Taking tourism to the next level


From being one of Asia’s leading sun, sea and sand destinations in the 1960s and 1970s, Penang’s tourism industry seemed to wane in the 1990s, in the face of stiff regional competition. But it looks like the good times are back with George Town’s recent Unesco World Heritage listing and the boom in the budget airline industry. Several of Penang’s key tourism players tell the Penang Economic Monthly why they’re optimistic about the future.

Ooi Geok Ling: “It’s high time we stop promoting Penang primarily as a sun, sea and sand destination. We’re under-selling Penang if we resort to this old formula.”

Taking tourism to the next level

GETTING HOLD of Penang Global Tourism’s (PGT) new managing director Ooi Geok Ling is a challenge in itself. Getting through to her mobile is no problem; pinning her down in one location long enough to conduct an interview is another matter. Like an Energiser bunny, the woman just does not stop. When I finally managed to catch up with her on a public holiday, she had just spent the whole morning showing two travel writers around Penang.

To Ooi, being hands-on is all part of the job and, as she explained, taking on the role of tourist guide is something that came naturally to her. “When my father retired from teaching he brushed up on his Japanese and became a full-time tourist guide. Following him around, I realised what a passionate guide he was, he really knew his stuff and he was always bringing tourists home for cups of tea. I think they loved this personal touch and it made their time in Penang all the more memorable,” she reminisced.

After six months in the hot seat, Ooi is street-smart enough to know that she has a mountain to climb, given the turbulent “co-operation” between the state and federal governments. In the after-math of the 2008 general elections, the-then Tourism Minister Datuk Azalina Othman wasted little time sticking in the jackboot by hastily terminating tourism memorandums of understanding with Pakatan Rakyat-ruled state governments (which at the time included Perak, Penang, Selangor, Kedah and Kelantan). There were several repercussions for Penang; loss of federal funding meant that the largely successful World Music Festival was scrapped from the state’s tourism calendar. More crucially, when the funds dried up, the Penang Tourism Action Council (PTAC), which is largely responsible for promoting Penang internationally, also stopped functioning.

Effectively promoting Penang’s tourism has always been high on the agenda of various state governments as the industry makes a substantial contribution to the local GDP (although actual official figures have yet to be collated). It is estimated that tourism workers make up about 10% of Penang’s workforce. Prior to March 8, Penang’s tourism had been overseen from the lofty heights of Komtar’s 56th floor. Registering for a pass to that level meant either a visit to the state Exco office for Tourism, Arts and Culture, PTAC or Tourism Malaysia.

A shoemaker in Armenian Street.

As Ooi explained, “Many industry players attribute this to the hard work of Datuk Kee Phaik Cheen (a previous state Exco for Tourism, Arts and Culture). To her credit, she set up this very neat, streamlined arrangement which meant that all the agencies promoting Penang were working in synch and had direct channels of communication. PGT was set up to take over the role of PTAC and promote Penang internationally, regionally and locally.”

The challenge facing PGT is huge and the organisation has a tiny annual allocation of RM4mil (which goes towards marketing campaigns, promotional materials, tourism trade exhibitions and operational expenses). Despite this Ooi is optimistic. “Penang is a great tourism product that is known globally. What we have to do now is leverage on our recent World Heritage Status to effectively promote George Town and Penang. There is no need for us to reinvent the wheel.”

Her first step has been to ensure that PGT functions like a private sector organisation with clearly defined goals and objectives. “I want PGT to be proactive in pulling together Penang’s diverse tourism industry. We will act as a central point where ideas and information can be collated and effectively passed on. I think back to Datuk Kee’s time, when she used to attract a lot of flak for her ideas. Whether people agreed with them or not, she always had passion for her job. That is undeniable. I want PGT to have the same passion for Penang, I even regularly ‘sell’ Penang to my own staff to get them enthused so they can better sell to international industry players!” she said.

