1. < Insert your preferred
National Key Economic Area
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Tourism
Dr Sarinder Kumari
Director, NKEA Tourism
sarinder@pemandu.gov.my

2. NKEA Overview
Incremental GNI (2020)
RM billion
Oil, Gas & Energy 131
Palm Oil & Rubber 125
Financial Services 121
Wholesale & Retail 108
Tourism 67
Business Services 59
E&E 53
CCI 36
Healthcare 35
Education 34
Agriculture 29
Greater KL/KV 1 392
1 Other NKEA GNI impact that directly contributes to Greater KL/KV’s GNI
1

3. Tourism is projected to be the 5th highest
contributing sector in Malaysia
The AMBITION: To grow the sector 3x by
2020
Inbound tourism receipts (2004-10)
Receipts (RM Bn)
100.0
+12%
53.3 56.5
46.1 49.6
50.0 36.3
29.7 32.0
0.0
2004 2005 2006 2007 2008 2009 2010
Tourism with Gross National Income of RM37.4 billion in 2011
2

4. Key strategic focus on enhancing yield per visitor
Tourist 3x 168
53
receipts
(RM Billion)
RM1 billon / week RM3 billion / week
# arrivals 1.5x 36
24
(Million)
Spend /
YIELD
2x 4,675
arrival 2,260
(RM)
Global #13 Top 10
ranking In receipts In receipts
2009 2020
3

5. To achieve this growth ambition, we identified
12 high impact projects across 5 themes
3x growth by 2020
Events,
Affordable Luxury Nature Family Business
Entertainment
(i.e. shopping) adventure Fun Tourism
and Spa & Sports
1• Duty free for wider 4• Malaysia as the 5• 1 new large 7• Target more 10 Establish Malaysia
•
range of goods preeminent mega Integrated Resort international as a leading
bio-diversity hub events Business Tourism
– rainforest &
marine destination
2• BB-KLCC as discovery
6• Straits Riviera: 8• Establish dedicated
premier shopping centres Increase entertainment
district competitiveness in zones
– enhanced live high-end cruise +
3• 3 new premium bio-diversity urban
outlets sites redevelopment of 9• Spa & Sports (golf,
angling)
port landing area
11 Connectivity (greater focus on medium connectivity to support growth)
12 Hotels (ensuring adequate supply with better mix, better rates)
Enablers (Marketing, Visa, Funding, Human Capital, Tourism Environment)
4

6. EPP 1 – Positioning Malaysia as a Duty Free Shopping Destination
GNI Jobs Funding
RM0.0Bn
RM7.8Bn 64k jobs
(0% public)
• Budget 2011 announced
abolishment of duties for 328
Case for change: Import Duty items
• Malaysia has lower shopping spend Abolishment
per visitor • Ministry of Tourism (Shopping
• Driven by higher prices and limited Secretariat) to enhance consumer
selection of goods awareness on duty free items
• Shopping identified as key lever to
raise yields
RM per visitor
1,311
988
631
• Quarterly tracking of tourist
Malaysia Singapore Hong
Shopping spend is being carried out by
Shopping as Kong In
share of total Tourism Malaysia
receipts 28% 35% 57% Spend progress
(2009) • Percentage shopping spend for
2011 recorded 30% (Target:29%)
Target:
• Increase shopping spend to 35% of
projected spend by 2020
Tourist Shopping Spend in Malaysia (RM)
1,636
631
2009 2020
Shopping as
share of total
receipts
28% 35%
Note : Data from Boston Consulting Group
5

7. EPP 2 - Bukit Bintang-Kuala Lumpur City Centre Shopping Precinct
GNI Jobs Funding • BB-KLCC Tourism Association set up with
Establishment of 30 members to date.
RM50m
RM1.2Bn 14k jobs
(100% public) the BB-KLCC • Members comprise both private and
Tourism public sector representatives, with the
Case for change: Secretary General of Ministry of Tourism
• Poor pedestrian connectivity limiting Association as the advisor.
tourist flows within BB-KLCC area
• Strict regulations (e.g. advertising boards
and restricted operating hours) limit the
vibrancy of this district
Covered • 1.35km of covered walkways to inter-
• As a result the retail revenue for this area is
connect destinations between KLCC and
not optimal compared to other regional
districts
Walkway Berjaya Times Square.
Target:
• Raise retail revenue per square feet from
RM950 to RM3,028 by 2020
Promotion of the • Calendar of Events drawn up to coordinate
RM Per Sq Feet Per Annum
BB-KLCC activities amongst all building owners
Shopping • Joint promotional activities targeted In
especially for regional markets progress
2009 2020 Precinct
6

