The Paradox of Tourism Growth in Post-Covid Penang

By Vikneswaran Nair

November 2022 COVER STORY
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THE OUTBREAK OF Covid-19 exposed the Visit Malaysia 2020 campaign to significant risks. Three months into 2020, it was cancelled. Subsequent prohibitions on mobility and travel during the four phases of the Movement Control Order (MCO) further contracted the tourism industry in Malaysia and globally.

The negative impact on airlines and hotel businesses appears to have recoiled the industry by three decades. So, is that all bad news? What is the silver lining in this experience? How do we adapt favourably to the change? 

For many, it is an opportunity to move away from the "business-as-usual" mindset towards a rethink about responsible tourism. As Malaysia adapts to a new normal, we must expect to face dilemmas. In tourism, growth and sustainability remain a paradox.

Indeed, tourism creates employment. During the pre-Covid era, one in 10 jobs worldwide and one in four of all newly created jobs were in the rapidly growing tourism sector. Tourism has been providing incredible economic boosts to host communities; if managed well, tourism alleviates poverty and raises a community's economic status. Furthermore, tourism can be a catalyst, driving the conservation and protection of natural environments and cultural heritage.

If expanding the tourism industry creates more jobs and significant economic opportunities, why are there more and more destinations limiting or restricting tourist activities?

Sabah's Sipadan Island is one of the best diving destinations in the world. The protected area has a cap of 176 divers per day to prevent excess stress the reefs and marine life. Some countries, like Bhutan, impose strict travel requirements to encourage responsible tourism. Bhutan prohibits independent tourists in order to prevent disturbances in the daily life of its people. Bhutan's focus has always been on tourism quality rather than on quantity.

View of Paro Valley, Bhutan.

Similarly, destinations like Machu Picchu and cities like Amsterdam, Barcelona, Venice, Seychelles and many others are curtailing large-scale tourism. There have been many debates and discussions about carrying capacity, the limit of acceptable change, over-tourism, regenerative tourism and responsible tourism.   

But why are there still so many destinations more focused on the number of international arrivals rather than yield per visitor? This challenging situation can be seen in The Bahamas and many other Caribbean countries, which over-rely on cruise tourism. Pre-Covid-19, 75 percent of visitors came to The Bahamas via cruise but only contributed 11 percent to the total spending by foreign visitors. According to The Bahamas Ministry of Tourism, 40 percent of cruise tourists spend an average of less than USD50 each.[1]

Over-tourism lessons from Boracay Island in the Philippines show what apathy can do to a world-class tourism destination. Boracay hosted over two million tourists in 2017, with a ratio of 66 tourists to every resident. The island became a cesspool; it then shut its doors to visitors from February to October 2018, rolling out a massive clean-up and a reorganisation of the stakeholders' roles.

Tourists relaxing on the paradise shore of the White Beach in Boracay, Philippines. The island shut its doors to visitors from February to October 2018, rolling out a massive clean-up and a reorganisation of the stakeholders’ roles. Photo by: dovidovicd ©

Tourism – To Extract or Steward?

The question needs to be answered: How do we weigh economic gains against environmental degradation? This lies at the basis of what is known as the three pillars of sustainability – economic viability, environmental protection and social equity.

Have our perspectives changed during this pandemic? Have we learned lessons from past mistakes? Or are we continuing from where we left off?

Most destinations, including Malaysia (and Penang), are implementing new strategies to attract more visitors to stay longer and spend more. The key question is, are we still focusing on volume rather than the concrete benefits that each visitor brings to the local economy?

Leakages are one of the most significant issues in destinations where the local community does not get the reasonable advantage from every tourist dollar spent. UN Atlas of the Oceans has shown that as little as five to 10 percent of the amount a tourist spends remains in the destination.[2] To remedy  this, an inclusive approach is required, where there is collaboration between the public and private sectors and the host communities. Furthermore, local capacity development is vital to support the full breadth of the industry from the ground up.

One school of thought argues that tourism cannot be truly sustainable. So, is tourism an extractive or stewardship industry? Let us take cruise tourism as an example. Penang is primed for a tourism rebound with the arrival of more cruise ships at the Swettenham Pier Cruise Terminal (SPCT). A group of cruise tourists that flocks at a particular location for a specific period is often viewed as an extractive experience by many locals, as the visitors hastily seek to extract whatever experience that is unique to the destination. Indeed, some local businesses will reap substantially from these groups of visitors, while others may just feel a loss in private space and comfort.

Photo by: igorspb ©

On the other hand, in the stewardship approach, local communities, governmental agencies, NGOs and the tourism industry take a multi-stakeholder approach to maintain their destination's cultural, environmental, economic and aesthetic integrity. Sierra Gorda, Mexico's hidden garden, has an inspiring stewardship success story. This destination provides an authentic experience that includes flavourful food and drink, and lush and healthy natural areas. The destination offers adventures from zip-lining and spelunking to hiking and rock climbing. All the stakeholders at Sierra Gorda maintain the historic missions provided in the village streets and locally run businesses and workshops amid steep, eye-grabbing mountain scenery, much of it still clad in the voluntarily preserved forest. The destination has preserved the qualities that make a place, first and foremost, a wonderful place to live, with the added benefit of being a wonderful place to visit. In short, a healthy and happy community is needed to support a healthy and happy tourism industry in the long term.

Outlook for Penang

So, how can Penang adopt the stewardship approach? To start the process, Penang can form a Destination Stewardship Council. The planning team should consist of a local champion or a leadership team who can move the process along and who is committed to its success. The Council can then identify the initial geographic boundaries (unifying geographic or cultural elements in line with Penang's tourism ecosystem, for example).

Next, it should take stock of the island's capacity by looking into the capabilities and gaps of those involved in tourism – in terms of skills and knowledge related to tourism, destination management, sustainability, responsible project design, development and fundraising.