One of Ooi’s main goals is to build on George Town’s World Heritage Status. “It’s high time we stop promoting Penang primarily as a sun, sea and sand destination. We’re under-selling Penang if we resort to this old formula. We’ve been handed a gift with the Unesco listing; now we need to explore ways to capitalise on this in a responsible (sustainable), planned manner. George Town is a gem of a place because of its authencity so we have to be careful about making it tourist-friendly but not ‘touristy’.”

Ooi recounted a recent experience she had with a foreign journalist whom she took around Jalan Mesjid Kapitan Keling (known unofficially as the “Street of Harmony”). “After about half an hour into my tour, which took us past St George’s Church, the Kuan Yin temple, Mahamariamman temple and the Kapitan Keling mosque, the journalist turned to me and said, ‘Geok Ling, this is amazing! This is 1Malaysia in real life!’

“I thought to myself, this is how Penangites have lived for over 200 years. If I had to describe Penang as a dish, I think we’re just like rojak. All the individual fruits and veges retain their individualism, and the rojak sauce brings everything together. This is what makes Penang so unique, our diversity and our pride in being Penangites.”

On a more serious note, Ooi observed that the industry perception of Penang ranged from one out of 10, to 10 out of 10. “I’ve experienced some pretty extreme reactions from trade professionals who either love us or think we have a lot of work to do. I think the truth is somewhere inbetween. We have rested on our laurels for some time now; I’ve actually spoken to some younger industry professionals and travellers who have never even heard of Penang, but are aware of Langkawi and the various Thai islands. This wasn’t the case in the 1970s and 1980s – Penang was the place to visit in the Far East.”

Cheong Fatt Tze Mansion. Bottom: St George’s Church.

Ooi’s observation is shared by PGT director Marco Battistotti who is also chairman of the Malaysian Association of Hotels (Penang chapter) and the general manager of G Hotel. “MAH-P made a trip to Hong Kong in 2009 to promote Penang as a destination. It was interesting to observe how most people over 40 knew Penang but the younger generation didn’t even know where it was on the map,” he said.

Although Battistotti felt that industry perception of Penang is sorely lacking at regional and international levels, the island remains a popular tourist destination, he stressed. Michael Saxon, the general manager of Penang’s iconic E&O Hotel explained why: “Despite the fact that Penang’s tourism industry hasn’t come together as a cohesive force to promote it as a whole, we get plenty of repeat visitors, which says a lot about the island’s appeal.” According to Saxon, the current reality is that “while we have plenty of talented people within Penang’s tourism industry, most of the time they’re all doing their own thing. We need someone who brings together all the hoteliers, travel agents, tourist attraction operators to really push Penang!”

Battistotti believes three key factors are responsible for the resurgence in Penang’s tourism arrivals since the slump of the late 1990s. One is the rise (and rise) of budget airlines, which has brought an increasingly large number of independent travellers to the island. “Take the Penang - Singapore route, which has nine flights a day served by five airlines. Considering that there are close to one million Singaporeans with family ties in Penang, this is a large market we have direct access to.”

According to Battistotti, Penang International Airport is Malaysia’s most profitable airport. “As Asean’s middle class expands, people have a larger disposable income and are able to travel more often. Penang has strong regional air links with Thailand, Indonesia, Hong Kong and Singapore making it easier and easier for Asean tourists to come here.”

The recent redevelopment of the Swettenham Cruise Terminal has added an extra entry point to the island. In 2009, 680,000 cruise passengers stepped off in Penang. This year, the port expects 890,000 visitors. “The average cruise passenger spends anywhere between US$85 (RM280) to US$115 (RM350) a day when they come on land. That’s not bad considering they are in Penang for less than 12 hours. Penang’s the perfect destination for cruise passengers with limited time, the minute they step off the pier, they’re already in a World Heritage Site,” said Battistotti. The third factor that contributes to Penang’s robust tourism sector is Tourism Malaysia’s active ‘courtship’ of the Middle Eastern market.

