Moderate Rise In Tourism Arrivals In 2011
In 2011, Malaysia welcomed over 24.71mn tourists, an increase of 0.6% year on year (y-o-y). Tourism receipts for the year totalled MYR58.3bn, up by 3.2% y-o-y. Over the past 12 months, the Malaysian tourism industry was not immune to a drop in tourism demand from Japan, following the earthquake and tsunami in March 2011, and Europe, where the sovereign debt crisis remains a concern. Later in 2011, Thailand, another key source market for inbound tourism, was devastated by the worst flooding there in 50 years. As a result, arrivals from Japan were down by 7% y-o-y in 2011, to 386,974, while arrivals from Thailand were down by 1.1%, at 1,442,048.
However, despite the various challenges, Malaysia managed to post slightly positive growth in tourist arrivals for the year, which bodes well for a stronger performance in 2012. Looking at the source markets, there was particularly strong growth in arrivals from the sizeable potential markets of China (up by 10.6% in 2011), Russia (up 21.3%) and South Africa (up 19.1%). Malaysia is also increasingly popular with Iranian tourists, which increased by 20.1% y-o-y. Figures from Tourism Malaysia show the top-10 tourist-generating markets during 2011 were: Singapore (13.37mn), Indonesia (2.13mn), Thailand (1.44mn), Brunei (1.23mn), China (including Hong Kong and Macau, 1.25mn), India (693,056), Australia (558,411), the UK (403,940), Japan (386,974) and the Philippines (362,101).
BMI Upbeat About Long-Term Outlook
Looking forward, BMI remains positive about the long-term outlook for Malaysian tourism, which continues to benefit from strong government support and a relatively secure and stable political situation. The country offers a range of tourism options, from travel for meetings, incentives, conferences and exhibitions (MICE) to beach holidays, and the government is committed to supporting an industry that is an important generator of foreign exchange.
In October 2011, Minister of Tourism Ng Yen Yen launched a new national tourism strategy, the Malaysia Tourism Transformation Plan 2020 Towards 36:168, at the World Tourism Conference in Kuala Lumpur. The ‘36:168’ refers to the country’s aims of attracting 36mn tourists and generating MYR168bn in annual tourism revenue by 2020. The Ministry of Tourism has prioritised five areas of tourism: affordable luxury, family fun, events and entertainment, business tourism and nature adventure. The government is also keen to attract more middle-to-high-income tourists.
BMI welcomes the priority given to tourism by the Malaysian authorities. We believe 36mn tourist arrivals by 2020 is achievable based on current trends, with our own forecasts projecting an increase of 28% in arrivals between 2011 and 2016 alone. Over the same period, we forecast a 36.2% increase in tourism revenue to just under MYR80bn. We remain confident that Malaysia can continue to expand its tourism industry, though demand from key European markets may remain depressed in 2012 as fears of a double-dip recession in the region grow.
Malaysia Airlines Still In Difficulties
In March 2012, Australian carrier Qantas said negotiations with Malaysia Airlines (MAS) over the establishment of a new joint venture premium airline had collapsed. According to Qantas, the airlines could not agree on commercial terms for the deal. Instead, MAS will reportedly carry out a soft launch of its own premium regional airline, though further details about this service were not publicly available at the time of writing.
The collapse of the Qantas talks followed MAS posting its worst ever loss, of MYR2.5bn, for 2011. The loss reflected a 21% increase in expenditure over the year. The airline’s cargo division also recorded a pre-tax loss of MYR19mn for the year, as the global economy slowed, notably in the second half of the year. On the positive side, the airline managed to generate a 2% increase in revenue to MYR13.9bn and carried 17mn passengers, an increase of 1.3mn from 2010.
