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Hotel Industry In Malasia

INTRODUCTION

During 1997 until 2002, the Malaysian economy experienced slower growth as compared to previous years.
This was due to global events such as the September 11 attacks, global economies slowdown, the Bali bombings, the
Severe Acute Respiratory Syndrome (SARS), and bird flu. All this had caused a significant impact on the travel and
tourism industry in Malaysia.

The numbers of inbound and outbound tourists have been decreasing due to an avoidance of travel.
Tourism arrivals to Malaysia dropped from 13.29 million in 2002 to 10.58 million in 2003 (fell by 20.4%). However
this decrease was not as serious as those that were experienced by some of Malaysia’s neighboring countries like
Singapore and Indonesia. This was perhaps due to the aggressive promotional activities by the Malaysia Tourism
Promotion Board (Tourism Malaysia). Tourism Malaysia’s aggressive promotions and the economic relief package
extended by the government to the players in the travel industry enabled the industry to recover quite well. The
promotional efforts of Tourism Malaysia as well as Malaysia’s increasingly strong reputation as a center for
international events, for example the OIC Conference, the F1 Grand Prix, etc., boosted the slow economy and ensure
that the balance of tourism payments still remain positive. Furthermore, due to Bank Negara Malaysia’s policy on
keeping the US$ peg for the past few years, the relatively weaker Malaysian currency has become a positive factor
for inbound tourism, while making outbound tourism more expensive. At the same time, domestic tourism has been
steadily increasing over the period, rising 11% in 2002 to 22.2 million trips. This is because Tourism Malaysia by
carrying out programmes such as Cuti-cuti Malaysia that are aimed at encouraging domestic travel has undoubtedly
contributed to the increase (Malaysia Tourism Promotion Board, 2004).

However, the hospitality industry that was still...