Tourism & Travel Related Services

This sector is one of the most dynamic economic services sectors, in terms of contributing to GDP, employment and generating foreign exchange.

An interesting aspect of this sector is the presence of cross – border movement of consumers, especially with the emergence of ‘new' tourist destinations, mostly in developing countries. This sector  is labour-intensive and is invariably linked to many sectors of the economy, such as education and health, thus making this sector a vibrant one.

Under the 10th Malaysia Plan (10MP), tourism is targeted to:

  • position Malaysia in the top 10 in terms of  global tourism receipts;
  • increase the sector's contribution by 2.1 times, contributing RM115 billion in receipts; and
  • provide 2 million jobs in 2015.

The focus will be on attracting a larger share of high –end travellers and on capturing a higher share of the high - traffic segments, particularly from Russia, India, China and Middle East.

This sector has been earmarked  for development and promotion, and the potential growth areas for the development of the SMEs are

  1. Hotels;
  2. Transportation;
  3. Eco-tourism;
  4. Agro tourism;
  5. Health Tourism ;and
  6. Edu tourism

The WTO classification covers :

  • Hotels and restaurants ( including catering );
  • Travel agencies and tour operators' services; and
  • Tour guides' services.

 

What a service provider needs to know

As a service provider of this sector, you may be interested in the following :

  • The relevant Acts that govern these services;
  • The Regulatory agency/agencies;
  • The liberalisation initiatives and specific service sector commitments that Malaysia has entered into.

The Acts

  • Tourism Industry Act 1992;
  • Malaysia Tourism Promotion Board Act 1992; and
  • Tourist Vehicles Licensing Act 1999

Regulatory Agencies

  • Ministry of Tourism (MOTOUR)
  • Malaysia Tourism Promotion Board (MTPB);
  • Islamic Tourism Centre (ITC);
  • Malaysian Association of Hotels (MAH);
  • Malaysian Association of Hotel Owners (MAHO);
  • Malaysian Association of Tour and Travel Agents (MATTA);
  • Malaysia Budget Hotel Association (MBSA); and
  • Malaysian Chinese Tourism Association (MCTA).

 

Liberalisation initiatives

In 2009, six sub-sectors  were liberalised to allow 100 per cent foreign equity participation:

  • Theme Parks;
  • Convention and Exhibition Centres (seating capacity of above 5,000);
  • Travel Agencies and Tour Operators Services (for inbound travel only);
  • Hotel and Restaurant services (4 and 5 star hotels only);
  • Food Serving Services (4 and 5 star hotels only); and
  • Beverage Serving Services for consumption on the premises (4 and 5 star hotels only).

 

Specific service commitments

Under GATS, market access for Hotels and Restaurants (for 4 and 5 star hotels only) is only through a locally incorporated joint-venture corporation with Malaysian individuals or Malaysian-controlled corporations with foreign shareholding not exceeding 30 per cent.

Under AFAS, the same applies except that the  aggregate foreign shareholding in the joint venture corporation is up to 70 per cent. Commitments are also made for tourist guides ( Mode 4 ) where a temporary tourist guide licence is needed and this is subject to:

  • passing the basic tourist guide course;
  • attending an  induction course and a language proficiency programme and have knowledge on Malaysia;
  • receiving a working contract (full time) with any travel agency in Malaysia;
  • having  valid passport; and
  • becoming a member of any tourist guide association approved by Ministry of Tourism.

 

Malaysia has made bilateral commitments with the following countries :

 

  • Japan ( MJEPA )

 - hotel and restaurant services (4 and 5 star hotels only ) with foreign equity not exceeding 30 per cent;

 - Hotel lodging services (4 and 5 star hotels only ) with foreign equity not exceeding 35 per cent; and

 - Travel agency and tour operator services with foreign equity not exceeding 30 per cent.

  • New Zealand ( MNZFTA ) and Pakistan ( MPCEPA )

- hotel and restaurant services (4 and 5 star hotels only ) with foreign equity not exceeding 49 per cent;

- travel agency and tour operator services with foreign equity not exceeding 49 per cent;

- convention and exhibition management services with foreign equity not exceeding 49 per cent; and

- theme park with  foreign equity not exceeding 49 per cent;

  • India ( MICECA )

- hotel and restaurant services (4 and 5 star hotels only ) with foreign equity up to 100 per cent;

- travel agency and tour operator services with foreign equity up to 100 per cent;

- convention and exhibition management services with foreign equity up to 100 per cent; and

- theme park with  foreign equity up to 100 per cent.

Regionally, Malaysia has made commitments with countries :

  • ASEAN – China ( ACFTA )

- convention and exhibition management services with foreign equity up to 100 per cent; and

- theme park with  foreign equity up to 100 per cent.

  • ASEAN – Australia – New Zealand ( AANZFTA)

- hotel and restaurant services (4 and 5 star hotels only ) with foreign equity not exceeding 49 per cent;

- travel agency and tour operator services with foreign equity not exceeding 49 per cent;

- theme park with  foreign equity not exceeding 49 per cent;

  • ASEAN – Korea ( AKFTA )

- hotel and restaurant services (4 and 5 star hotels only ) with foreign equity not exceeding 35 per cent;

- travel agency and tour operator services with foreign equity not exceeding 35 per cent;

- convention and exhibition management services with foreign equity not exceeding 35 per cent; and

- theme park with  foreign equity not exceeding 35 per cent;

 

For further information, please contact:

  • Ms. Hamdiah Ismail
    Policy Planning and international Affairs Division
    Phone No : 03-8891 7377
    Fax No: 03-8891 7100
    Email : hamdiah@motour.gov.my
  •  
  • Ms. Zarina Md Yusuf
    Policy Planning and international Affairs Division
    Phone No : 03-8891 7516
    Fax No: 03-8891 7100
    Email : zarina@motour.gov.my