Issue #72 - Malaysia’s Reopening is More Complex Than Headline Writers Realise
Issue #72 - Malaysia’s Reopening is More Complex Than Headline Writers Realise
Several overlapping factors make Malaysia's travel reboot a tricky balancing act.
Welcome to issue 72 of Asia Travel Re:Set…
South East Asia’s travel recovery remains a formative patchwork.
Genuine momentum was building in October and November. Then came Omicron.
The current wave is surging. On Saturday, the 10 ASEAN countries recorded over 900,000 active cases for the first time since September. That figure increased from 700,000 last Sunday.
Thus far, governments appear to be relying on vaccine rates and home-testing rather than pressing the lockdown button.
And travel activity is starting to rebuild.
This week, the Philippines reopened its airport gates after two years, while Thailand mystifyingly talked up travel bubbles with China (!), India and Malaysia despite restarting its Test & Go entry scheme for vaccinated all-comers.
But the week’s most revealing story was in Malaysia, where the debate about retooling travel to revitalise the economy became enmeshed in misleading media stories.
Malaysia’s reopening is complex, and deserves deeper analysis than the ‘trigger’ headlines that circulated the globe in midweek.
Thanks for being on board,
Gary
The Sunday Itinerary
- This Week’s Top 5
Updates from Australia, the Philippines, Indonesia, Vietnam, Thailand
- Malaysia’s Reopening is More Complex Than Headline Writers Realise
Several overlapping factors make Malaysia's travel reboot a tricky balancing act
This Week’s Top 5
Updates from Australia, the Philippines, Indonesia, Vietnam, Thailand
A combination of angst and anticipation as Australia (minus Western Australia) prepares to open its borders to vaccinated travellers on 21 February.
“All systems go” according to the Department of Tourism as the Philippines kicks open its airport gates to vaccinated visitors from visa-free countries.
Two cruise ships are being commissioned to accommodate visitors to the debut Indonesia Moto GP at Lombok’s new Mandalika circuit from 18-20 March.
Vietnam’s Ministry of Culture, Sports & Tourism wants to resume visa waivers for vaccinated visitors from 24 countries when inbound tourism restarts.
In wholly unsurprising news, Thailand is starting to walk back on collecting a new THB300 Tourism Fee from all visitors in April. A delay seems inevitable.
The South East Asia Travel Show launches a new 8-part series called Two Years of Travel Disruption. Over the coming weeks, we’ll produce a series of shows with the help of regional experts to assess the changes delivered by the pandemic, signposted changes up ahead – and changes that should, but probably won’t, happen. To kick things off, we discuss a 15-point list of shifts in travel and tourism since March 2020.
Listen here:
🎧 Website 🎧 Spotify 🎧 Apple
Malaysia’s Reopening is More Complex than Headline Writers Realise
Several overlapping factors make Malaysia's travel reboot a tricky balancing act.
“As of today, our borders are still closed - there’s no discussion yet to reopen.”
How do you square the above headline (Tuesday) with this quote from Malaysian Prime Minister Ismail Sabri (Friday)?
You can’t. There are two reasons for this.
Firstly, the headline writers asserting that Malaysia is ready to reopen jumped the gun.
Secondly, the Prime Minister is deliberately flat-batting to diffuse the issue until the various departments of a coalition government can align on a decision.
Malaysia’s reopening situation is highly complex and, as elsewhere, layered with economics, politics and a society still coming to terms with the past 2 years.
I live in Malaysia, and the people are scarred emotionally by COVID-19. They have endured long periods of lockdown, movement restrictions and - in 2021 - 8 months without being able to travel domestically. The borders closed in mid-March 2020.
Despite counting (by some distance) South East Asia’s 6th-largest population, Malaysia has the 3rd highest total of COVID-19 cases (3 million+), and 4th-highest death toll (32,000+).
A high degree of fear about COVID-19 still exists, heightened by the Omicron wave.
So let’s walk back a little…
On Tuesday, Malaysia’s COVID-19 National Recovery Council (NRC), an advisory board chaired by deposed former Prime Minister Muhyiddin Yassin, publicly proposed to the coalition government that Malaysia should reopen its borders “as early as 1 March.”
The NRC recommended lifting the existing on-arrival quarantine requirement for all travellers, and instead rely on pre-flight and on-arrival testing for vaccinated visitors.