Finally, it should determine the organisational structure of the Council vis-a-vis the existing tourism management organisation. Then, data collection can proceed in an informed manner. It should cover tourism stakeholder mapping involving the public, private and civil sectors, not forgetting marginalised communities often left out of the planning process. Continuous tourist or visitor and resident surveys of satisfaction, enthusiasm and use can also be done. Once this is settled, the success metric for the destination, which includes strategies and action plans, can be defined.

Penang Hill funicular train.

That said, the key question remains to be considered: can tourism ever be sustainable? The negative environmental impact inherent to this industry is broad – increased carbon dioxide emission, waste generation, high use of water and energy, degradation of ecosystems and generation of artificial landscapes and infrastructure.

Nonetheless, the industry is not all bad. If tourism development is well-executed, responsible and rejuvenated, the destination can flourish economically. Jobs created through tourism development should be more than just catering to entry-level positions with limited opportunities for upward mobility. The travel industry is evolving post-Covid-19, and what opportunities this offers to tourism sustainability should be contemplated. New jobs include travel bloggers, online travel agents, influencer marketers, smart technology developers, niche tourism consultants, sustainability consultants, ancillary revenue managers and new-age cabin crew. 

For Penang, its strategic response to tourism can no longer remain fragmented.

Post-pandemic, chances are that it is only destinations that have innovated or transformed their operations to accommodate the new norms that will reap the benefits. Signs point to the likelihood that visitors will be more interested in extended stays rather than in short visits to explore more sites or destinations. Current trends indicate that visitors will stay at a safe destination much longer when compared to during the pre-pandemic period.

Domestic tourism, which includes the exploring of regional parks, ecotourism sites, road trips and staycations, may be the beginning of a new norm for travellers. It will expand to vaccinated international travellers who wish to feel confident in the safety and health protocols put in place. Outdoor family cluster activities, including private vacation rentals and open-air activities (horse riding, hiking, kayaking, trekking, scuba diving and snorkelling), will be key attractions determining their destination choices.

Chew Jetty. Photo by: tsyew ©

Given this trend, Penang is well positioned to benefit. Community-based tourism in rural Penang will fit in well. Remote places that are off-the-beaten-track, close to nature and uncrowded will be a favourite choice. In short, sustainable and responsible tourism is about to go mainstream. With good local planning, these destinations can combat the adverse effects of tourism and improve the community's well-being while protecting the environment and providing visitors with authentic experiences.

To be sure, the pursuit of sustainable tourism at many Penang destinations is replete with many small players, organisations, agencies and individual consultants. However, they are trying to transform the industry in an uncoordinated or knee-jerk fashion rather than through organisation-wide commitments, strategies and actions that integrate sustainability into their operational DNA.

Large-scale tourism is bound to attract positive and negative views from the residents and visitors. What is critical in all tourism development is that the standard of life for the residents, the growth of local entrepreneurship and the quality of the visitor experience are all enhanced together. Look at Penang – in the past, the Penang Convention and Exhibition Bureau (PCEB) was tasked to collaborate with Penang Global Tourism (PGT), Penang's State tourism bureau. Their roles are clear. PGT leverages its marketing and branding effort in selling Penang as a tourist destination, mainly for the leisure tourism market, whereas PCEB is tasked to promote business tourism that focuses on MICE (Meetings, Incentives, Conventions and Exhibitions).

The roles and responsibilities of each "actor" in the Penang state tourism industry are essential in upholding the enterprise to avoid these opinions and perceptions from getting muddled. Unfortunately, role confusion among public officers from different institutions does happen due to internal issues, affecting performance and forming poor perceptions of the institutions, both at the state and federal levels.

Famous street art in Lebuh Armenia. Photo by: hin255 ©

Many industry and tourism academics have, in the past, stated that the review of the 1992 Tourism Industry Act would have been the ideal vehicle for fundamental and transformative changes, but there has not been much progress in the status of the review since the pandemic. The real issue is that tourism is a federal affair, and tourism policies and product planning are the Ministry of Tourism, Arts and Culture's (MOTAC) responsibility. States can only focus on tourism marketing and promotion and use a name that does not imply a separate tourism department from MOTAC. Hence, for a small island like Penang, PGT should focus on tourism destinations, working in line with the direction set by the Penang State EXCO Office for Tourism and Creative Economy (PETACE).

Seberang Perai, on the mainland, has fantastic rural and agritourism potential, which has yet to be properly developed and accessed. The State or PGT could curate attractive rural tourism corridors with local businesses and the local community. The mainland can capitalise on the so-called product fatigue on the island, but it seems that mainland Kedah has been the beneficiary, especially the Gunung Jerai Geopark area. Even Penangites are flocking to this emerging destination. Hence, political will must be present to ensure these products, whether on the island or mainland, is of the highest quality and marketed accordingly. Consider the segmentation of the products – look into forming trails like ecotourism trails, agritourism trails, cycling trails, adventure tourism trails, gastronomy trails and other niches to slow tourism products.

All stakeholders and agencies cannot continue to work in silos. Tourism is not just about having some ideas, developing a masterplan and launching products, it must be supported with a range of products and services that are well-maintained. It is time for PETACE to integrate all the stakeholders and agencies. PETACE can also audit the functions and effectiveness of agencies, like PGT and PCEB, to ensure that all tourism products are of the highest standards and quality. Engaging local tourism academics to carry out these audits will provide the mind over the matter.

The pandemic has changed how we live, work and travel. We now have a once-in-a-lifetime opportunity to build back better.




Vikneswaran Nair

is President of DISTED College, Penang and Professor of Sustainable Tourism at Wawasan Open University, Penang. He is also the president of the Malaysian Ecotourism Association.