Malaysia's tourism sector faces collapse if borders are not open soon!

I have been consistent in calling for the full opening of the border to boost not only tourism but also the economy at large. Malaysia is a step too slow considering that our neighboring countries as well as many other countries have announced a full opening. Under Thailand’s “Test and Go” program, tourists can travel all over Thailand after they’ve received a negative test result on their first COVID-19 test without quarantine. The Philippines suspended its color-coded country classification program in favor of opening it to vaccinated travelers who test negative via a PCR test with no quarantine. Denmark, the UK, Sweden, Dubai, and major cities across America have gone a step further and removed all forms of covid restriction.

We must also bear in mind that Malaysia is currently one of the most vaccinated countries in the world, with close to 80% of the total population and 99% of adults being double vaccinated. More than half of the population is even boosted with the third dose.

The pandemic has left hard-to-heal wounds on the tourism sector's growth.

Tourism is labor-intensive, employing 3.5 million workers, or 23.1 percent of jobs. Once the sector recovered, the unemployment rate is expected to reduce significantly which translates into labor income increases. The increase in labor income will stimulate demand in the economy and improve private consumption on the demand-side of gross domestic product (GDP).

The key measure for the growth of the tourism sector is the arrival and movement of tourists. The gross value added to the tourism sector contracted by 17.1 percent from RM240.5 billion in 2019 to RM199.4 billion in 2020.

A similar trend was observed for employment generation. The capacity of the tourism sector to absorb employment reduced by 2.9 percent, from 3,561,000 in 2019 to 3,457,000 in 2020.

The international border closure and restriction have resulted in Malaysia losing about 71.2% to RM90 billion in tourism receipts in 2020 with the figure increasing in 2021 to RM165 billion.

The tourism industry had generated RM199.4 billion of Gross Value Added of Tourism Industry (GVATI) by contributing 14.1 percent to the Gross Domestic Product (GDP). Inbound tourism expenditure plummeted with a double-digit decline to 84.6 percent, recording only RM13.7 billion.

From an economic perspective, especially the survival of businesses and livelihood of tourism-related employment, reopening borders to international tourists without restrictions is an absolute necessity!