Malaysia Tourist Arrivals Surpass Pre-Pandemic Level
By the EMIS Insights Editorial Team
Among the ASEAN-6 nations, only Malaysia surpassed its pre-pandemic level of tourist arrivals in December 2023, according to our data platform CEIC's Global Economic Monitor database. Almost 2.3mn foreign tourists visited the country last December, up from 1.7mn in November (December tends to see a seasonal spike in tourism.) and from 1.99mn in December 2019.
Indonesia, Thailand, Singapore, and Vietnam have mostly made steady progress since international travel resumed in 2022. The relative laggard is the Philippines, whose visitor count in February 2024 was 28% below December 2019 levels.
Tourism Malaysia data shows that the number of tourist arrivals in 2023 reached 20.14mn, up from 10mn in 2022 and falling short of the 26.1mn arrivals in the pre-pandemic 2019. Total tourism receipts in 2023 stood at MYR 71.3bn, a more than twofold increase y/y.
Mint Leong, president of the Malaysian Inbound Tourism Association, said in an interview with Al Jazeera in March 2024 that Chinese tourist arrivals rose by about 33% y/y in January to some 60,000, followed by a 50% increase in February to some 120,000. Leong added that Chinese arrivals are expected to stand at around 3.5mn-4.5mn this year, with average tourist spending during the trip reaching up to MYR 5,000-6,000.
Although the tourism industry is recovering nicely, Malaysia has strong regional competition. Neighbouring Singapore managed to strike an exclusive deal to be the only Southeast Asian venue for Taylor Swift’s Eras tour concerts. According to analyst estimates, the six sold-out concerts in the beginning of March generated between SGD 260mn and SGD 375mn in tourism receipts for the city state.
Thailand, on the other hand, waived taxes for organisers of large international concerts, sporting events and festivals, granting organisers of large international events costing more than THB 100mn import duty exemption on equipment.
One of Malaysia’s competitive advantages is the weak ringgit, which is particularly attractive for visitors from Singapore. The weak currency makes prices in Malaysia highly competitive compared to other destinations in the region, although the service tax rate in the country has been raised from 6% to 8%. It remains to be seen whether the tourism ministry will manage to fully take advantage of the local currency’s weakness to support the tourism sector.
The government has set an ambitious target of 27.3mn tourists and MYR 102.7bn in tourist expenditure for 2024, Malaysia’s deputy tourism, arts and culture minister Khairul Firdaus Akbar Khan said as cited by TTG Asia in April 2024.
When we look into the daily e-commerce data for Malaysia, an alternative high-frequency dataset available on CEIC, and chart travel and tourism e-commerce transactions against government figures on tourism revenue, we can see that spending has steadily declined in recent months. Based on pre-pandemic patterns, that suggests tourism revenue will return to its usual seasonal lull when early 2024 figures are released.
Despite these seasonal fluctuations, Malaysia’s tourism industry has the potential for a remarkable rebound, but it remains to be seen whether it will manage to capitalize on its strengths.