“In 2009 Penang experienced an increase of 34,000 room nights from Middle Eastern visitors compared to 2008. After Kuala Lumpur and Genting Highlands, Penang is next on their ‘must-visit’ list.”

But what about the island’s much derided beaches, meter-less taxis and congested weekend traffic? These issues have been doing the rounds for decades and have frequently been highlighted in the local press as factors hindering Penang’s tourism potential.

Saxon looked like he was about to explode when I posed him the question. “Critics have been harping on these same issues for the six years I’ve been here. Are they saying there isn’t any dirt in Bali or Phuket, or that their traffic management is better than ours? Taxis in Bali don’t use meters either. I think a little chaos is just part of Penang’s character. Many island destinations in the region face the same challenges as Penang, I can’t deny that, but there is no point trying to change it into another Singapore – we’ll just lose our charm. We have to look at the positive aspects of Penang and market them without constantly dwelling on our weaknesses, which we don’t seem to be able to solve so easily.”

“ We’re never going to be a beach destination in the same league as the Seychelles or the Maldives. Then again, they don’t have what we have.”.

Ooi also felt that the state of Penang’s beaches had little bearing on its popularity as a holiday destination. “Even if we had crystal clear sea on our doorstep, think about the level of development Penang has achieved and all the traffic on the island. We’re never going to be a beach destination in the same league as the Seychelles or the Maldives. Then again, they don’t have what we have,” she stressed, “including our well-known Penang Hill and the lesser known National Park – both of which are our ‘green’ heritage . These two products have great potential and should be built upon.”

She does accept that regulating the illegal water sport operators along Batu Ferringhi’s beachfront is a priority and Battistotti agreed. “This free-for-all that tourists have to face with the watersports operators, many of whom aren’t fully recognised or insured, is not acceptable,” he said. “We need to regulate the operators to give our visitors a fun and safe experience.”

Marco Battistotti: In spite of industry perception, Penang is still a popular tourist destination.

Aside from attempting to improve Penang tourism’s physical infrastructure, Ooi is aware of the draw of Penang’s arts and culture. “One of my immediate tasks is to bring together the arts community in Penang and try to co-ordinate their performances and events so that both locals and tourists have a coherent idea of what is going on from month to month. Penang’s arts and culture are a real selling point and this ties in with my goal of cross-promoting Penang and other Malaysian destinations. Direct flights from Penang to Langkawi, Sarawak and Sabah make this highly possible. I want PGT to co-operate and build partnerships with other agencies. We are obviously limited by what we can do with our budget, so it will take effective, savvy networking to make this go further. What gives me plenty of optimism is the board of directors of PGT. The CM has selected a group of very knowledgeable, experienced industry experts and they are very open about sharing their opinions and ideas with me and my team. Their backing is really crucial to our success.”

Michael Saxon. “I think a little chaos is just part of Penang’s character.”

Penang-based cultural advocate, Joe Sidek believes that Penang’s tourism is finally moving in the right direction. ‘I really think that we have the right people in the right places now. There’s a very obvious change in attitude and there is a new energy about Penang. It’s great to see Khazanah and the World Heritage Office in Penang working hand in hand with various government agencies and the private sector. I believe that there is a great leeway for creativity in Penang,’ he enthused.

Ooi said building strong tourism links within Malaysia is another priority. “Although there are increasing direct international air links between Penang and the rest of the world we must capitalise on incoming tourists to Malaysia. Think about the numbers of MICE visitors to KL alone. If we can make a concerted effort to divert a fraction of these to Penang for pre- or post-conference R&R, we can really boost its tourism arrivals.”

Battistotti observed that Penang is well-positioned to be a MICE destination in its own right. “Close to 70% of global MICE events involve between 1,000 and 3,000 participants and Penang has facilities in place. An added advantage is the close ties between the island and the manufacturing industry which has been present here since the 1970s. There are so many big name MNCs in Penang, so naturally we are a preferred MICE destination for them.”

