Malaysia aspires to be the world’s top Muslim-friendly destination. In this regard, it plans to expand its partnerships internationally to establish itself as a lifestyle destination and a health hub within the context of Islamic tourism. These objectives are already in motion: Malaysia hosted the World Islamic Tourism Conference from 17-19 October 2022. The Islamic Tourism Centre (ITC) is the agency entrusted by the Ministry of Tourism, Arts and Culture to drive Malaysia’s 2020-30 Islamic tourism agenda. At the same time, Tourism Malaysia’s Strategic Plan 2022-26 aims to reinvigorate the post-pandemic tourism landscape through a coherent and holistic approach to ensure the demand and supply of sustainable tourism. This country note discusses Malaysia’s potential in Islamic tourism, and the need of enhancing tourist experience through smart tourism and water villages and cultural products.
Economic Outlook for Southeast Asia, China and India 2023
Malaysia
Source: OECD Development Centre based on data from UNWTO (2022), “Global and regional tourism performance” (database), UN World Tourism Organization, https://www.unwto.org/tourism-data/global-and-regional-tourism-performance (accessed on 26 November 2022) and WTTC (2022), “Laos 2022 Annual Research: key highlights”, https://wttc.org/DesktopModules/MVC/FactSheets/pdf/704/145_20220613162912_Laos2022_.pdf.
Introduction
Current situation and policy challenges
Islamic tourism
Islamic tourism destinations in Southeast Asia are largely dominated by Malaysia and Indonesia, along with the other countries such as Thailand and Singapore, according to the Global Muslim Travel Index (GMTI) (CrescentRating, 2022). With an Islamic tourism thrust and a large domestic Muslim population and Islamic traditions, Malaysia has the potential to continue to stand out.
One challenge consists of the type of services on offer at various attractions. At hotels, for example, Halal or Islamic tourism could be more palatable if the hotel swimming pool offered an allocated space or a separate pool for Muslim swimmers. However, this raises resource challenges. The same is true of the variety of food on offer at a hotel breakfast buffet or on the menu. Preparing two parallel lines of food can be both challenging and costly. Businesses in the tourism sector must carefully weigh the provision of such facilities. Moreover, the country could identify businesses and facilities in the tourism sector that can make a real difference to Islamic travellers so that they are fully privileged to enjoy their holidays without any inconvenience. In the GMTI survey, most respondents placed Muslim-friendly facilities above all other factors, such as price, accommodation and transportation (CrescentRating, 2022).
Enhancing the tourist experience
Malaysia offers tourists a broad variety of experiences, from cultural heritage and rural tourism to nature-based and adventure tourism. Moreover, the National Tourism Policy plans to expand niche tourism and holiday packages, incentivise personalised small-group tours and extend inducements to suppliers to consider offering more niche tours. In this section, we highlight three key areas where tourist experiences can be enhanced, namely Smart Tourism 4.0, and attractions in the Borneo states of Sabah and Sarawak.
Smart Tourism 4.0
Smart Tourism 4.0, a campaign initiated in 2018, is meant to extend digital technology in the tourism space. The campaign was suspended in 2020 due to the COVID-19 pandemic. However, the goal is worthy as smart technology is believed to have the potential to increase Malaysia’s tourism-based revenues to USD 110 billion by 2030 (MIDA, 2022). One of the challenges to achieving this goal is efficient network provision. A 2020 study found that internet connectivity was weak at most attractions and that tourists felt that too few tourism businesses were providing or facilitating smart tourism technologies (Amir et al., 2020). Further investment and government incentives could induce tourism businesses to adopt more technology-based services. Given the growing number of millennial and Generation Z travellers, it would be prudent for tourism policy makers to identify key points at Malaysia’s attractions, restaurants, public squares and transportation hubs to provide easy access to the internet and digital services – a point that is recognised by the government (Britshi, 2019).
Water villages and cultural products
While community-based tourism is quite popular in the states of Sabah and Sarawak, the tourism potential of the area’s water villages – in which dwellings are built on stilts over the water – has yet to be fully realised (Borneo Post, 2022). Local communities and tourism authorities need to come together to see how water villages can benefit from tourism, for example via homestays, local cuisine and the sharing of cultural insights. Perhaps lessons can be learned from neighbouring Brunei Darussalam, where water villages have been transformed into a key tourist attraction.
Malaysia is rich with villages and village life, where weddings and celebrations are shaped by tradition, and this could be part of special-interest tourism. In Sabah and Sarawak, culture, adventure and nature remain mainstays of the tourism sector. A study of tourism by-products has recommended that key stakeholders, such as the Tourism Board and heritage and craft centres, use traditional handicrafts to enhance the two states’ tourism image (Zahari et al., 2017). In other words, crafts should not merely be souvenirs but rather products developed as representing the nature of local artisanal works. The idea is to advertise and promote this cultural heritage in key tourism messaging. There have been similar calls for promoting cultural pride elsewhere in Malaysia. Engaging local communities to practice their handicraft traditions for tourism could improve livelihoods and standards of living (Amri, 2021).
References
Amri, A. (2021), “Exploring tourism products for Kampung Sungai Dua Besar, Kual Pilah, Negeri Sembilan, Malaysia”, Webology, (18), https://www.webology.org/data-cms/articles/20211101050610pmWEB18210.pdf, pp. 13-22.
Borneo Post (2022), “Transforming Sabah water villages into tourist attractions”, 8 September 2022, Borneo Post Online, https://www.theborneopost.com/2022/09/08/transforming-sabah-water-villages-into-tourist-attractions/.
Britshi, Z. (2019), “Malaysia tourism facing decline due to emerging touristic countries”, Malaysa World News, 2 March 2019, https://www.malaysiaworldnews.com/malaysia-tourism-facing-decline-due-to-emerging-touristic-countries/.
CrescentRating (2022), Global Muslim Travel Index 2022, Mastercard-CrescentRating, https://www.crescentrating.com/reports/global-muslim-travel-index-2022.html.
IMF (2022), “World Economic Outlook Database” (accessed October 2022).
MIDA (2022), “Smart Tourism: Future of tourism in Malaysia”, Malaysia Investment Development Authority, https://www.mida.gov.my/smart-tourism-future-of-tourism-in-malaysia/.
UNWTO (2022), “Global and regional tourism performance” (database), UN World Tourism Organization, https://www.unwto.org/tourism-data/global-and-regional-tourism-performance (accessed on 26 November 2022)
WTTC (2022), “Malaysia 2022 Annual Research: key highlights”, https://wttc.org/DesktopModules/MVC/FactSheets/pdf/704/155_20220613163311_Malaysia2022_.pdf.
Zahari, M.S.M. et al. (2017), “The moderating effect of tourism byproducts on the relationship between tourism core products and destination image (Sarawak, Malaysia)”, Geographica Pannonnica, Vol. 21/4, http://scindeks.ceon.rs/Article.aspx?artid=0354-87241704261Z, pp. 261-273.