8. EPP 3 – Establishing Premium Outlets in Malaysia
GNI Jobs Funding
• Johor Premium Outlets was
RM0.9Bn 1.5k jobs
RM0.4Bn Establishment of officiated on 11 Dec 2011 by YAB
(0% public)
Johor Premium Prime Minister of Malaysia. Phase
Case for change: Outlets I consists of 80 outlets (Phase II
• Currently no premium outlets in will feature 60 outlets)
South East Asia
• Potential for Malaysia to take the
lead ahead of its nearest
Progress of Outlet • Sepang Outlets: Target to identify
competitors In
Center in Sepang investors by December 2012. progress
Target:
• Establish 3 outlets by 2020
– Iskandar Malaysia (to cater to
tourist arrivals into Iskandar) New Premium • Facilitate investors to set up outlet
– Sepang (to cater for transit Outlets centers in Malaysia In
progress
passengers, Klang Valley
visitors)
– Penang (to cater to tourist
arrivals in the North)
Penang
Sepang
Launching of Johor Premium Outlets by
Iskandar YAB Prime Minister
7

9. EPP 4 – Establishing Malaysia as a Global Biodiversity Hub
GNI Jobs Funding
• Board chaired by the Secretaries General
RM1.5Bn 3k jobs
RM0.9Bn MMBH of the Ministry of Natural Resources and
(33% public)
Interim Environment and the Ministry of Tourism
Board with members from the public and private
Case for change: sectors including NGOs has been set up.
• Malaysia has ranked 12th in biodiversity
index1
• High potential to increase tourism receipts Rainforest
given Malaysia’s Unique biodiversity offering • Feasibility Study on the proposed RDC has
Discovery been completed. Steps are being
In Progress
Price difference between packages in Malaysia Center (RDC) undertaken towards implementation.
vs. Galapagos and add-on inclusions
RM
10,000 +51% 9,280
• Aquaria KLCC has been identified as the
5,000 4,080 Marine MDC. In Progress
Discovery • Additional Rainforest and Bio Diversity
0 Center Display at new Renovated Extension of
Mabul Galapagos
(MDC) Aquaria KLCC being set up with expected
• Currently faces negative perception on completion by September 2012.
conservation and in danger of losing its
biodiversity if actions not taken.
Target:
Establishing Malaysia as one of the world's
premium ecotourism destination
• Promotions and marketing of 'iconic' sites/
species
1Based on Malaysia – Second National Communication Report to UNFCCC 8

10. EPP 4 – Establishing Malaysia as a Global Biodiversity Hub
• 100% completion for the following live sites:
• Mulu Park – New 1 km Botanical Boardwalk
• Tioman – 2 New Pontoons and existing Facilities upgraded for
Live Site Upgrades wheelchair access In Progress
• Royal Belum – 14 new floating jetties for key sites
• Taman Negara, Kinabalu Park & Kuala Gandah site upgrades are
ongoing
Mulu
Royal Belum Kinabalu Park
K. Gandah
Taman Negara
Tioman
RDC
Marine Sites Completed
Terrestrial Sites In Progress
Johor
MDC
9

11. EPP 5 – Developing an Eco-Nature Integrated Resort in Sabah
GNI Jobs Funding
RM0.7Bn 11k jobs
RM6.7Bn • New RM4.9 Million Restaurant is
(7% public)
now operational
Case for change:
Construction • The Resort Residences have been
• Strong demand from target IR markets Progress approved for development and
(i.e. Indonesia, China, India) construction will commence by
• However, our competitors have taken mid 2012
the lead in tapping into this demand
– Singapore, Vietnam, Philippines
• Approval process ongoing for
Target: development and building plans
• 1 new IR development in Kota Kinabalu for construction In
based on the eco-nature concept Project progress
• Initial implementation will focus
– Green showpiece Implementation on golf and waterfront
– River & Rainforest Safari development, and resort and
– Nature lodges beachfront residences
– Discovery Cove
– Mangrove Centre
– Branded Theme Park
10

12. EPP 6 – Creating a Straits Riviera
• “Formulation of a Cruise & Ferry
GNI Jobs Funding
Integrated Seaport Infrastructure
RM1.8Bn 9.7k jobs
RM2.7Bn Blueprint for Malaysia” has been
(11% public) Cruise completed
Case for change
Infrastructure • The Blueprint evaluated the
Blueprint impediments and also the suitability of
• The cruise market is growing twice as
the existing infrastructure to make
fast as overall tourism
Malaysia an international Cruise
• However, Malaysia has not capitalized
Destination
on this:
– Only 1 out of 4 stops by Carnival
Cruise (a major global cruise • Kota Kinabalu – Currently being
operator) involves Malaysia developed by Suria Capital
Target: Primary Port • Penang – Land issues are being In
progress
• Grow cruise passenger throughput by Developments addressed
more than 3x by 2020 • Klang – To address accessibility and port
facilities
Cruise passages going through Malaysia, but not stopping in Malaysia
Shanghai
UK
Italy &
France
Hong Kong
Miami
Hawaii Dubai
Cochin Singapore
Mexico
Sydney
11