The main concern for the airline is how to control costs. In December 2011, MAS said it would suspend eight loss-making routes in Q112 to try to cut costs. The affected routes include direct flights to Surabaya, Dubai, Johannesburg and Rome, plus services with stopovers such as Langkawi-Penang-Singapore and Kuala Lumpur-Cape Town-Buenos Aires. The rationalisation of the network should enable the airline ‘to retire and return some 58 aircraft from now up to 2014’, CEO Jauhari Ahmad Jauhari Yahya said. This will enable MAS to retire its oldest aircraft, with a view to the airline having a fleet of 80 planes by the end of 2012 with an average age of 7.7 years.
The rationalisation of long-haul routes highlights the difficult situation MAS finds itself in, It is under pressure to cut costs but it is also important to keep key direct services in place. The airline’s management is hopeful it can cut losses to MYR165mn in 2012 before returning to profit in 2013. However, the operating environment for all airlines remains highly challenging.
Tourism Report of Malaysia Q2 2012
Published: May 2012 No. of Pages: 67 Price: US $ 1175
Table of Contents
In 2011, Malaysia welcomed over 24.71mn tourists, an increase of 0.6% year on year (y-o-y). Tourism receipts for the year totalled MYR58.3bn, up by 3.2% y-o-y. Over the past 12 months, the Malaysian tourism industry was not immune to a drop in tourism demand from Japan, following the earthquake and tsunami in March 2011, and Europe, where the sovereign debt crisis remains a concern. Later in 2011, Thailand, another key source market for inbound tourism, was devastated by the worst flooding there in 50 years. As a result, arrivals from Japan were down by 7% y-o-y in 2011, to 386,974, while arrivals from Thailand were down by 1.1%, at 1,442,048.
However, despite the various challenges, Malaysia managed to post slightly positive growth in tourist arrivals for the year, which bodes well for a stronger performance in 2012. Looking at the source markets, there was particularly strong growth in arrivals from the sizeable potential markets of China (up by 10.6% in 2011), Russia (up 21.3%) and South Africa (up 19.1%). Malaysia is also increasingly popular with Iranian tourists, which increased by 20.1% y-o-y. Figures from Tourism Malaysia show the top-10 tourist-generating markets during 2011 were: Singapore (13.37mn), Indonesia (2.13mn), Thailand (1.44mn), Brunei (1.23mn), China (including Hong Kong and Macau, 1.25mn), India (693,056), Australia (558,411), the UK (403,940), Japan (386,974) and the Philippines (362,101).
BMI Upbeat About Long-Term Outlook
Looking forward, BMI remains positive about the long-term outlook for Malaysian tourism, which continues to benefit from strong government support and a relatively secure and stable political situation. The country offers a range of tourism options, from travel for meetings, incentives, conferences and exhibitions (MICE) to beach holidays, and the government is committed to supporting an industry that is an important generator of foreign exchange.
In October 2011, Minister of Tourism Ng Yen Yen launched a new national tourism strategy, the Malaysia Tourism Transformation Plan 2020 Towards 36:168, at the World Tourism Conference in Kuala Lumpur. The ‘36:168’ refers to the country’s aims of attracting 36mn tourists and generating MYR168bn in annual tourism revenue by 2020. The Ministry of Tourism has prioritised five areas of tourism: affordable luxury, family fun, events and entertainment, business tourism and nature adventure. The government is also keen to attract more middle-to-high-income tourists.
BMI welcomes the priority given to tourism by the Malaysian authorities. We believe 36mn tourist arrivals by 2020 is achievable based on current trends, with our own forecasts projecting an increase of 28% in arrivals between 2011 and 2016 alone. Over the same period, we forecast a 36.2% increase in tourism revenue to just under MYR80bn. We remain confident that Malaysia can continue to expand its tourism industry, though demand from key European markets may remain depressed in 2012 as fears of a double-dip recession in the region grow.
Malaysia Airlines Still In Difficulties
In March 2012, Australian carrier Qantas said negotiations with Malaysia Airlines (MAS) over the establishment of a new joint venture premium airline had collapsed. According to Qantas, the airlines could not agree on commercial terms for the deal. Instead, MAS will reportedly carry out a soft launch of its own premium regional airline, though further details about this service were not publicly available at the time of writing.
