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RR RUEHBC RUEHCHI RUEHDA RUEHDE RUEHDT RUEHGI RUEHHM RUEHJS RUEHKUK
RUEHLH RUEHNH RUEHPW RUEHROV
DE RUEHKL #0526/01 1720926
ZNR UUUUU ZZH
R 200926Z JUN 08
FM AMEMBASSY KUALA LUMPUR
TO RUEHC/SECSTATE WASHDC 1241
INFO RUCNASE/ASEAN MEMBER COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUCNISL/ISLAMIC COLLECTIVE

UNCLAS SECTION 01 OF 02 KUALA LUMPUR 000526 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON ETRD EIND MY
SUBJECT: Tourism Growth in "Malaysia, Truly Asia" 
 
Summary 
------- 
 
¶1. Tourism is a growth industry in Malaysia.  The government's 
"Visit Malaysia 2007" tourism campaign, with its ubiquitous 
"Malaysia, Truly Asia" theme song, enticed a record number of 
foreign tourists in 2007.  Recent statistics portend continued 
strong growth in 2008.  Tourists from Southeast Asia make up the 
bulk of arrivals, but the government is striving to attract more 
long haul travelers who will spend more while they're in Malaysia. 
The government is actively promoting eco tourism, as well as areas 
of Malaysia outside the typical tourist draws.  Middle Eastern 
tourists are a small but influential group which Malaysia makes a 
strong effort to attract. End Summary. 
 
Tourism A Growing Industry in Malaysia 
-------------------------------------- 
 
¶2. The tourism industry contributes substantially to Malaysia's 
national income and is a significant component in the growth of the 
country's services sector.  Almost 21 million tourists visited 
Malaysia in 2007, contributing RM 46.1 billion (USD 14.7 billion) in 
revenue (equaling approximately 7% of GDP).  This was substantially 
more than in 2006, when 17.5 million foreign arrivals spent about RM 
36.2 billion.  The government heavily promoted tourism in 2007, the 
50th anniversary of Malaysian independence.  The success of the 
"Visit Malaysia 2007" promotion caused the government to extend the 
campaign through August 2008.  Tourism Malaysia now is forecasting 
21.5 million tourisQin 2008 who are expected to spend about RM50 
billion (USD 15 billion).  The success of thQisit Malaysia 2007 
campaign also has spurred Malaysian state governments to embark on 
similar campaigns this year, including the states of Qengganu, 
Kelantan and Kedah in eastern peninsular Malaysia. 
 
¶3. Tourists from Malaysia's Southeast Asian neighbors make up the 
bulk of arrivals, with Singaporeans (many of whom come for day 
trips) accounting for one-half of all foreign arrivals in 2007, 
followed by Thais, Indonesians and Bruneians.  The largest source of 
non-ASEAN tourists is China, followed by India, Japan, Australia and 
the United Kingdom.  Malaysia recorded 204,844 tourist arrivals from 
the United States in 2007, a 17.5% percent increase from the year 
before, though U.S. visitors comprise less than one percent of all 
foreign arrivals. 
 
¶4.  According to Tourism Malaysia, the GOM has allocated some RM200 
million (USD 63 million) for promotional activities to bring in 
targeted tourists.  Working with other countries in the ASEAN 
region, Tourism Malaysia also has organized "one destination, two 
nations" packages that promote the tourist industries of both 
Malaysia and a neighboring country, with each country promoting 
their tourist products through their respective national carrier 
airlines and travel agents. 
 
Focus On Traditional Villages 
----------------------------- 
 
¶5. A representative from a group of Malaysian hotel owners told Econ 
FSN that many attractive destinations in Malaysia have not 
successfully exploited their tourism potential.  The bulk of 
tourists continue to concentrate in such areas as Kuala Lumpur, 
Penang, Langkawi, Malacca, and Johor (which is adjacent to 
Singapore).  The rep suggested that travel agencies should be 
encouraged to organize ground tours by bus or train, to include 
stops at traditional villages throughout Malaysia. Such tours could 
emphasize Malaysia's culture, including history sites, cultural 
heritage, traditional food as well as the creation of local 
handicrafts such as batik and songket (hand-woven cloth).  Smaller 
towns would welcome the boost to their economies, and international 
tourists would welcome the opportunity to learn and see all these 
rather than looking at modern buildings, according to our contact. 
Minister of Tourism Azalina Othman has echoed similar views, saying 
Malaysia should "sell our uniqueness" instead of just trying to 
compete with neighbors Singapore and Thailand. 
 
