KUALA LUMPUR: The weakening of the ringgit has been a silver lining for Malaysia's tourism sector, making it one of the most affordable destinations for foreign visitors in the region.
Hong Leong Investment Bank Bhd (HLIB) head of research and equity research Jeremy Goh said while currency depreciation may have negative economic implications, it is proving to be a positive factor for the tourism sector.
"The ringgit's depreciation, making it one of the weakest currencies in the region year to date, has a positive impact on tourism as it makes everything more affordable for foreign tourists. Singapore, being our top source of tourists, further contributes to this advantage, considering the strength of the Singaporean dollar against the ringgit.
"In essence, while there may be negatives such as currency depreciation, they can be viewed as positives for the tourism sector," he told reporters at the 16th Bursa-HLIB Stratum Focus Series titled "Tourism: Welcoming A New Dawn" here today.
Additionally, Goh said Malaysia's relatively cheaper five-star accommodations compared to neighbouring countries such as Indonesia add to its appeal.
He added that overall, Malaysia's tourism sector has several advantages as it remains cost-effective for foreign visitors, especially from the US, where the currency exchange is favourable.
Goh said the country had attracted a total of 14 million international tourists from January to September this year.
However, a significant portion of the 14 million visitors in the first nine months does not include substantial contributions from Chinese tourists.
According to him, the delay in the return of Chinese tourists is not unique to Malaysia - it appears to be a widespread phenomenon affecting many other countries.
"One major contributing factor is the limited international flight capacity originating from China, currently at only 50 per cent to 60 per cent of the pre-pandemic level. This reduced capacity is a global issue, impacting various nations that were anticipating a resurgence in Chinese tourist arrivals.
"As international flight capacity from China gradually recovers, it is expected that Chinese tourist numbers will follow suit and contribute significantly to the overall tourism recovery," he noted.
Looking at the broader economic landscape, Goh said one sector poised to benefit substantially from a robust tourism recovery is the aviation sector.
He added that companies directly involved in airport operations and hospitality, such as those with stocks listed under airports, stand out as clear beneficiaries.
He said these sectors present potential investment opportunities, with stocks in airports and hotel-related businesses likely to experience positive outcomes as tourism continues to rebound.
Goh also noted that real estate investment trusts (REITs), such as Pavilion REIT and KLCC REIT, which attract a significant number of tourists, could present investment opportunities, especially if they continue to draw substantial footfall.
Meanwhile, Tourism Malaysia deputy director general (promotion) Datuk Musa Yusof said in the post-pandemic period, there is a trend of "revenge travel", where tourists prefer visiting multiple destinations during their holidays to make their travels worthwhile.
He highlighted that travelling in small groups or fully independent travellers (FITs) have also become an emerging trend since the pandemic.
"Tourists today also have an increased awareness of sustainable and responsible tourism practices, as they seek more meaningful and authentic experiences that can create a positive impact on the environment and the local communities," he said.
Musa said Tourism Malaysia will continue to foster smart partnerships and collaborations with both local and international industry players to further boost the demand for the country's tourism offerings.
He said focus on targeted and fast conversion markets will be heightened for more effective marketing, as well as the development of niche products and services such as Muslim-friendly tourism, medical tourism, sports, and our Malaysia My Second Home Programme (MM2H).
"Moving forward, our marketing and promotional efforts alongside our branding initiatives must be data-oriented in order to ensure maximum return and exposure," he noted.