The collapse of the Qantas talks followed MAS posting its worst ever loss, of MYR2.5bn, for 2011. The loss reflected a 21% increase in expenditure over the year. The airline’s cargo division also recorded a pre-tax loss of MYR19mn for the year, as the global economy slowed, notably in the second half of the year. On the positive side, the airline managed to generate a 2% increase in revenue to MYR13.9bn and carried 17mn passengers, an increase of 1.3mn from 2010.
The main concern for the airline is how to control costs. In December 2011, MAS said it would suspend eight loss-making routes in Q112 to try to cut costs. The affected routes include direct flights to Surabaya, Dubai, Johannesburg and Rome, plus services with stopovers such as Langkawi-Penang-Singapore and Kuala Lumpur-Cape Town-Buenos Aires. The rationalisation of the network should enable the airline ‘to retire and return some 58 aircraft from now up to 2014’, CEO Jauhari Ahmad Jauhari Yahya said. This will enable MAS to retire its oldest aircraft, with a view to the airline having a fleet of 80 planes by the end of 2012 with an average age of 7.7 years.
The rationalisation of long-haul routes highlights the difficult situation MAS finds itself in, It is under pressure to cut costs but it is also important to keep key direct services in place. The airline’s management is hopeful it can cut losses to MYR165mn in 2012 before returning to profit in 2013. However, the operating environment for all airlines remains highly challenging.
Tourism Report of Malaysia Q2 2012
Published: May 2012 No. of Pages: 67 Price: US $ 1175
Table of Contents
Executive Summary . 5
SWOT Analysis . 7
Malaysia Tourism SWOT ... 7
Malaysia Political SWOT .. 8
Malaysia Economic SWOT 9
Malaysia Business Environment SWOT ... 10
Industry Forecast Scenario ... 11
Arrivals . 11
Table: Arrivals, 2009-2016 .. 12
Accommodation 13
Table: Hotels Data, 2009-2016 (‘000, unless stated) ... 13
Expenditure ... 13
Table: Tourist Expenditure And Economic Impact, 2009-2016 ... 14
Inbound Tourism ... 14
Table: Inbound Tourism, 2009-2016 ... 15
Increasing MICE Trade ... 16
Outbound Tourism 17
Table: Outbound Tourism, 2009-2016 . 17
Market Overview – Travel .. 19
Commercial Airlines . 19
Global Oil Products Price Outlook ... 21
Market Overview – Hospitality .. 27
Accommodation 27
Health Tourism . 28
H5N1 Update ... 31
Business Environment Outlook 32
Table: Asia Pacific Tourism Business Environment Ratings 32
BMI’s Security Ratings . 33
Table: Asia Pacific Regional Security Ratings . 33
Table: Asia Pacific State Vulnerability To Terrorism Index 34
Malaysia’s Risk Ratings ... 34
South Asia Security Overview ... 35
South Asia In A Global Context ... 35
Challenges And Threats To Stability And Security... 36
External Power Dynamics ... 45
Outlook For South Asia ... 47
Global Assumptions .. 50
Table: Global Assumptions, 2010-2016 ... 50
Developed States ... 51
Table: Developed States’ Real GDP Growth, 2010-2013 52
Emerging Markets. 53
Table: Emerging Markets’ Real GDP Growth, 2010-2013 .. 53
Consensus . 54
Table: Real GDP Growth Consensus Forecasts, 2012 And 2013 54
Company Profiles ... 55
AirAsia . 55
Genting Malaysia. 58
Malaysia Airlines . 60
BMI Methodology ... 63
How We Generate Our Industry Forecasts ... 63
Tourism Industry .. 63
Tourism Ratings – Methodology .. 64
