Is Malaysia’s visa-free entry enough to entice ‘picky’ Chinese tourists as TikTok changes travel habits?

Tour agencies in Malaysia have reported a surge in interest from Chinese travellers following news of a 30-day visa-free entry announced by Prime Minister Anwar Ibrahim on November 26.

But tourism insiders and experts warn the government needs to broaden the country’s appeal if it wants to climb to the top of the list of competitive destinations.

Just four days since the policy came into effect, Penang state, Malaysia’s food haven, is already seeing an increase in arrivals from China, according to Uzaidi Udanis, chairman of the Consortium of Inbound Tourism Alliance.

Compared with large tour groups before the pandemic, he said operators had observed smaller groups and “spontaneous” travellers.

“There are more and more spontaneous travellers flying in for the weekends,” Uzaidi told This Week in Asia. “They are also more brave to try new things.”

This includes an uptick in tourists coming to Malaysia to hike and fish, instead of just for golf, one of the more popular activities closely associated with Chinese tourists.

Since Friday, Chinese and Indian tourists have been able to enter the Southeast Asian nation without a visa for 30 days, as part of Malaysia’s bid to scoop up market share from neighbouring Thailand and revive its pandemic-battered tourist businesses as high season begins in earnest.

To get ahead of the expected demand, Malaysia-based regional budget airline AirAsia has said it will add nearly 25 per cent more flights to and from China, starting from the first quarter of 2024, translating into an extra 5.2 million seats per year.

Tour operator Albert Loh told This Week in Asia his company usually “received an average of three to five inquiries a week. But now we have 61 groups asking about our packages for this week alone”.

Loh said his company, which specialises in tour packages for Chinese tourists in Sabah state in Malaysian Borneo, handled around 5,000 clients in the year to November 30, down at least 30 per cent from the volume they used to manage in 2019 before Covid-19 hit.

Visa-free access to Malaysia could potentially boost his business by at least 50 per cent, Loh added, based on the spike in interest over the past week alone.

Unique experiences

But to clamber above regional rivals such as Thailand and Indonesia’s Bali, Malaysia needs to promote distinctly local experiences across culture, eco-tourism and wellness, besides making it clear that it is safe to visit, Angeline Tan, a researcher with think tank ISIS Malaysia.

“The pandemic has made the world seem like a scary place and this affects the traveller’s mentality and decision-making,” she said.

Thailand’s own visa-free offer to Chinese tourists has fallen flat so far, with many reportedly frightened off by stories of Chinese kidnap gangs targeting visitors as well as the ongoing scam saga in the Mekong region, which has dragged in tens of thousands of unwilling Chinese workers.

Equally, social media has curated a more dynamic, curious and expectant tourist, with clients doing their own research pre-departure via TikTok or Douyin – the Chinese version of the popular micro-video blog – before deciding on what they want to do.

“[Before the pandemic] they were not picky. They would just spend and eat,” Loh said. “What happens now is they will spend only after some research, and they believe in what posts on TikTok, Douyin or other social media would recommend.”

Nigel Wong, the president of Malaysian Association of Tour and Travel Agents, said that while it was still too early to put any figure to it yet, he was optimistic that tourists from China would deliver the shot in the arm the sector needed.

“It will definitely pick up,” Wong told This Week in Asia.

Will Chinese spend?

But surging inquiries alone don’t bring in the tourist dollars.

Questions remain over whether the lure of island-hopping, five-star golfing destinations and Malaysia’s famed food scene would be enough to convince Chinese tours to return in serious numbers, especially as many tourism-related businesses on islands and remote parts where the best beaches are have fallen victim to the pandemic.

Analysts expect the volume of Chinese tourists may not rebound as much as hoped, with their spending power likely diminished due in large part to China’s slow economic recovery from the pandemic.

China’s Bureau of Statistics reported in June that youth unemployment hit a record high of 21.3 per cent. The International Monetary Fund projected China’s economic growth at 5.4 per cent in 2023 before slowing to 4.6 per cent on persistent weakness in its property sector and the projected subdued demand for its exports.

“With rising costs and a daunting economic outlook, the Chinese may not even choose to spend on travel,” Tan said.

Echoing similar sentiments on China’s internal difficulties, Collins Chong Yew Keat at Universiti Malaya in Kuala Lumpur was also critical of the visa-exemption incentive, saying the Malaysian government’s plan to reform the economic landscape was “missing the picture” and a middle-income trap.

“It prolongs the trap of the country in the continuous overdependence on China as the easiest low-hanging fruit in short term gains in tourism and capital,” he said.

Instead, Chong said that visa-free entry should only be prioritised for legitimate and strategic investment, and in attracting top talent and human capital in targeted sectors that would not pose a direct competition and risks to Malaysia’s economic and security interests.