On December 23, 2020, the Malaysian government launched the National Tourism Policy (NTP) as a roadmap for support to sustain the country’s tourism industry until 2030. Part of the strategy is to shape Malaysia to become a preferred destination for tourists from around the world.
One of the plans outlined by the Malaysian government is “Smart Tourism 4.0,” an initiative to advance the sector by capitalizing on technological innovations. Smart Tourism 4.0 aims to enhance tourist experiences, maximize Malaysia’s competitiveness, and promote sustainability via ecotourism. Travel-focused startups such as LokaLocal, Tourplus, and Moovby have been working alongside government agencies to make this possible.
Malaysia’s battered tourism industry
In 2019, tourism was the third largest contributor to Malaysia’s GDP, accounting for 15.9% of the overall value. However, the COVID-19 pandemic has severely impacted the sector. According to Tourism Malaysia, an agency under the Ministry of Tourism, arrivals fell from 26.10 million in 2019 to 130,000 in 2021—a near-wipeout. Meanwhile, tourist receipts dropped from MYR 86.1 billion to MYR 240 million.
Following Malaysia’s reopening, which includes the recently renewed passage at the Singapore-Malaysia land border, Malaysia expects to see a revitalization of its tourism industry. However, some travelers may still be hesitant to visit, given the stringent protocols for entry. Travelers must first register with Malaysia’s MySejahtera app to submit their health declaration form—a week-long process—before obtaining approval. On top of that, some may face long quarantine periods when returning home from Malaysia.
What is Smart Tourism 4.0?
Smart Tourism 4.0 was coined after Malaysia committed to formulating its own Industrial Revolution 4.0. The scheme is meant to create convenience for travelers. This includes utilizing information and communication technology. Technologies such as tourism apps and social media play crucial roles in enriching this travel experience.
With the spotlight on Smart Tourism, travel startups have the opportunity to implement their services. Companies that have gained noticeable traction include LokaLocal. Founded in 2016, LokaLocal’s platform works to connect travelers with local partners, offering community-led adventures and immersive virtual tours. Meanwhile, Tourplus works as an online travel marketplace, bridging language barriers and ensuring safe transactions between travelers and guides. Additionally, Moovby, a peer-to-peer car-sharing marketplace, offers an alternative to Malaysia’s crowded transportation system, giving travelers a way to rent cars directly from locals.
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Adapting to travel restrictions
When Malaysia’s travel industry ground to a halt during the pandemic, travel startups quickly adapted by forming new partnerships. LokaLocal partnered with InvestKL, an agency under the Ministry of International Trade, to provide a solution for travel immobility—virtual tours. The interactive experience gave participants a way to “walk” through popular destinations, including the Cameron Highland Butterfly Garden and the Gopeng Heritage House. These experiences doubled as promotions to encourage visitors to see the sights up close after travel returns to normal.
Meanwhile, Tourplus turned to focus on domestic tourism. Tourplus worked with Tourism Selangor, Selangor’s official Tourism Promotion Agency, to release the Go Selangor mobile application. The app provides recommendations for travel, transportation, and food. Tourplus founder Rickson Goh said during the official signing ceremony between Tourism Selangor and TourPlus in April 2022 that the collaboration “will be able to help the travel industry transform into digitalization 4.0 as well as assist local industry players by reviving the domestic tourism market so they are ready for post-COVID-19 travel demands.”
The growing popularity of ecotourism
A key segment of Smart Tourism 4.0 is ecotourism, which focuses on sustainable and responsible ways for travelers to visit and experience new places, ensuring that Malaysia’s natural heritage can be enjoyed by future generations. Ecotourism is not a new concept in the country; a study conducted by Tourism Malaysia in 2016 found that its overall value has been growing by 10% to 35% each year.
The popularity of ecotourism reflects the increasingly environmentally conscious mindset of tourists. Malaysia presented plans to redouble efforts to foster ecotourism during the Expo 2020 in Dubai, with the reopening of Langkawi Island and offerings of nature-based travel packages and community-led tours.
The potential and uncertainty of Smart Tourism 4.0
In a study conducted by Monitor Deloitte, smart tourism may increase Malaysia’s tourism-based revenues from USD 25 billion in 2018 to USD 110 billion by 2030, an increase of more than 340%.
However, some domestic and international tourists remain doubtful. A questionnaire conducted by students from the International Islamic University of Malaysia found that the most common concerns include the country’s spotty internet infrastructure, which makes it difficult to access travel applications. Additionally, tourists said that tourism-related applications are not sufficiently comprehensive. For example, there was no information about less popular destinations such as Tasik Biruk. In general, most respondents agreed that the travel applications were difficult to access due to disconnected networks, and that digital devices were too expensive.
Nonetheless, Malaysia’s tourism industry is slowly returning to its pre-pandemic state as travel resumes. Ahead of the ramp-up, investors have cut fresh checks for travel startups. Thanks to adjustments during Malaysia’s lockdown, travel technology startups successfully clinched interested investors and funding. Moovby closed out 2019 having secured USD 500,000 from angel investors and strategic partners. Tourplus secured USD 1 million in seed funding from angel investor Jin Hui Wong, GT-MAX, SOSV Chinaccelerator, and other undisclosed investors in 2020. Tourism Malaysia has also introduced a program called Gamelan 2021, providing grants of up to MYR 300,000 (USD 68,000) to eligible travel-related companies in an effort to encourage tourist arrivals and boost domestic tourism.