Table: Tourism Business Environment Indicators ... 65
Table: Weighting of Components . 66
Sources 66Table: Arrivals, 2009-2016 . 12
Table: Hotels Data, 2009-2016 (‘000, unless stated) . 13
Table: Tourist Expenditure And Economic Impact, 2009-2016 . 14
Table: Inbound Tourism, 2009-2016 . 15
Table: Outbound Tourism, 2009-2016 . 17
Table: Asia Pacific Tourism Business Environment Ratings. 32
Table: Asia Pacific Regional Security Ratings . 33
Table: Asia Pacific State Vulnerability To Terrorism Index . 34
Table: Global Assumptions, 2010-2016 . 50
Table: Developed States' Real GDP Growth, 2010-2013 . 52
Table: Emerging Markets' Real GDP Growth, 2010-2013 . 53
Table: Real GDP Growth Consensus Forecasts, 2012 And 2013 . 54
Table: Tourism Business Environment Indicators . 65
Table: Weighting of Components . 66
SWOT Analysis . 7
Malaysia Tourism SWOT ... 7
Malaysia Political SWOT .. 8
Malaysia Economic SWOT 9
Malaysia Business Environment SWOT ... 10
Industry Forecast Scenario ... 11
Arrivals . 11
Table: Arrivals, 2009-2016 .. 12
Accommodation 13
Table: Hotels Data, 2009-2016 (‘000, unless stated) ... 13
Expenditure ... 13
Table: Tourist Expenditure And Economic Impact, 2009-2016 ... 14
Inbound Tourism ... 14
Table: Inbound Tourism, 2009-2016 ... 15
Increasing MICE Trade ... 16
Outbound Tourism 17
Table: Outbound Tourism, 2009-2016 . 17
Market Overview – Travel .. 19
Commercial Airlines . 19
Global Oil Products Price Outlook ... 21
Market Overview – Hospitality .. 27
Accommodation 27
Health Tourism . 28
H5N1 Update ... 31
Business Environment Outlook 32
Table: Asia Pacific Tourism Business Environment Ratings 32
BMI’s Security Ratings . 33
Table: Asia Pacific Regional Security Ratings . 33
Table: Asia Pacific State Vulnerability To Terrorism Index 34
Malaysia’s Risk Ratings ... 34
South Asia Security Overview ... 35
South Asia In A Global Context ... 35
Challenges And Threats To Stability And Security... 36
External Power Dynamics ... 45
Outlook For South Asia ... 47
Global Assumptions .. 50
Table: Global Assumptions, 2010-2016 ... 50
Developed States ... 51
Table: Developed States’ Real GDP Growth, 2010-2013 52
Emerging Markets. 53
Table: Emerging Markets’ Real GDP Growth, 2010-2013 .. 53
Consensus . 54
Table: Real GDP Growth Consensus Forecasts, 2012 And 2013 54
Company Profiles ... 55
AirAsia . 55
Genting Malaysia. 58
Malaysia Airlines . 60
BMI Methodology ... 63
How We Generate Our Industry Forecasts ... 63
Tourism Industry .. 63
Tourism Ratings – Methodology .. 64
Table: Tourism Business Environment Indicators ... 65
Table: Weighting of Components . 66
Sources 66Table: Arrivals, 2009-2016 . 12
Table: Hotels Data, 2009-2016 (‘000, unless stated) . 13
Table: Tourist Expenditure And Economic Impact, 2009-2016 . 14
Table: Inbound Tourism, 2009-2016 . 15
Table: Outbound Tourism, 2009-2016 . 17
Table: Asia Pacific Tourism Business Environment Ratings. 32
Table: Asia Pacific Regional Security Ratings . 33
Table: Asia Pacific State Vulnerability To Terrorism Index . 34
Table: Global Assumptions, 2010-2016 . 50
Table: Developed States' Real GDP Growth, 2010-2013 . 52
Table: Emerging Markets' Real GDP Growth, 2010-2013 . 53
Table: Real GDP Growth Consensus Forecasts, 2012 And 2013 . 54
Table: Tourism Business Environment Indicators . 65
Table: Weighting of Components . 66
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