Call to implement long-term tourism recovery plan

KUALA LUMPUR: The Institute for Democracy and Economic Affairs (IDEAS) has urged the government to implement a longterm tourism recovery plan to address the struggling sector.

It said the tourism sector was currently one of Malaysia’s hardest-hit sectors, reeling from the Covid-19 pandemic impact and the subsequent imposition of the Movement Control Order (MCO).

IDEAS said absence of travel and tourists led to a near-collapse of the country’s tourism sector as tourism activities were highly dependent on the movement of people from one destination to another.

The Tourism, Arts, and Culture Ministry (Motac) reported that estimated losses for the tourism sector in the first half of this year to be around RM45 billion due to the impact of the MCO, it said.

“IDEAS welcomes the timely rollout of the short-term economic recovery plan Penjana by the government which provided the necessary relief to protect workers and businesses but it is also essential that a long-term recovery plan is implemented in the near future,” it said in a statement.

IDEAS senior economist Adli Amirullah and research assistant Yohendran Nadar Arulthevan in a working paper titled “Tourism Recovery Plan: An Opportunity for Change Post Covid-19”, said before the pandemic, tourism was already struggling with a number of structural challenges.

This includes:

MALAYSIA’S international tourism numbers have been stagnant compared with regional peers such as Thailand and Singapore, and government spending on tourism-related services has been flat;

THE industry is suffering from a lack of innovation, with domestic small- and medium-enterprises (SMEs) slow to adapt to new consumer preferences. SMEs in the industry are being held back by a lack of Internet connectivity, particularly in rural areas and by outdated regulations which do not promote competition;

THE tourism industry also demonstrates risk aversion and preference for the status quo, in the face of new disruptive technologies which are transforming the industry; and,

FINALLY, the recent pandemic has exposed gaps in the social protection framework with many informal workers not eligible for support.

“IDEAS recommends that a long-term strategy be developed alongside the short-term stimulus package.”

The duo in the working paper also said that the long-term strategy would need to:

PROMOTE innovation, including by improving connectivity, particularly in rural areas;

SUPPORT competition, including by updating outdated legislation and regulations including the Tourism Act; and

ENSURE social protection is extended to informal workers to create the space for innovation and mobility.

IDEAS chief executive officer Tricia Yeoh said tourism was one of the sectors which has been the hardest hit by the pandemic and with restrictions on international travel set to continue the disruption could last for months if not years.

“This crisis has hit an industry already struggling to adapt to new consumer trends and technologies.

“A short-term survival plan will not be enough — a long-term strategy is also needed to support the tourism industry — and SMEs in particular to innovate and compete in this challenging environment,” she said.