism, such ascultural exchange and social integration are rarely mentioned in these policydocuments. The following section will dwell on these issues in greater detail.

INTER REGIONAL COOPERATION IN TOURISM

Inter regional cooperation in tourism within the region exists in the form of economicdevelopment growth triangles namely the Indonesia Malaysia Thailand (IMT GT), Singapore Johore Riau Growth Triangle (SIJORI) and the Brunei Indonesia Malaysia Philippines East Asian Growth Triangle (BIMP EAGA)(Grundy-Warr and Perry, 2001). These growth triangles are government-led initiativesthat involve the cooperation of the private sector to stimulate economic growth

between neighbouring countries. Conceptually, these growth triangles could be

interpreted as a shift towards a borderless world but in terms of actualimplementation, only the SIJORI growth triangle is making significant headway,

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mainly due to the heavy investments by Singapore based firms in tourism projectson the Indonesian islands of Bintan and Batam. Even so, the recent tourismdevelopment on Bintan/Batam are catering for a largely Singaporean market, as aplayground for the islanders.

The prospects for regional cooperation took a back seat ever since events such asSeptember 11 and the SARS epidemic. To maintain its shrinking market then, theMalaysian tourism industry had been forced to be more inward looking by focussingits attention on the promotion of domestic tourism to cushion the impact of September 11 and SARS. Lately, however, the government and industry are reverting their focuson niche European markets such as soft ecotourists from Europe, medical touristsand the emerging markets such as China, the Middle East and India.

Regionally, Malaysia is still lagging in terms of becoming a major tourism hub at thesame level with Singapore and Bangkok. Nonetheless, it has managed to capturespecific niche markets due to a long term marketing strategy and recent world events.Most importantly the partial liberalisation of the airways within Asia and the rapidgrowth of budget airlines within the region will have a significant impact on cross-country visitation. A brief discussion of these changes are as follows:

1. Growth In Tourist Arrivals From Mainland China

The growth in tourist arrivals from Mainland China (as well as Hong Kong andTaiwan) can be attributed to the aggressive promotional efforts by the Federalgovernment and certain State governments such as Melaka. Between 2001 2002, for instance, there was a 23 % increase in tourist arrivals from China, agrowth rate surpassed only by arrivals from India (28 %) (Tourism Malaysia,2003). It is also interesting to note that Melaka was the second most visiteddestination by Chinese tourists (55 %) after the capital/national hub, KualaLumpur (95 %). This phenomenon has been closely watched by the Sumatran(Indonesia) tourism industry. In an informal discussion with the North SumatraTourist Board (12 June 2003) the Indonesian counterpart voiced their intentionof forming a tour package with the tourism industry in Malaysia to encouragetourists from mainland China to extend their visit to the Indonesian island giventhat it is located only 40 minutes away by air. However, this kind of cooperationis plagued by the real or perceived image of Indonesia as an unsafe place for tourists.

2. Growth In Tourist Arrivals From The Middle East

Ever since the September 11 event, Malaysia has become an oasis for touristsfrom the Middle East as it is able to provide a safe haven for Muslim tourists asan alternative to their traditional escapade to London (and Western Europe)during their hot and humid summer months. The West Asian market is alucrative and much sought-after market as they are reportedly high spenders.Between 2001 2002, the tourist receipts from West Asia experienced thelargest increase (19 %) although the actual spending was still the lowest amongthe major tourist markets to Malaysia (RM 448 m. in 2002) (Tourism Malaysia,

2003). This is due to the fact that the arrival of tourists from the Middle East isonly limited to the months between June to September i.e. during the height of

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summer when the physical condition in that part of the world is unbearable.However, the prospect of neighbouring countries benefiting from this nichemarket is limited, with the exception of Indonesia given that the availability of Muslim food is an important prerequisite.

3. Expected Increase In Tourist Arrivals From India

The Indian tourist market has been a specific target market for some time nowwith aggressive promotion by the Federal government over the past few years.Between 2001 2002, tourist arrivals from India recorded the highest increase(28 %), the only other country besides China that recorded a growth rate of more than 20 %. Recently, the Indian government had announced theliberalisation of its airways for ASEAN carriers. Subsequently, Malaysiasnational carrier Malaysia Airlines has announced the increase in the number of flights to destinations is India such as Chennai and Mumbai. Ultimately,Malaysia is expected to be the first Asian country to be able to tap the largetourist market in India.