13. EPP 7 – Targeting More International Events
GNI Jobs Funding
Securing of • Government has provided a subvention fund
RM0.4Bn 8k jobs
RM0.5Bn
(100% public)
International to help secure and bid for international events.
Events by the • To date, 10 events have been secured for
Case for change: International 2011-2013 (targeting 70,000 spectators and
• Malaysia, as compared to its spend of RM 67.5 million).
Events Unit (IEU)
neighbouring countries is not a major
destination for major events. Most
events held are small scaled.
• Steps underway to streamline processes,
No. of Events hosted in 2010 Guidelines for provide more clarity and enhance the
International Guidelines for Foreign Artistes by the Central
Malaysia Singapore Australia Events Agency for Application for Filming and In
95 234 742 Performance by Foreign Artiste (PUSPAL) progress
• Stringent requirements on international
performances • With repackaging efforts via clustering, results
were as follows:
Target: • Number of spectators -
• Increase number of international events
Repackaging of • F1 2012 : 119,960 (14% increase from
and foreign visitors to these events F1 & MotoGP 2011)
Total Spectators of Malaysia Events (‘000) • MotoGP 2011: 67,112 (8% increase from
242
2010)
3.5x +514k
Foreign 70
929
Local 587
2009 2020
%Foreign 11% 21%
spectators 12

14. EPP 8 – Establishing Dedicated Entertainment Zones
GNI Jobs Funding
RM0.3Bn • Zouk Club established as a DEZ in
RM0.7Bn 5.6k jobs
(0% public) Kuala Lumpur with an increase in
Designation of patron numbers of 22% in 2011
Case for change: compared to 2010
DEZ
• Stringent regulations for the
entertainment industry and in the • Several venues in Gentings have
operation of nightspots: been designated as DEZs in 2012
– Restricted operating hours
– Restrictions on international
artistes
• Due to overzealous moral policing,
there are significant obstacles and Further • Efforts underway with Local
challenges faced Identification of Authorities to identify suitable
suitable locations in Selangor, Pahang and
Target: locations for DEZ Kota Kinabalu. In Progress
• Double the number of patrons in
entertainment zones
# Annual Visitors (Mil People)
10.7
2.2
5.1 +5.7
8.5
2009 2020
New zone Existing zones
13

15. EPP 9a – Developing and Regulating the Local Spa Industry
• National Spa Council set up with
GNI Jobs
Establish representatives from both public and private
sectors and chaired by the Secretary General
RM0.4Bn 3.5k jobs
National Spa of the Ministry of Tourism
Council • To date, 142 spas in Malaysia have been rated
with 65 spas given 4 to 5-star rating
Case for change:
• Spa Industry has experienced
high growth in last 5 years • Ministry of Tourism is currently working with
• However, shortage of local
Intake of the Ministry of Home Affairs (MOHA) to get
skilled workers and training foreign MOHA’s endorsement on initiatives aimed at In
progressively reducing the dependency on progress
facilities to create talent pool therapists foreign spa therapists in Malaysia.
• Spa Industry is currently
unregulated
• 2 Centers of Excellence (COEs) have been
Establish- established to train and develop local
Target therapists
• Allow hiring of foreign skilled
ment of In
• The spa training courses are being reviewed
spa therapists till 2013. Centers of to enhance the quality of training. These
progress
• Establish 3 Centers of Excellence Excellence courses will be jointly subsidized by the
Government and prospective employers
to train and develop local skilled
spa therapists.
• Establish the National Spa
Council to regulate the spa
industry
14

