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>Industries>Services>Hospitality (Hotels and Tourism)

Hospitality
Sub-sector

Global tourism made a strong recovery in the first half of 2022, with tourist arrivals nearly tripling between January and July compared to the same period globally, according to the United Nations World Tourism Organisation (UNWTO). Around 474 million tourists travelled internationally during this time, up from 175 million in the same months of 2021, marking an almost 60% recovery from pre-pandemic levels.

In Malaysia, the Ministry of Tourism, Arts, and Culture (MOTAC) foresees a two to three-year timeline for international tourist arrivals to return to pre-pandemic levels. This duration allows for a full recovery, assuming resources remain accessible./p>

The Government also introduced a ten-year transformation plan, the National Tourism Policy (NTP) 2020 – 2030, aiming to position Malaysia in the top ten tourist destinations for both arrivals and receipts. Embracing Smart Tourism is a pivotal strategy for sustained competitiveness.

Tourists enjoy the unique culture, food, and biodiversity of Malaysia, with its well-established infrastructure serving a wide range of travellers. For travel advice and business information in Malaysia, visit mysafetravel.gov.my.

Investments Approved in 2022

16

Approved Projects

RM2.1 bil

Total Approved Investments

1,917

Job Opportunities

For more statistics, please click here.

Tourism Recovery Framework (TRF) 2.0 (2022 to 2024)

MOTAC introduced the Tourism Recovery Framework (TRF) 2.0 on June 21, 2022, to fortify and renew the tourism industry. This framework highlights five key strategies, including enhancing tourism and cultural offerings and promoting sustainable, inclusive tourism activities.

Tourist arrivals in Malaysia have exceeded expectations, leading to multiple upward revisions of forecasts. The country is expected to receive 10 million international tourists this year, with tourism receipts estimated at RM26.8 billion. The positive outlook can be attributed to the relaxed conditions for tourist arrivals, which have made Malaysia a hassle-free destination for travelers.

The ringgit’s affordability Is expected to draw more inbound tourists and bolster the economy through foreign currency influx. Malaysia has always been a budget-friendly tourist spot, and with goods and services becoming even more affordable, this trend is likely to continue. Additionally, business tourism will benefit from the lower costs of hosting events such as conferences and trade shows.

Malaysia’s attractive exchange rate is expected to boost tourism for leisure and business. This is likely to strengthen the economy as Malaysia has always been an affordable destination. Goods and services are now even more affordable, benefiting both inbound tourists and business. Hosting conferences and trade shows will also be more affordable, increasing international participation. The government is aiming for hospital revenues from medical tourism to reach RM1.2 billion this year and RM2.4 billion in 2025, according to the Malaysia Healthcare Travel Council (MHTC).

Tourism investments have not kept up with global trends despite an increase in passenger traffic and international travel. Operators are focused on replenishing existing capacity in developed markets and re-evaluating risk exposure in developing economies.

In 2021, 256 tourism projects worth approximately US$9.5 billion (RM45.07 billion) were announced, an 8% decrease compared to the 271 projects worth US$17 billion (RM80.65 billion) announced in 2020.

The National Tourism Policy (NTP) 2020-2030 aims for sustainable and responsible tourism through practices like using solar panels, water-saving, natural materials, and native plants in landscaping. MIDA continues to support these efforts.

Equity Requirement 

Hotels

1 & 2 Star : 100% Malaysian

3 Star : At Least 30% Malaysian

4 & 5 Star : No Equity Restriction

Theme Parks

No Equity Restriction

Convention Centres 

No Equity Restriction

Recreational Parks / Other Tourism Projects

At least 49% Malaysian including 30% reserved

Promoted Activities
(New Projects)

New projects involving these promoted activities within the tourism industry are eligible for incentives:

Theme Parks

Convention Centres

Recreational Parks

Hotels (1- 3 Star)

Other Tourism Projects

Government Support

To boost investor interest, the Government provides tax incentives for tourism projects including hotels, theme parks, convention centres, recreational parks and other tourism projects.

 

Pioneer Status (PS)

Companies may benefit from Pioneer Status of 70% of the statutory income for each year of assessment of its business operations.

OR

Investment Tax Allowance (ITA)

Companies may benefit from income tax exemption package of 60% allowance on the qualifying capital expenditure incurred within a period of 5 years where the allowance can be used to offset against 70% of the statutory income for each year of assessment of its business operations.

Promoted Activities
(Expansion Projects)

Expansion, modernisation and refurbishment projects for the following establishments are eligible for incentives:

Hotels (1-5 Star)

Theme Parks

Other Tourism Projects

Government Support

To strengthen the competitiveness of the tourism industry, the Government provides tax incentives for the expansion, modernisation and refurbishment of hotels, theme parks and other tourism projects.

Investment Tax Allowance (ITA)

Companies may benefit from income tax exemption package of 60% allowance on the qualifying capital expenditure incurred within a period of 5 years where the allowance can be used to offset against 70% of the statutory income for each year of assessment of its business operations.

Image by Datai Langkawi via www.thedatai.com

Our Investors’ Highlights

Encore Melaka Impression Series is Southeast Asia’s largest performing arts theatre which offers a 70-min cultural performance that portrays the six centuries of Melaka’s history.

- PTS Impression Sdn. Bhd.

Get Started

MIDA provides comprehensive support to your business as you consider the competitive and comparative advantages Malaysia has to offer for your investment. Explore our dedicated resources, wide range of facilities or consultation services to assist you in expanding your operations here.
Find out more about the policies, incentives and facilities in the hospitality sub-sector.
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