Revenge Tourism to hit in 2H 2021?

Asian Property Review gets 7 top Malaysian industry executives to give their opinion on what lies ahead for the travel and property industry.

  1. With the vaccine rollout, do you think there will be revenge tourism in 2H 2021?
  2. Which holiday destinations will see the strongest recovery?
  3. How has the pandemic changed the character of the tourism industry?
  4. How soon do you think travel bubbles will start?
  5. Is now the right time to invest in holiday destinations e.g. Genting Highlands, Melaka, Bali or Phuket?

Dato’ Tan
Kok Liang President, Malaysian Association of Tour and Travel Agents (MATTA)

It’s hard to predict because the situation is very uncertain and fluid. Can we reach herd immunity by August when the percentage of those vaccinated is still very low? I am not sure. Are consumers confident enough to travel? This is subject to government operational and regulatory constraints.

Will there be revenge spending alongside revenge tourism? I hope so but will the economy be good enough for people to have enough disposable income to spend? Maybe yes on a personal level, but even then people are afraid to do advanced bookings due to such money being stuck with airlines and hotels as had happened in 2020. As of today, I do not see much forward bookings; at most it’s about 2 weeks of advance bookings.

Furthermore, due to the continuing ban on interstate travel as of early April 2021, most tourism vehicles which are based in Kuala Lumpur, Selangor and Penang, cannot travel interstate.

Corporate travel will lag behind leisure travel. MICE and business travel will take much longer to recover as people now can do online meetings on Zoom and other platforms.

Local destinations that will see the fastest recovery as seen in 2020 during the RMCO would be Langkawi, Penang, Melaka, the East Coast islands and Sabah and Sarawak (though the latter’s recovery is stifled by travel restrictions).

I believe the Malaysian travel industry is largely dependent on foreign tourists especially those from ASEAN and China, as well as from India, Europe and Australia. With international borders closed, I believe the focus will be on domestic travel for 2H 2021 and 2022. But this would not be enough to sustain the whole tourism ecosystem.

There are over 500 tourism establishments comprising Food & Beverage, theme parks, tour agencies and operators and transportation. Total foreign arrivals have declined by about 83% in 2020 compared to 2019. This translates to billions of ringgit of lost revenue. Domestic tourism itself cannot replace this lost revenue. Moreover, with schools opening up, fewer people will go on holiday.

Cameron Highlands

As a result, the entire tourism landscape in Malaysia has changed. There is a reset back to zero – meaning we have to rethink how to rebuild our shattered industry. We are relooking at what packages are in demand, for example, adventure and ecotourism. Mass tourism and group tours are not doable due to social distancing rules. We must also adapt to consumer behavior, for example, allowing last minute booking flexibility and facilitating digitalization.

As for travel bubbles, we have been talking about it since March 2020, but until today, the ‘bubbles’ have all burst over the past one yea r; none has taken off. In the early days, potential bubbles include Australia and New Zealand; Bali and China, etc. I believe ASEAN should get together to agree on a consistent adoption of framework and adoption of vaccine passport or certification. This has to be a government-to-government effort. At this stage, the private sector can’t do much.

The process of starting travel bubbles won’t be so fast from what I have observed so far. I can’t see the ‘surging of business’ judging from the rate of vaccinations around the world. It’s a positive move forward but it will take much more than that to sustain the tourism market. And if the tourism market is not doing well, this won’t augur well for the property market either.

Brian Koh
Executive Director (Investment), Nawawi Tie Leung Real Estate Consultants Sdn Bhd

Yes, to some degree, the latent demand of pent up frustration of being home bound will see revenge tourism, as partially seen last December, where major domestic destinations were inundated, and there was good response to the hotel flexible promotional offers, with some of these yet to be fulfilled when MCO 2.0 was imposed in mid January 2021. Given that the vaccine roll out will take some time, the impact is likely to be in Q4 and 2022 rather than this year.

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