The Importance of Tourism for the Malaysian Economy in a Recession

Given the relatively small size of our economy, Malaysia is a country heavily reliant on exports as a source of income. Manufacturing, our biggest foreign exchange un muddleer, currently accounts for the bulk (70%) of total exports led by electronic parts and components, followed by commodities such as oil and gas as well as palm oil. As long as this over-dependency remains, Malaysia will always be exposed to the risks of the cyclical record of global ICT product de creationd and the speculative prices of raw materials.Based on the growth experience of change economies, manufacturing has also already reached its optimum sh atomic number 18 of 30% contribution to the Malaysian GDP. In other words, tralatitious means of exports will continue to decline and diversification of our export earnings is imperative for us to flush for the resulting gaps. Dato Seri Najib Razaks recent announcement of further liberalization to the services vault of heaven couldnt have been more well-time d.Through this, we can expect to speed up our reduction of on imported services speckle boosting our exports (in various other categories) to register a healthier overall bank balance. Weve only just started see trade surplus for services since 2007. This would not have been possible without tourism, which contributes to almost 50% of the services sector and Malaysias 2nd largest foreign exchange earner. Besides having an incredible multiplier effect in ground of income and employment distribution due to far-off-reaching linkages to other sectors (construction, finance, insurance, manufacturing etc. tourism, unlike other goods or services, has no slender substitutes meaning demand for travel bys is more likely to grow rather than be traded with something else. Neither is it subjected to price fluctuations abnormal by speculative factors like commodities for example. If the index of average world(prenominal) tourist expenditure equals the price of the international product, prices received enjoy greater stability versus raw materials. In fact, prices have tended to increase in a stable manner due to among other things, demand for holidays and the rigidity of destination supply in the mindless and strong suit term.Tourism also has the capacity to recover foreign-currency investment in a shorter time a strong motivation for FDI inflows to the country. The UNWTO estimates that a medium-class beach hotel in a developing country will earn back in 1 year the entire foreign exchange required to build and accommodate it. In this bleak climate however, decline in international reachs is naturally expected. Unless enough measures are prepare in place to safeguard the industry the impact would overwhelming on not just travel per se, but on a massive chunk of businesses that rely on tourism as a demand stimulus.There are several get wind things we need to do. Firstly, we need to be extremely targeted in terms of our source markets. This recession is quic kly speeding up the shift of economic power to emerging economies the result of the contrast between the excess of savings in Asia and the debt burden of Europe and North America. man it is a global downturn, china, India, and MENA region are keep mum expected to post positive growth which is a far cry from the -3% growth forecasted for developed countries.Besides ASEAN, contribution of international arrivals from these countries will make up a substantial share of our prospects. What this also means, is that our ASEAN counterparts would be vying for the same piece of the pie. Even more problematic is the fact ASEAN destinations share their own equivalent of what Malaysia offers as a travel destination common key interests like cultural experiences, beaches and spas, historical monuments, shopping, local cuisine, sports etc.As witnessed from most communication efforts both regionally and globally, countries have more often than not packaged these attractions together in a be autifully crafted collage of pictures either on television or print advertising that spells out what a destination has to offer. During a time when such demonstrations become expected proof of value, how do we then break through the clutter and moderate the travelers attention? To do this, we need to create ideas that mean something to them, ideas they would want to elapse their time with. Value need not necessarily mean tangible or functional attractions to a traveler alone.Rather than starting with the multitude of things a destination has to offer, we need to look at our arrival prospects as lot kickoff and identify a fundamental need, that could be emotional or rational, in the lead tailoring our destination to resolve them. An example of how this approach has worked lies within Tourism Malaysias own communications targeting the South and West Asian markets by JWT-Sen Media Malaysia in 2008. In India, 2 large and rapidly ripening segments of travelers were identified hon eymooners and young, affluent working couples with kids.Surveys revealed an interesting discovery amongst newlyweds, the fact that a majority of marriages in India were still largely arranged, by choice. A honeymoon for them is akin to a couple on a first date, where an awkward tension exists between both parties. By tapping on this, we demonstrated the emotional value of a Malaysian holiday by telling a story of how a relatively unknown man called a husband becomes a close friend of a woman with each passing day, having bygone through unalike experiences in Malaysia together.As for young families the main motivation behind a holiday is to indulge in quality time with their family, as 55% feel they dont spend enough time with their children back home. To capture this segment, a story of a busy, successful boss who rediscovers the pop music in him was spun around a holiday experience in Malaysia. Similarly for West Asia, we tapped on a finding that the target looked forward to th e refreshing feeling of water when they go on a holiday, as its a transient form of escapism from their natural surroundings.We sought to bring this feeling to life story by weaving a tale about a little girl who comes to Malaysia with her parents, equipped with a tiny parasol, looking for cool hills and the excitement of rainand finds it. Through selling value based on fundamental people motivations instead of purely selling the destination, Malaysia affix a growth of arrivals from India by 28% within the months of October to December 2008 (when the campaigns ran) versus the same period during a recession-free 2007. In the largest West Asian markets Saudi Arabia and Iran posted an astonishing 47% and 64% growth in arrivals respectively.The question we need to ask ourselves now is what are travelers looking for in these times, and how do they want to feel? Once this has been identified its a issue of ensuring the most efficient way to reach them. While this sounds seemingly sim ple, the proliferation of melodys to reach ever-changing consumers is continue to evolve rapidly. Its no longer enough to assume threshold weight on traditional mediums like print or TV advertising alone to talk to different segments of travelers with incredibly different needs.The availability of broadband connections has expanded speedily in our target markets the number of Internet users in China has grown by over 40% YOY to 298 million in 2008, whereas in India, a growth of 33% was seen among urban users. Increasingly, travelers in the Asia Pacific region prefer to plan their travels online 75% of them in fact, as attest by the latest PATA/Visa Travel Intentions Survey strongly catalyzed by the growth in inexpensive airlines over the years, where most transactions happen online.Planning usually kicks off broad based, before honing into destinations that arrest their attention for more focused planning. The Internet allows travelers to find what interests them more easily an d connect with like-minded people in ways they never could before. Top sources for tuition are travel, hotel, airline websites, as well as word-of-mouth and recommendations. Where the latter stemmed mostly from family and friends in the past it has found its way to be readily available in the form of travel blogs, networking sites and various other forums.The Internet as an alternative media channel is unrivalled in its targeting and accountability, providing the capability to track what people search for and where they surf and allow communications and information to be tailored specifically to travelers presumed special interests. The on-going advancements of the infrastructure also give much fluidity to the medium allowing the creation of the destination experience digitally to make travelers feel a certain way which is far more powerful than asking people to think about the value. In the TV era, getting audition happened at the end of the marketing process now it can be the start.