4. Mushrooming Of Budget Airlines

A recent but significant phenomenon that is likely to have serious implicationson the tourism industry in the Asian region is the mushrooming of budgetairlines operating within the region. Spearheaded by the Malaysian-based Air Asia, budget airlines are now operating or planning to start intra as well as inter regional routes at prices around 40% to 50% cheaper than fares of nationalcarriers. In Malaysia, Air Asia is using both the Kuala Lumpur InternationalAirport (KLIA) and the Senai Airport in Johor Bahru as its operating hubs.Recently, Air Asia had started to operate regional flights from KL and Johor Bahru to Bangkok and Phuket, as part of a joint-venture with Thaitelecommunications giant Shin Corp. This will be followed by connections toChieng Mai, Hat Yai, Vietnam, the Philippines, China and India using KLIA,Penang, Johor Bahru and Kota Kinabalu as the operating hubs (NST, 13

November 2003). Interestingly, Air Asias operation in Thailand became profitable only after 2 months of operation (The Star, 17 April 2004).

Other budget airlines such as the Indonesian-based ValuAir and Lion Air havealso started operation between Malaysia and Indonesia as well as Singapore

Indonesia. This was recently followed by Singapore Airliness statement tolaunch a budget airline in collaboration with Tiger Airways (The Star, 15December 2003). By and large, the budget airline phenomenon should not beinterpreted as the beginning of the end for national carriers within the region.Instead, it should be viewed as an opportunity to plan, organise and managecross-region and multi-destination travel within the region within the capacity of hubs and gateways created by the liberalisation in air travel. In the medium andlong term, the implementation of the existing growth triangles will be facilitatedand hasten.

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5. The Establishment Of Transborder National Parks/World Heritage Sites.

Although ecotourism is still a niche market, its growth rate in the Asia-Pacificregion is phenomenal, averaging between 10 25 % annually (Hall and Lew,1998). Lately, there has been a clear shift towards the development of

transborder tourism, notably involving nature-based tourism. While this type of transborder tourism is still in its infancy, its potential in encouraging multi-destination visitation is enormous. Currently, the Malaysian/Perlis Stategovernment is trying to improve the planning, management and promotion of Perlis State Park and the Thaleban National Park in Southern Thailand as atransborder tourist attraction.

This trend is also evident in the Federal governments nomination of 2transborder natural sites in Borneo for inscription into the World Heritage List(Bentung Karimun in Indonesia and Lanjak Entimau as well as Batang Air inSarawak, Malaysia). As argued by Hall and Piggin (2003), World HeritageListing is a form of branding that will inevitably attract more tourists to the areaupon listing, especially if the sites are already tourism attractions in their ownright. The economic potential of the World Heritage Site branding makes itattractive for budget airlines to operate routes to such destinations fromregional hubs such as Kuala Lumpur, Johor Bahru and Bangkok.

6. Development in Cruise Industry/Tourism

The growth in cruise tourism is essential to multi-destination visitation withinthe region. The cruise industry is also enjoying a healthy growth within theregion and the Malaysian scene is monopolised by Star Cruises, the 3 rd. biggestcruise ship operation in the world. Currently, the cruise along the Straits of Melaka is highly popular with stopovers in Singapore, Melaka, Pulau Langkawiand Phuket Island. As the development of cruise tourism is recommended in theEight Malaysia Plan, the creation of innovative cruises would further boost the

popularity of this form of travel. Recently, the Melaka State government istrying to develop themed heritage trails based on Melakas glory days as amajor trading port or the Emporium of the East. To commemorate 600 yearsof Admiral Zheng Hos maiden to Melaka, the State government haveorganising special events based on the historical link between Melaka and Chinasuch as In terms of potential, an Admiral Zheng Ho Cruise and similar

themed cruises could be developed, promoted and sold as a themed cruise tocomplement the luxury cruises operated by Star Cruises. In doing so, multi-destination visitation within the region could be facilitated not only by air butalso by sea.

7. Development of Themed Heritage Trails

With the focus on heritage tourism in the National Tourism Policy Study(1992), heritage trails have been developed notably in the historic cities such asMelaka, Penang and Kuala Lumpur. Recent development in the design of heritage trails is moving towards transborder trails based on common themes.

For instance, the Tun Teja (female warrior during Melaka Sultanate) stretchesfrom Melaka to Johore whilst the Mat Kilau (nationalist during British

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occupation) trail starts from the State of Trengganu and ends in the State of Pahang. Currently, historical trails are being developed involving more than 2states i.e. the Melaka Negri Sembilan Johore transborder tourismdevelopment.