Mr Yassin set out the business case for reopening. Speaking to the media, he explained carefully the NRC’s recommended next steps.
Headline writers subsequently turned this into “Malaysia agrees to reopen in March.”
It is fair to say the Malaysian government was displeased with this turn of events.
There are 5 overlapping points to consider carefully…
Last November, the NRC proposed that Malaysia’s borders should reopen “by 1 January 2022.” This was dismissed by the government as Omicron emerged.
Malaysia has a highly vaccinated and boosted population, but the Omicron wave is cresting following the Chinese New Year holidays. On Saturday, 22,802 new cases were recorded - the highest figure since the dark Delta days of August 2021. Hospitalisations and critical cases are lower than at that time.
Malaysia is preparing to hold a sensitive, but strategically important, state election in the southern state of Johor on 12 March. Opposition parties are calling for a postponement until the current Omicron wave subsides.
This will be followed, maybe later this year, by a national election. Since the last election in May 2018, the government (and Prime Minister) has changed twice.
And crucially:
Malaysia is targeting 5.5-6.5% GDP growth in 2022. That goal would be unobtainable without a significant contribution from the travel sector.
Malaysia’s travel recovery cannot start soon enough…
The nation’s travel industry has been decimated by COVID-19.
In 2020, the Ministry of Tourism, Arts & Culture estimated Malaysia lost MYR135 billion in tourism expenditure. That figure was projected at MYR165 billion in 2021.
A domestic travel recovery started in Q4 of 2021, and is expected to expand in 2022 - but two-way international travel is vital to stimulate the economy - and reduce unemployment.
This week, CGS-CIMB projected:
Domestic passenger traffic in 2022 to recover to 70% of the 2019 total, up from 18% in 2021.
International passenger movements in 2022 to reach 25% compared to 2019, up from just 2.6% in 2021.
Last month, Malaysia began selling tickets for flights and cross-border buses to Singapore as the bilateral Vaccinated Travel Lane (VTL) was restored following a one-month suspension in late December. Also in December, Malaysia and Indonesia discussed opening a bilateral VTL, but no timeline was set.
During the recent X-Change Malaysia conference (in which I participated), a representative of the national carrier Malaysia Airlines said it had provided a list of recommended VTL markets to the government.
However, with other South East Asian nations, notably Cambodia, Thailand, Philippines and Laos (and potentially Vietnam), eschewing the Singapore-style VTL approach for a broader border reopening, Malaysia could follow suit.
So, what happens next…?
Once the current Omicron surge stabilises, Malaysia will reopen its borders. This is likely to be in the not-too-distant future.
It is not yet clear when or how this will happen - but the government is aware of its ticking GDP clock, and the strides that neighbouring nations are making, or preparing to take.
Entering Q2 with its borders still closed isn’t economically appealing - especially as domestic travel started to rebound in late 2021 and the cash-strapped airlines are lobbying hard for transformative action on international travel.
In the same interview as quoted at the top of the article, Prime Minister Ismail Sabri acknowledged that Malaysia’s tourism sector has been pushed to the precipice:
“I have friends in the Tourism Ministry friends who say they cannot survive, tour drivers who depend on income gained from ferrying travellers. Now, there are no tourists, they cannot survive.”
Meanwhile, he stressed once again a need to protect the healthcare system:
“Yes, it’s true we want to reopen the borders because we want to assist the tourism industry, but we also want to protect the health of Malaysians.”
As local newspaper The Star headlined on Sunday, Keeping that balance between recovery and protection will challenge a government that currently has no electoral mandate - and is working to achieve one in the coming months.
Watch this space.
The prolonged closure of Bali has been a global case study for the 2-year shutdown of travel in South East Asia. As it slowly reopens, I chat to Bali-based Stuart McDonald, Founder of Travelfish. Stuart describes what has changed across Bali, including popular destinations like Canggu, Ubud and Kuta. He also talks about what he discovered on a recent trip to Flores, including development in Labuan Bajo - one of Indonesia’s 5 Super Priority destinations - and changes at Komodo National Park.
Listen here:
🎧 Website 🎧 Spotify 🎧 Apple
And, that’s a wrap for Issue 72.
Until next Sunday, find me on Twitter, LinkedIn, the Asia Travel Re:Set website and The South East Asia Travel Show - where this week we’ll be chatting to Singapore-based Karen Yue, Group Editor of TTG Asia.
Have a great week.
Gary