16. EPP 9b – Golf Tourism
Formation of
• MGTA was officially launched by on 15 Mar 2011
GNI Jobs Malaysia Golf
• MGTA comprises representatives from both private
Tourism
RM0.3Bn 2k jobs and public sectors, and aims to develop and promote
Association golf tourism
(MGTA)
Case for change:
• Develop and implement initiatives and packages to
• Currently sports boost number of golfers coming to Malaysia
promoted only as large • 25 export ready golf courses audited in 2011.
scale one-off events Nationwide Golf • 14 golf courses targeted in 2012. In
progress
rather than continuous Tourism Program • MGTA Member Golf Courses currently utilize the Golf
push and promotion for Traveller™ software (courtesy of the International
sports tourism especially Association of Golf Tour Operators (IAGTO)) to track
the number of golf tourists in Malaysia.
in high yield sports e.g.
golf • Malaysia held the first ever Asian Golf Tourism
Convention in April 2012 attracting 200 international
Promotions and
Target: specialized golf buyer / supplier delegates.
marketing of Golf In
• To promote Malaysia as a • Tourism Malaysia and MGTA to plan clustering events
Tourism around major golf tournaments in Malaysia and
progress
key golf destination and promote golf overseas
to enhance high end golf
tourism by repackaging
product offerings.
15

17. EPP 10 – Establishing Malaysia as a Leading Business Tourism
Destination
GNI Jobs Funding
• Government approved Subvention Funding
for Business Events.
RM0.8Bn Provision of
RM3.9Bn 16.7k jobs
(100% public) Subvention • Criteria, rules and guidelines for subvention
funding are available on the Malaysia
Case for change:
Funding Convention & Exhibition Bureau (MyCEB)
In 2009, Business Tourism accounts for only 5% of website (www.myceb.com.my)
arrivals and 19% of receipts in Malaysia. This sector
has high potential:
•High tourist spend (in RM) 7,418 Bid & Secure • As of Q1 2012, MyCEB Board of Subvention
Business Tourism International approved 76 events, attracting 134,368
2,250
with ~3x average Business delegates, generating RM1.1 billion since
tourist spend 2011.
Leisure tourist MICE Conferences
•High potential for repeat visits (% of MICE visitors)
60
Business Tourism
visitors bring their
25 • MyCEB has signed MoUs for 3 shell sites:
spouses and ~60% • Central Market (Aug 2011)
of them return as
Shell Sites for In
• Thean Hou Temple (Aug 2011) progress
tourists With accompanying Return visit Events & • Putrajaya Maritime Center (Feb 2012)
persons Functions • Efforts underway to identify more shell sites in
•High ROI on Government investment (Ratio per RM
invested) Malaysia (e.g. Penang, Johor)
111:1 111:1
Typical 111x
return per RM
investment by
government
Singapore Thailand
Target:
• Dedicate 2 to 3 shell sites to host Business Tourism
Events
• Allocate adequate subvention funding through
MyCEB 16

18. EPP 11 – Enhancing Connectivity
GNI Jobs Funding
Liberalize Air • Government has liberalized the air
RM84Bn
RM3.3Bn 13k jobs
(1% public) Rights Allocation rights policy which removes restrictions
Policy on routes for national carriers.
Case for change:
• Malaysia ‘s arrivals skewed towards short-
haul due to connectivity gap versus peers
• Medium haul segment has high yields and • Increase flight frequencies and air
presents the largest tourism potential
Increase rights to 6 Priority Medium Haul In
Target:
Countries progress
• Enhance connectivity to 10 priority cities:
(Shanghai, Beijing, Mumbai, Delhi, Sydney,
Connectivity to • China, India, Australia
Melbourne, Tokyo, Osaka, Seoul, Taipei) Medium Haul • South Korea, Taiwan, Japan
% Arrivals mix (2009) Countries • G2G Bilateral Negotiations with
100 7 19 countries
15 36
43
78 36
38 28
0
Malaysia Singapore Thailand
Long haul Medium haul Short haul
17

19. EPP 12 – Hotels
GNI Jobs Funding • Incentives for refurbishment
RM38.8Bn and new hotels have been
RM5.5Bn 64k jobs
(0% public) adjusted to encourage
Incentives for investment in 4- and 5-star
Case for change: building and hotels.
• There is a need to improve the quality and mix of refurbishment • Incentives include eligibility of
hotels to cater for the projected increase in 100 % foreign or locally-owned
of hotels
arrival of high yield tourists. 4- and 5-star hotels for
• The low average room rates in Malaysia has also Investment Tax Allowance and
created a negative cycle : Pioneer Status.
Malaysia
unable to Low rates
Lower salaries/
compete wages • 15 hotels are being monitored
for completion in 2012
Lower returns Quality staff 4- and 5-Star • These new hotels are located in
& thus poached to Hotels the Klang Valley, Melaka,
investments other markets Kuching, Kuantan, Ipoh, Johor In
by investors
Bahru and Sabah progress
Service levels
decline
Target:
• Ensure adequate supply with better mix and
quality of hotels:
 15% of new hotel rooms to be of 5-star
rating.
 Improve quality and service levels of hotels
(particularly 5-star hotels)
18

20. Thank You