On a more regional level, the Parameswara Trail (extends from Melaka andends at Palembang in Indonesia, passing through historical sites in the RiauArchipelago. Likewise, a transborder historical trail is being developed by thePerak State government to trace the route of the Bunga Mas (tribute) processionfrom Thailand to Perak. Although such trails currently appeal mainly to a nichemarket, they have the potential to be professionally packaged and sold asvibrant tourism products.

8. Extension of Educational Tourism Programme

As one of the measures to improve domestic tourism, an educational tourism programme was developed by MOCAT and the Ministry of Education in 2001to encourage local travel through the establishment of tourism clubs in schools.By doing so, students/schoolchildren are being targeted as the catalyst to

persuade their families to travel more regularly within the country. Recently,this Program Pelancongan Pelajar or Students Tourism Programme (PPP) hasmanaged to attract tour operators as partners in the implementation and

promotion of the programme. Potentially, this programme could be extended toinclude educational establishments and tourism destinations within the region.In the long run, it would be able to encourage more social contact and culturalexchanges as well as understanding between the youths in the region.

9. Trans-Asia Rail Link from Singapore to Kunming, China

Finally, the Trans-Asia Rail Link between Singapore to Kunming in China is along term project that will have significant impact on inter-regional travelwithin the Asia region. The 5, 500 km. rail link will pass through Malaysia,Thailand, Vietnam and Laos but the implementation is bogged down by politicaland financial problems (NST, 12 November 2003).Notwithstanding theseconstraints, the rail link project offers an existing prospect for the growth of multi-destination visitation within the Asian region in the long term.

DISCUSSION AND SYNTHESIS

This paper has, firstly, summarised Malaysias gradual climb into the upper hierarchyof the Asian tourist circuit. Secondly, it highlighted the state of tourism policy

planning in Malaysia viz-a-viz its 3 tier form of government. Finally it had discussedthe current and expected improvement in accessibility between Malaysia and the other countries within the region, which will have exiting prospects for inter-regionaltourism, multi-destination visitation and cross-cultural exchanges. Ultimately, the

private sector is expected to respond to new opportunities brought about by moreliberal and collaborative government policies on tourism within the region but the

actual realisation will be highly dependent on the improvement in accessibility either by land, sea or air (Fig. 1).

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Fig.1. MALAYSIAS TOURISM POLICIES IN THE CONTEXT OFREGIONAL COOPERATION

Hub & Gateway Middle Eastern Tourists

IndianTourists

Chinese

Star Cruises

Growth of BudgetAirlines

Trans AsiaRail Link

(Singapore-Kunming)

EconomicDevelopment

Growth Triangles(IMT-GT/ SIJORI)

CruiseTourism

EducationalTourism(school

programmes

ThemedHeritage Trails

Transborder National Parks

MALAYSIASTOURISMPOLICIES

EMERGING MARKETS

COOPERATIONREGIONAL

In the short and medium term, the mushrooming of the so-called no-frills, budgetairlines will facilitate the implementation of multi-destination tour packages asenvisaged by the economic development growth triangles such as IMT-GT andSIJORI. Needless to say, the implications of budget airlines on regional travel wouldrequire a careful study so as to maximise new opportunities. In addition, another level of transportation hubs and gateways will inevitably be created, potentiallycompeting but at the same time complementing the established hubs such asSingapore and Bangkok. In relation to its neighbours, Malaysia, perhaps is in the best

position to capture a significant share of the emerging markets such as China, Indiaand the Middle East. As a consequence, KLIA and Johor Bahru (Senai) airport areexpected to function as what can be termed as specialised hubs and gateways for thismarket segment. Besides air transport, cruise tourism has the potential of providing

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better and more exiting itineraries by creating themed voyages based on the regionsinter-connected history. Finally, the budget airlines will definitely boost studenttravel within the region, which will not only bring about economic benefits but alsofoster regional integration and cultural exchanges.

