On Christmas Day 2020, the Malaysian government launched the National Tourism Policy (NTP). This is a roadmap to support sustainable tourism development until 2030, aiming to help Malaysia become a favorite destination for tourists around the world.
One focus of this roadmap is “Smart Tourism 4.0”, which aims to use technology to innovate and enhance the travel experience. Innovative startups such as LokaLocal, Tourplus and Moovby are prominent in the program, working with authorities to make this a reality.
Although they are all in the tourism industry, each business segment of these three innovative startups is different. For example, LokaLocal is a platform connecting tourists and local travel partners, providing online tours. Tourplus is an online travel marketplace, ensuring safe transactions between tourists and tour guides. Meanwhile, Moovby is a car-sharing marketplace, allowing tourists to rent cars directly from locals - a good solution to overcome Malaysia's heavy traffic situation.
Tourism is Malaysia's third largest GDP contributor.
Despite the promising plans underway, Malaysia's tourism industry, like every other industry around the world, has been hit hard by the pandemic.
In 2019, tourism was Malaysia’s third-largest contributor to GDP, accounting for 15.9% of the value. However, the Covid-19 pandemic has severely affected the tourism industry. Data shows that the number of visitors in Malaysia in 2021 has dropped to just 130,000, compared to 26.10 million in 2019. Tourism revenue has also dropped from MYR86.1 billion to MYR240 million.
Malaysia hopes to see a recovery in tourism after the reopening, including its land border with Singapore. However, travel is still subject to strict procedures and regulations, as well as quarantine, which makes many tourists hesitant.
The slowdown in Malaysian tourism due to the pandemic has quickly made innovative travel tech startups realize that they have to adapt and create new products and collaborate with new parties.
For example, LokaLocal has partnered with InvestKL, an agency under the Ministry of Foreign Trade, to offer “on-the-spot” tourism solutions, or in other words, online tours. These tours allow visitors to “stroll” through famous locations, such as the Highland Cameron Butterfly Garden or the Gopeng Heritage House. LokaLocal is also offering incentives to entice visitors to take a closer look when tourism fully resumes.
Meanwhile, Tourplus is shifting its focus to domestic tourism. It has partnered with Tourism Selangor (Selangor’s official tourism promotion agency) in April 2022 to launch the Go Selangor app. The app offers travel, transportation, and food recommendations. Tourplus founder Rickson Goh said the partnership will help the tourism industry move towards digitalization 4.0, while also providing jobs for local tourism businesses, so they can be ready for the travel demand after Covid-19 is completely over.
Another segment of Smart Tourism 4.0 is eco-tourism.
Another segment of Smart Tourism 4.0 is ecotourism, which focuses on sustainable and responsible tourism solutions and types that help tourists enjoy new destinations while preserving Malaysia's natural heritage for future generations.
Although ecotourism is not a new concept, the more popular it becomes, the more conscious travel mindset among tourists is growing. Malaysia presented plans to promote ecotourism at Expo 2020 in Dubai, as well as opening up Langkawai Island, offering nature or community-based tourism packages.
With a long-term program like Smart Tourism 4.0, beliefs and doubts always appear in parallel.
In a study by Monitor Deloitte, smart tourism will help Malaysia's tourism revenue increase to US$110 billion by 2030, an increase of more than 340% compared to US$25 billion in 2018.
Some local and foreign tourists remain skeptical, however. A survey of students at the International Islamic University Malaysia found that they were worried that Malaysia’s poor internet infrastructure would make accessing travel apps difficult. In addition, tourists said the content on the apps was not comprehensive enough, such as not including information about less popular destinations.
However, Malaysia’s tourism industry is gradually coming back. Innovative travel technology startups are also attracting the attention of many investors. For example, Moovby received $500,000 from angel investors and strategic partners at the end of 2019. Tourplus also received $1 million from angel investors.
Additionally, Malaysia also introduced the Gamelan 2021 program, which provides grants of up to MYR 300,000 (US$68,000) to tourism-related companies, as a measure to promote domestic tourism.
So perhaps time should still be left to answer the question of whether Smart Tourism 4.0 can bring a new look and new value to Malaysian tourism.
