Luxury Tourism For The Jet-Set

14 August 2015

Under the Economic Transformation Programme (ETP) the Malaysian government has a long-term development strategy for the tourism industry to bring in RM168 billion in tourist revenue by the year 2020. With the goal of attracting bigger spenders to the country, in 2012 the Malaysian government formally launched ‘Luxury Malaysia’, the Tourism Ministry’s newest tourism brand that aims to rebrand the country as a luxury retail and holiday destination.

The Luxury Malaysia branding is used in tandem with the ‘Malaysia Truly Asia’ slogan currently used to market Malaysia around the world. It is primarily targeted at the high-income markets around the world with the goal of doubling tourism yield without doubling the total number of visitors to the country by providing tourists with a more affordable option for luxury items compared to other countries in the South East Asian region.

In recent years, Malaysia has attracted a number of luxury retail brands, high-end hotel brands and various industries looking to grow in the luxury market. Under the Luxury Malaysia campaign, initiatives have been put in place to further capitalise on this segment as the government believes that this trend has only just started in South East Asia and Malaysia, given its strategic location, favourable currency rate and infrastructure, a huge potential of being a luxury retail hub.

Under the ETP, the retail segment is expected to contribute about 35%, which is approximately RM58.8 billion to tourism yield by the year 2020. A number of initiatives designed to boost shopping revenues were implemented by the government, the main one being the abolishment of all import duties on a significant number of luxury items as an effort to promote Malaysia as a shopping destination. Since the announcement was made in 2011, an estimated 300 different types of items can now be purchased duty free in the country. Apparel, handbags, watches, shoes, perfumes and lingerie are just to name a few.

This initiative encouraged a steady stream of some of the world’s largest players in the luxury goods market entering the country. As of the end of 2012, a significant number of leading retail brands – including Prada, Giorgio Armani, Chanel, Cartier, Jimmy Choo, Burberry, Rolex and Louis Vuitton – have set up shop in Malaysia. All these brands can be found in a handful of massive, high-end shopping complexes in Kuala Lumpur.

To further encourage spending within this sector, the government has revved up efforts towards improving the infrastructure connecting the most popular shopping areas. In 2011, the government announced an allocation of RM50 million for upgraded, shaded walkways in Bukit Bintang, one of Kuala Lumpur’s busiest shopping areas. The government also built a 142-metre enclosed and air-conditioned walkway connecting Impiana Hotel and the Kuala Lumpur Convention Centre, which links to Suria KLCC. It also plans to eventually link up all the major shopping complexes in the Bukit Bintang shopping district, making it easier and more comfortable for shoppers to move from one shopping destination to another.

The country also hosts a variety of shopping festivals throughout the year, attracting thousands of shoppers from all over South East Asia. These include the Malaysia International Shoe Festival, the Malaysia Megasale Carnival, the Islamic Fashion Festival and the ‘A Journey through Time’ luxury watch and jewellery festival. The ‘A Journey Through Time’ is the largest luxury watch gathering in Asia that brings in collectors and enthusiasts from all over the world.

One of the objectives of the ETP was to establish three premium outlet shopping malls, which offered discounted luxury items and attracted more investment into Malaysia’s retail industry. The first mall was launched in 2011 in Johor Bahru, while two more are expected to be set up in Sepang and Penang.

The increasing number of lavish international hotels is a boon to the local tourism industry. (Photo credit to Tourism Malaysia)

The increasing number of lavish international hotels is a boon to the local tourism industry. (Photo credit to Tourism Malaysia)

Aside from being a shopper’s haven, Malaysia is also fast becoming a destination for high-end hotel brands and services. Many of the world’s most exclusive luxury hotel chains, including the Four Seasons, Mandarin Oriental, Grand Hyatt and most recently the St. Regis, have established their presence in Malaysia and are enjoying a steady business growth. According to the Malaysian Association of Hotels, a number of designer-owned and operator hotels are due to be launched, including Armani Hotel and Resorts, Bvlgari Hotels and Resorts and the even more oppulant Palazzo Versace.

To complement the burgeoning high-end hotel brands, the government announced in 2010 that it will be spending a total of RM85 million on the construction and refurbishment of hotels and resorts in remote areas of Malaysia in an effort to attract affluent visitors to these places.

The setting up of these luxury boutique hotels have drawn in tourists who follow these chains for their vacation stays and continue to come back as they are able to enjoy luxury at a relatively more affordable rate compared to establishments in the Europe or Americas. Malaysia’s tropical weather throughout the year also makes it the ideal holiday destination for tourists looking to escape the winters in their home countries.

The spa industry has become one of the focuses to promote luxury tourism. (Photo credit to Tourism Malaysia)

The spa industry has become one of the focuses to promote luxury tourism. (Photo credit to Tourism Malaysia)

Another initiative by the government to highlight Malaysia as a destination providing luxury services is to support and develop the spa industry. In 2011, Malaysia removed the ban on employing foreign spa and massage therapists for two years, in an effort to encourage spas to hire foreign staff and develop a sustainable training programme for local employees. The state also set up three training centres for local therapists and a National Spa Council to regulate the industry.

As a result, the past two years has seen an increase of tourists coming into the country to enjoy these relaxing services, which also include natural healing and cosmetic therapy.

The ETP also includes initiatives aimed at boosting the sporting and events tourism industry. In the past few years, Malaysia has built a reputation as a wonderful host for various prestigious golf tournaments as it is home to a number of international standard golf courses. Some of the high profile golf tournaments annually hosted in Malaysia in these recent years include the CIMB Asia Pacific Classic Malaysia (which is a tournament sanctioned by both the PGA Tour and the Asian Tour), the Maybank Malaysia Open and the Sime Darby Ladies PGA Tournament, which brings the top-listed female golf players to the country every year. These tournaments bring in a large amount of revenue in terms of ticket sales, brand ambassadorship and advertising, and according to data from the Malaysia Golf Tourism Association is only meeting 30% of its potential at the moment.

The grandeur Formula 1 Malaysia Grand Prix brings flocks of tourists at Sepang every year.

The grandeur Formula 1 Malaysia Grand Prix brings flocks of tourists at Sepang every year.

Another sporting event that brings in a large number of tourism revenue is the Formula 1 Malaysia Grand Prix, an annual event that sees an influx of tourists into Malaysia from all over the world. Every year, hotels and restaurants surrounding the Sepang race tracks will be booked up months ahead of the Grand Prix in anticipation of the event.

The government is also opening up and hosting more entertainment events such as the Contemporary Art Tourism Festival and the Future Music Festival Asia. Endorsed by Tourism Malaysia, the latter event has been dubbed as the largest music festival to hit the South East Asian shores, of which Malaysia is the only country to ever host the Future Music Festival outside of Australia. Both events bring in artists and performers from all over the world, and is placing the country on the map for having a growing performing arts and appreciation scene.

These policies put in place by the government to boost tourist spending in Malaysia, coupled with the existence of budget carriers like AirAsia and Firefly, the tropical weather in the country which makes travelling possible all year round, making Malaysia a perfect arena for those looking to enjoy the finer things in life, and sees the Malaysian government well towards achieving its ambitious aim of rebranding the country as a luxury holiday destination.

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