To surmise, the growth of budget airlines can be considered as the key towards providing the missing link towards better regional cooperation in tourism. Nonetheless, the aims of regional cooperation should not be for short-term economicgains alone given that Asian cohesion and bonding are equally noble aims albeit lesstangible in their form. A SWOT Analysis is carried out to assess the strategicstrengths and weaknesses of the Malaysian tourism industry as well as theopportunities and threats against improving regional cooperation with its Asianneighbours. A summary of the SWOT Analysis is given below (Fig. 2):

Fig. 2. SWOT ANALYSIS

STRENGTHS Outstanding nature Cultural diversity and multi-

culturalism Good accessibility Good tourism facilities Safety English widely spoken

WEAKNESSES Service quality Low profit margin Environmental degradation

OPPORTUNUTIES Close proximity to Asian

neighbours Better access through budget

carriers World Heritage Site branding Youth travel

THREATS Regional safety Ignorance and prejudices Environmental degradation

From the SWOT Analysis, it can be seen that STRENGTHS of the tourism industryin Malaysia are the outstanding natural beauty comprising tropical forests, lakes,

pristine islands, mountains, etc. In addition, the cultural diversity and multi-culturalism are only unique to Malaysia, so much so that tourists from other parts of Asia can at once be at ease with the familiarity of Malaysia and yet marvel at itsdifferences. Good accessibility provided by a first class expressway system, modernairport facilities, quality accommodation, safety and the fact that English is widelyspoken are the other major strengths of Malaysia as a tourism destination. Overall,Malaysia is ideal as a short break or a long stay holiday destination with a highaccessibility/connectivity factor to the other major tourism destinations in the region(within 3 hr. flying time).

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The main WEAKNESS of Malaysias tourism industry is its low yield economicreturn, forced upon by the underselling of hotel rates, hence affecting the profitmargin of most 4 to 5 star hotels. (room rate of below USD 100/night). Consequently,the low profit margin has affected HRD and training and hotel refurbishment

programmes, which in turn, has affected service quality. At sensitive areas such as

islands and hill resorts, environmental degradation has also worsened over the last fewyears due to the lack of management and enforcement. Until the economic outlook for hoteliers improve, the tourism industry is expected to play safe and keep what theyhave rather then embark on cross-border selling of tour packages.

As mentioned earlier, the OPPORTUNITIES for multi destination/cross border tourism have been vastly improved by the advent of budget airlines which are able to

profitable serve destinations with a 3 hr. flying time radius. In addition, the brandingassociated with World Heritage Sites and the growing interest in themed tours also

provide new opportunities for intra regional travel. In the long term, youth travelwithin the country and possibly within the region will not only boost Asian cohesion

but also develop a travelling culture amongst the nation and region s youth. In turn,the social benefit of youth travel has the potential to be transformed into an economic

benefits in the future.

However, THREATS remain in the form of wars, political diseases, outbreaks of communicable diseases, etc. Other threats such as ignorance and prejudices are

present in any society which tourism has the potential to eradicate. Finally,environmental degradation is likely to be a major threat together with thedisplacement and marginalisation of the local population. Ironically, the areas that arelikely to face serious threats are the World Heritage Sites and other fragile areas.

RECOMMENDATIONS

Currently, regional cooperation within the region are in existence through theactivities of both PATA and the ASEAN Tourism Forum (ATF).However, based onthe above discussion and synthesis, a better collaboration can be achieved by buildingon the strengths of each Asian country. Towards this end, several recommendationsare proposed, which are as follows:

Short Term (1 3 years)

In the short term, the main focus should be on the removal of obstacles than hinder cross border travel. Based on the concept of seamless travel, some of the initiativesthat could be introduced are smart cards for frequent travellers to minimise delays atimmigration points, better arrangement for self-drive holidays and cross border insurance policies, etc. Based on MOCAT/MOTs Think Tourism approach, therelated government department such as Customs and Immigration should beeducated on how to facilitate cross-border travel.

In addition, a detailed study on the growth and regional implications of budget airlinesshould be carried out to establish the data base for more accurate projections of touristdemand and supply. Tourism Malaysia with the assistance of PATA, ATF and the

Association of Asia Pacific Airlines should take the lead in this particular researchgiven that the current hub for budget airline travel is located in Malaysia.

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Medium Term (3 5 years)

In the medium term, the packaging of transborder tour packages should be designedwith PATA or ATF as the Secretariat. Tour agents representing the region shoulddesign innovative tours based on specific themes, preferably those that involve the

geographical boundary and heritage of more than one country. The nomination of transborder World Heritage Sites should be further encouraged as it will not only

provide a boost for tourism through its branding but also because World HeritageSites are governed by development guidelines and visitor management programmesincorporated into their management plans. In this way, the potential negative impactof uncontrolled tourism development will be minimised and the principles of sustainable tourism could be adopted in site management.