The other ties Ooi plans to rekindle are with George Town’s twin cities – Adelaide, Medan, Yokohama, and Xiamen. “I will need to understand more about the history of these relationships before reviving activities. Adelaide used to hold a Penang Week in Australia, while we held the South Australia Week here.”

She readily admitted that 2009 was all about getting PGT’s housekeeping in order and is positive that 2010 will be an important year. “We spent the latter part of 2009 identifying gaps and ways to plug them as well as building relationships with industry players locally and internationally. To me, building on Penang’s niches is crucial if we are to stand out globally. Why replicate what others are doing? Let’s do what we’re good at, and excel. We can gain a lot from complementing other cities or regions rather than trying to compete in areas where we have to start from scratch. We’re in the midst of finalising an exciting new campaign for Penang. I won’t give too much away at this point but it’s definitely going to have an impact and get people talking.”

Now that might just keep the critics quiet.

Talking heritage

Khoo Salma Nasution (pic), the new president of the Penang Heritage Trust (PHT) and local historian was all pragmatism as she discussed the implications of George Town’s Unesco listing for Penang’s tourism. “I think it’s fairly obvious that in the hierarchy of tourism offerings, the George Town World Heritage Site (whs) comes first. It puts Penang on the map instantly. The message should be in all our promotions. There is nothing at the airport or cruise ship terminal to say that there is a World Heritage Site in Penang. Putting up posters and tourism information at entry points would be a good start.”

Khoo believes that more effective partnerships need to be forged between the heritage enclave and the Batu Ferringhi tourist belt – where most of the island’s four- and five-star resorts are situated. “Tourists are looking for the best of both worlds. They can stay at the beach and still visit a historic city. Or stay in the World Heritage Site and spend a night at the beach. The travel industry can create packages that combine both.

“Ensuring George Town can maintain its whs status is a balancing act. On one hand we see a need for more hotel rooms in and around the heritage area, but height restrictions need to be followed. However, with the emergence of boutique hotels in George Town, the heritage areas are undergoing gentrification. It can be tricky making sure that we have a win-win situation for all involved.

“The tourism industry, especially hotels and inbound tour operators, can certainly do a lot more to help safeguard our living heritage. They need to plough some of their profits back into community and conservation. The real stakeholders such as craftsmen and artists who live in the heritage enclave should see some financial benefits. Heritage and cultural tourism have to be sustainable and viable in the long term,” Khoo stressed.

Penang tourism survey – an overview

PENANG'S TOURISM SECTOR has always been one of the key revenue generators for the state economy, yet the provision of dependable statistics and information in support of policy-formulation and service/infrastructural upgrades has always been a major challenge. This is due to the complications of disaggregating statistics relating to Penang tourism (such as visitor numbers, tourism services revenues, etc) from base numbers recorded for the national tourism sector.

How will data be captured?

In view of the information gaps and the need for credible statistical assessment indicators pertaining specifically to the Penang tourism sector, a series of Penang Tourism surveys were conducted in the years prior to 2007 by the Socio-Economic and Environmental Research Institute (SERI), utilising a standardised form given to a sample pool of respondents.

The previous surveys were framed under two major components:
Monthly Estimated Visitor Arrivals Survey (MEVS) The data come from respondents from selected Penang hotels, and from captured statistics pertaining to monthly guest numbers, the number of room nights sold, monthly revenues, nationality of guests, etc.
Visitor Profile Survey (VPS) Comments and feedback are captured via a questionnaire circulated among visitors to Penang, with survey forms released and completed by respondents “on-site” at tourist attractions in the state.

Data gleaned from VPS questionnaires and statistically significant samples (of hotel guest numbers) from MEVS feedback are then used to project “numbers” considered important to the industry, including indicators such as estimates of total visitor arrivals in Penang, projected growth trends in visitor arrivals, and the popularity of /comments on/criticism of tourist spots.

Projecting the arrival numbers of both international and domestic visitors is a significant exercise (as credible statistics are critical for the authorities to understand the trends and policy needs of Penang’s tourism sector). But it is fraught with challenges. Methods for assessment and projection, which are constantly reviewed, are needed to handle data that comprises “representative samples”.

