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August 11, 2008

Malaysia: Tourism target hit by high costs, limited budget

Malaysia will miss this year's target of 22.5 million tourist arrivals because of the higher cost of promotions, stiff competition from other destinations and domestic uncertainties, reported

local daily The New Straits Times on Monday.

Tourism Malaysia, a government agency to promote the industry, plans to seek a revision of the target set by the government, its senior official said.

The agency now expects that it will attract 21.5 million tourists this year, one million short of the initial target. Still, the figure will be three per cent higher than the 20.9 million arrivals last

year, instead of eight percent.

The shortfall of one million tourists is likely to cause some 2-billion ringgit loss in foreign receipts.

"It will be a challenge to reach the 22.5 million tourist arrival target," Tourism Malaysia director-general Mirza Taiyab said.

"We are preparing a paper to be sent to the government to request a review of the target set. A review is necessary," Mirza said, adding that a more realistic figure would be 21.5 million.

Mirza was responding to a query on whether Malaysia would meet its tourist arrival target as it had failed to attract even half the number in the first six months.

Malaysia needs 11.4 million visitors between July and December this year, or 1.92 million tourists each month, to reach the goal. In the first six months, the country welcomed 10.96 million


A limited budget is also making it tough for Tourism Malaysia to carry out promotional activities.

"We have reached saturation point. To go beyond what we are doing and to do things differently, we will need additional budget," Mirza said.

"We are seeking a little bit more from the government. We would like them to take into account inflation and loss of value from foreign exchange. The cost of buying media has

increased." He said that in the past 10 years, the cost of buying media space has risen 30 per cent. Tourism Malaysia's budget, however, with the exception of Visit Malaysia Year 2007, has remained

the same.

Its budget for this year is 484.7 million ringgit, including advertising (225 million ringgit), promotion (155 million ringgit), and salaries and office rentals (75.4 million ringgit).

It also has to contend with rising competition from other destinations. "These new destinations are promoting aggressively. We should do more (if we want to attract tourists to our

shores," Mirza said.

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