¶6. A Tourism Malaysia official told Econ FSN that he agreed with the 
hotel owners' rep that Malaysia should encourage tourists to spread 
out to other destinations. This was all the more necessary during 
peak periods when insufficient accommodation is available, primarily 
during the Middle Eastern tourist season in summer as well as during 
high profile events like the March Formula 1 race near Kuala Lumpur. 
 
 
New Approaches to Promoting Tourism 
----------------------------------- 
 
¶7. According to a Tourism Malaysia official, the government is 
interested in promoting higher end tourism to attract visitors who 
will stay longer in Malaysia and spend more money than short term 
visitors from neighboring countries. Among potential tourists 
targeted are South Koreans, ChinesQrom the eastern seaboard of 
mainland China, other East Asians, and Middle Easterners.  TourQ 
 
KUALA LUMP 00000526  002 OF 002 
 
 
Malaysia hopes that increasing numbers of visitors from these areas 
will raise Malaysia's image as a premier, quality and good-value 
destination.  Statistics show that some 70 percent of tourists are 
from Southeast Asia, 15 percent from Asia, with only about 15 
percent from other parts of the world. 
 
¶8. Malaysia makes a special effort to attract tourists from the 
Middle East.  Tourism Malaysia recently launched a promotion 
entitled "Feel At Home" to encourage visitors during the Muslim holy 
month of Ramadan, typically a period when Muslims stay close to 
home. With Ramadan falling in the summer over the next few years, 
which is also the high tourist season in Malaysia for Middle 
Easterners seeking relief from the heat, Malaysia wants to ensure 
that it does not lose a particularly important source of 
deep-pocketed tourists.  Malaysia plans to invite imams from Mecca 
to lead daily prayers for the benefit of Middle Eastern tourists, 
and will also expand and enhance the "Arab Street" section in the 
heart of Kuala Lumpur's tourist zone.  Kuala Lumpur International 
Airport now makes announcements in Arabic, and immigration counters 
include designated lanes with Arabic-speaking inspectors. 
 
¶9. Malaysia has many great eco tourism attractions, especially a 
large number of national parks containing relatively untouched 
nature, beautiful landscapes and rich flora and fauna.  A Tourism 
Malaysia official said the government is committed to promoting eco 
tourism, which helps promote environmental preservation and wildlife 
conservation.  The MTB official said Malaysia is particularly 
interested in such tourists since they are willing to pay a premium 
to visit ecotourism sites. 
 
¶10. Ministry of Tourism officials have admitted that government 
agencies need to work more closely with the private sector to come 
up with more interesting and creative products to help make 
permanent Malaysia's recent gains in tourism.  Tourism Malaysia is 
focused on raising service standards, such as providing better 
information counters in airports, shopping areas and hotels, 
including more directional signs in Mandarin, Arabic and Japanese. 
Malaysia is also pushing other programs to improve its reputation 
among potential foreign tourists.  For example, Tourism Minister 
Azalina has proposed a training center to teach manners to taxi 
drivers and other tourism industry personnel.  She has also pushed 
for eradication of unscrupulous taxi touts at Kuala Lumpur 
International Airport; KLIA has now moved the ticket counter for 
approved taxi service to the front of the arrival area so that 
tourists cannot miss it. 
 
Comment 
------- 
 
¶11. Malaysia has attracted increasing numbers of tourists by 
leveraging well its numerous advantages.  With reasonably priced 
lodging and food, well-developed infrastructure including modern 
airports and highways, and attractive air fares (Malaysia is home to 
the region's largest budget air carrier, Air Asia), Malaysia has 
been able to carve out a growing niche in the competitive Southeast 
Asia tourist market. It is a particularly attractive destination for 
Middle Easterners, who can enjoy a multicultural Southeast Asian 
experience in a well-developed country that caters to Muslim 
strictures.  Malaysia will continue to face significant competition 
from its neighbors, but is well positioned to increase its share of 
the region's tourism market. Tourists from the United States will 
continue to be relatively uncommon, however, especially given the 
distance (no U.S. carriers serve Malaysia, and the most direct 
routing currently available exceeds 18 hours flight time). 
 
KEITH