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Hospitality
Sub-sector
Global tourism made a strong recovery in the first half of 2022, with tourist arrivals nearly tripling between January and July compared to the same period globally, according to the United Nations World Tourism Organisation (UNWTO). Around 474 million tourists travelled internationally during this time, up from 175 million in the same months of 2021, marking an almost 60% recovery from pre-pandemic levels.
In Malaysia, the Ministry of Tourism, Arts, and Culture (MOTAC) foresees a two to three-year timeline for international tourist arrivals to return to pre-pandemic levels. This duration allows for a full recovery, assuming resources remain accessible./p>
The Government also introduced a ten-year transformation plan, the National Tourism Policy (NTP) 2020 – 2030, aiming to position Malaysia in the top ten tourist destinations for both arrivals and receipts. Embracing Smart Tourism is a pivotal strategy for sustained competitiveness.
Tourists enjoy the unique culture, food, and biodiversity of Malaysia, with its well-established infrastructure serving a wide range of travellers. For travel advice and business information in Malaysia, visit mysafetravel.gov.my.
For more statistics, please click here.
Tourism Recovery Framework (TRF) 2.0 (2022 to 2024)
MOTAC introduced the Tourism Recovery Framework (TRF) 2.0 on June 21, 2022, to fortify and renew the tourism industry. This framework highlights five key strategies, including enhancing tourism and cultural offerings and promoting sustainable, inclusive tourism activities.
Tourist arrivals in Malaysia have exceeded expectations, leading to multiple upward revisions of forecasts. The country is expected to receive 10 million international tourists this year, with tourism receipts estimated at RM26.8 billion. The positive outlook can be attributed to the relaxed conditions for tourist arrivals, which have made Malaysia a hassle-free destination for travelers.
The ringgit’s affordability Is expected to draw more inbound tourists and bolster the economy through foreign currency influx. Malaysia has always been a budget-friendly tourist spot, and with goods and services becoming even more affordable, this trend is likely to continue. Additionally, business tourism will benefit from the lower costs of hosting events such as conferences and trade shows.
Malaysia’s attractive exchange rate is expected to boost tourism for leisure and business. This is likely to strengthen the economy as Malaysia has always been an affordable destination. Goods and services are now even more affordable, benefiting both inbound tourists and business. Hosting conferences and trade shows will also be more affordable, increasing international participation. The government is aiming for hospital revenues from medical tourism to reach RM1.2 billion this year and RM2.4 billion in 2025, according to the Malaysia Healthcare Travel Council (MHTC).
Tourism investments have not kept up with global trends despite an increase in passenger traffic and international travel. Operators are focused on replenishing existing capacity in developed markets and re-evaluating risk exposure in developing economies.
In 2021, 256 tourism projects worth approximately US$9.5 billion (RM45.07 billion) were announced, an 8% decrease compared to the 271 projects worth US$17 billion (RM80.65 billion) announced in 2020.
The National Tourism Policy (NTP) 2020-2030 aims for sustainable and responsible tourism through practices like using solar panels, water-saving, natural materials, and native plants in landscaping. MIDA continues to support these efforts.
Hotels
1 & 2 Star : 100% Malaysian
3 Star : At Least 30% Malaysian
4 & 5 Star : No Equity Restriction
Theme Parks
No Equity Restriction
Convention Centres
No Equity Restriction
Recreational Parks / Other Tourism Projects
At least 49% Malaysian including 30% reserved
New projects involving these promoted activities within the tourism industry are eligible for incentives:
Theme Parks
Convention Centres
Recreational Parks
Hotels (1- 3 Star)
Other Tourism Projects
To boost investor interest, the Government provides tax incentives for tourism projects including hotels, theme parks, convention centres, recreational parks and other tourism projects.
Pioneer Status (PS)
Companies may benefit from Pioneer Status of 70% of the statutory income for each year of assessment of its business operations.
OR
Investment Tax Allowance (ITA)
Companies may benefit from income tax exemption package of 60% allowance on the qualifying capital expenditure incurred within a period of 5 years where the allowance can be used to offset against 70% of the statutory income for each year of assessment of its business operations.
Expansion, modernisation and refurbishment projects for the following establishments are eligible for incentives:
Hotels (1-5 Star)
Theme Parks
Other Tourism Projects
To strengthen the competitiveness of the tourism industry, the Government provides tax incentives for the expansion, modernisation and refurbishment of hotels, theme parks and other tourism projects.
Investment Tax Allowance (ITA)
Companies may benefit from income tax exemption package of 60% allowance on the qualifying capital expenditure incurred within a period of 5 years where the allowance can be used to offset against 70% of the statutory income for each year of assessment of its business operations.
