The increased revenues can help prop up Southeast Asia’s third-biggest economy, offsetting a slowdown in exports, analysts say.
“If there is a sudden surge in Chinese and Indian travelers for both leisure and business because of the visa-free travel, it’s going to move the needle,” Wan Suhaimie Wan Mohd Saidie, head of economic research at Kenanga Investment Bank in Malaysia, said.
However, the huge increase in tourist arrivals will not happen anytime soon because the visa-free policy was only launched this month, Wan Suhaimie said.
“It may take some time for the traffic flow to build up. Perhaps we may see more clarity after the first quarter of 2024.”
Winston Liaw Kit Siong, chairman of the Sabah Association of Tour and Travel Agents in Malaysia, said the country’s economy would “be much better” next year because increased tourists arrivals will help the economy to gain more momentum.
On Nov 26, Malaysia’s Prime Minister Anwar Ibrahim said his country is allowing visa-free entry to citizens of China and India for stays of up to 30 days from this month.
The visa exemptions would last until Dec 31 next year, the Home Affairs Ministry said.
Anwar said the visa-free travel is in line with next year’s celebrations of the 50th anniversary of the establishment of diplomatic ties between Malaysia and China. He also thanked China for allowing visa-free travel for Malaysian citizens.China announced on Nov 24 that since Dec 1, citizens of France, Germany, Italy, Malaysia, the Netherlands and Spain will be allowed to enter China for up to 15 days without a visa. The policy will be in place for at least a year.
China and India are among Malaysia’s biggest sources of tourists, according to the Malaysian Tourism Promotion Board.
Prior to the COVID-19 pandemic, arrivals from these two countries had been growing steadily in the preceding few years.
In 2013, Chinese tourist arrivals hit nearly 1.8 million, while those from India were at more than 650,000. By 2019, Chinese tourist arrivals reached more than 3 million, while Indian tourist arrivals increased to more than 735,000.
As borders reopened last year, India and China became the fourth- and sixth-largest sources of tourists for Malaysia, respectively.
Malaysia received more than 10 million tourists last year, less than half of the more than 26 million recorded in 2010.This year, the country had aimed for 16.1 million tourist arrivals, with projected tourism receipts of $10.5 billion. That target has been surpassed, with the immigration department reporting 26 million arrivals from Jan 1 to Nov 15, the national news agency Bernama reported.
The revival in inbound tourism, combined with resilient domestic demand, has pushed the Malaysian economy to expand by 3.3 percent. The recovery in the tourism sector has partially offset the weaker demand for exports, and tourism will remain a key growth driver next year, the country’s central bank said.
“What was once a thriving sector of Malaysia’s economy, contributing around 6.8 percent to the GDP in 2019, the tourism industry suffered the consequences of the two-year pandemic,” Chin Yew Sin, adviser for Asia-Pacific region at the Global One Belt One Road Association in Bangkok, told China Daily