Going online

With the need for sound statistical indicators to guide policy formulation and continuously improve Penang tourism and its related sectors, it was proposed that the Penang Tourism Survey be brought back and re-launched in 2010 after a hiatus of about two years. SERI will once again play a key role in coordinating the survey by designing and maintaining a web portal-based survey that utilises an upgraded online module for capturing information pertinent to tourism sector indicators.

The new 2010 Penang Tourism Survey will initially compile and retain the standard baseline indicators such as numbers of hotel guests, hotel revenues, average occupancy rates, estimated visitors arrivals in Penang, etc. But it will be expanded to incorporate new indicators as the need arises. The new online survey format is designed to be a value-added survey tool capable of capturing, synthesising and transmitting data and statistics in a more efficient manner. SERI and its commissioned experts will analyse the data to serve the information needs of Penang tourism’s key players, such as Penang Global Tourism, the hotel and hospitality industries, as well as other related services and sectors.

Experiencing new trends

As the number of flights into Penang, especially from Singapore, increases, its impact on tourism in the state is expected to be significant. Latest figures also confirm Penang’s strengths in attracting tourists from different countries.

INTERNATIONAL TOURIST ARRIVALS and departures at Penang International Airport showed unstable growth between 2007 and 2009, hovering around 30,000 to 45,000 per month (Chart 1). The contraction of the national economy at large by 1.7% in the last quarter of 2009 notwithstanding, the figure jumped to 53,000 in the same period.

This is all the more noteworthy given the fact that arrivals and departures typically peak in July and August, with April and September being the slow periods.

At the same time, the average hotel occupancy rate oscillated throughout 2009 (Chart 2). Beach hotels were highly in demand in the first quarter while city hotels were popular in the second and last quarters. On average, hotels were highly occupied in July. Interestingly, the hotel occupancy rate does not show any close correspondence to flight arrival trends.

With recent increases in the number of flights to and from Penang, inbound tourism has increased considerably. For 2009, visitors from Indonesia and Singapore made up over half of the total international tourist arrivals at Penang International Airport. About 36% flew in from Indonesia while 18% came from Changi Airport (Chart 3). Travellers from mainland China, Hong Kong and Macau together contributed about 6.5%. Other major disembarkation countries for Penang arrivals were Japan (5.2%), Taiwan (4.7%), Thailand (4.1%) and the United Kingdom (3.8%).

It is often noted that Penang’s tourism sector is the second largest contributor to its economy, after the manufacturing sector. This holds true at the national level as well, with tourism recording the second largest export income for Malaysia (after manufacturing), making up about seven per cent of the total.

Unfortunately, there are no official statistics that specify, in figures, the importance of Penang’s contribution to Malaysia’s tourism revenue. But given the jump in arrivals at Penang’s airport, that share is bound to increase.

Penang’s tourism sector is the second largest contributor to its economy.

Surprisingly, statistics show that visitors from Singapore, the largest group of arrivals for the country, seldom visit Penang. Chart 4 shows that although over half of the total international tourist arrivals in Malaysia are from Singapore, only 1.3% fly into Penang. While this may suggest that the Penang tourism industry has not been in the best of health, it must be remembered that arrivals by land are not included in these figures. At the same time, a considerably larger proportion of visitors from Indonesia (14%) and Japan (12.3%) do end up in Penang. While the presence of Japanese manufacturing plants in Penang may explain the large number of arrivals from Japan, it is the availability in Penang of education centres that explains the arrivals from Indonesia.

Furthermore, Indonesia was ranked first whilst Japan came fourth in tourist-generating markets (Table 1). At the national level, Indonesia and Japan came in second and 10th, respectively.

Richard Ho joined seri in 2008. His interests include reading, writing and history, which he feels are good reflectors of life and issues that matter.

Ong Wooi Leng is a research analyst at the Socio-Economic and Environmental Research Institute (seri).

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