Currently, the potential transborder national parks/World Heritage Sites that can bedeveloped as pilot sites are:

Status Location

World Heritage Site (cultural and natural) Tanjung Tuan, Melaka andTanjung Berhala, Sumatra

World Heritage Site (natural) Batang Air, Sarawak and Lanjak Entimau, Kalimantan, Indonesia

World Heritage Site (natural and cultural) Bujang Valley, Kedah, PerlisState Park and Thaleban NationalPark, Thailand

On the Malaysian side, the establishment of transborder World Heritage Sites willinvolve collaboration between the Ministry of Education, Department of Museumsand Antiquities, Department of Forestry and the Department of Wildlife and NationalParks.

In the medium term, the PPP (Students Tourism Programme) programme should beextended to cover the ASEAN region. Budget airlines will provide the catalyst for regional student travel and PAMPENA (a subsidiary) of MOCAT/MOT shouldcontinue its efforts as the facilitator for such programme. Among the facility that

should be developed by PAMPENA is a type of Central Reservation System (CRS)for youth travel within the region.

Long Term (5 10 years)

In the long term, tourism regional tourism should be further developed as part of theexpansion of trade through AFTA. Further incentives for foreign direct investmentsshould be introduced and Asian-based hotel/resort chains should be encouraged. Inaddition, Asia should further forge the Asian branding by providing incentives andtechnical assistance to SMEs in the tourism sector, notably local artisans and cottageindustries producing high quality handicrafts. To this end, Thailand should be used as

the model for active local participation in the tourism industry given its success inthis particular field.

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In the long term, joint promotion should be further enhanced by developingelectronic portals, promotional blitzes and an efficient but affordable CRS coveringthe whole of Asia. Finally, AFTA should take the initiative in extending itscommitment to sustainable tourism beyond the formulation of codes of conduct. Thiscould be done by developing and implementing accreditation programmes for

sustainable tourism that are tailored to the needs of both the formal sector (resorts,hotels) as well as the informal sector (chalets, stalls, cottage industries).

CONCLUSION

Tourism is a fickle industry that promises a lot and yet delivers little and over a long period. Regional cooperation in tourism too is an area of vast potential but requires proper planning and coordination. In the light of globalisation and tradeliberalisation, cross border tourism could be used as a powerful tool for the economicenhancement of Asian nations. Nonetheless, the expectation of positive economicreturn from regional tourism should not cloud its intangible yet no less important

benefit i.e. Asian cohesion and cultural exchange.

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LIST OF REFERENCES

GOM (Government of Malaysia) (1991) Sixth Malaysia Plan , Government of Malaysia Printers: Kuala Lumpur.

GOM (Government of Malaysia) (1996) Seventh Malaysia Plan , Government of Malaysia Printers: Kuala Lumpur.

GOM (Government of Malaysia) (2001) Eighth Malaysia Plan , Government of Malaysia Printers: Kuala Lumpur.

Grundy-Warr, C. and Perry, M. (2001) Tourism In An Inter-State Borderland: TheCase Of The Indonesian-Singapore Cooperation, in Teo, P., Chang, T.C. and Ho, K.C.(eds.) Interconnected Worlds: Tourism in Southeast Asia , Pergamon:Oxford.

Hall, C.M. and Lew, A .(1998)(eds.) Sustainable Tourism: A Geographical Perspective, Harlow: Addison-Wesley Longman.

Hall, C.M. and Piggin, R. (2003) World Heritage Sites: Managing The Brand, inFyall, A., Garrod, B. and Leask, A. (2003) Managing Visitor Attractions: New

Directions, Elservier: Oxford., pp. 204 219.

King. V.T. (1993) Tourism and Culture in Malaysia, in Hitchcock, M., King. V.T.and Parnwell, M.J.G. (eds.) Tourism in Southeast Asia , London: Routledge, 96 116.Lew, A. (1998)

MOCAT (Ministry of Arts, Culture and Tourism) (1992) National Tourism PolicyStudy, Ministry of Arts, Culture and Tourism: Kuala Lumpur.

MOCAT (Ministry of Arts, Culture and Tourism) (2001) Rural Tourism Master Plan , Ministry of Culture, Arts and Tourism: Kuala Lumpur.

Oppermann. M . (1992) International Tourist Flows in Malaysia, Annals of Tourism Research, 19 (3), 482 500.

The New Straits Times , 12 November 2003

The New Straits Times , 13 November 2003

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Tourism Malaysia (2003) Profile of Tourists by Selected Markets , 2002, TourismMalaysia: Kuala Lumpur.

WWF Malaysia (Worldwide Fund for Nature Malaysia) (1996) National Ecotourism Plan .

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