ECO 261

GROUP ASSIGNMENT

“What is the effect of the Covid19 issue on the economic sectors in Malaysia?
Discuss the effects and measures to overcome it”

Topic: Tourism

A) WRITTEN REPORT (GROUP)

(Full marks: 30 marks)

(AIN) 1. Introduction (5m)

i. Background of Covid 19 problem issues
ii. Background and history of the economic sector that you choose from 2000 until 2020.

(SYAHIRA) 2. Content 1: Effects, must have data/ graphic/ analysis from any accurate sources
(article, journal, magazine and book) to prove the effects of Covid19 and recession. (10m)

3. Content 2: Measures to overcome (10m)

4. Conclusion (5m)
5. References (APA style)
6. Appendices
7. Assignment Declaration Forms (All group members)
Formatting;
(Pages max 48 pages only excluded references, appendices and assignment declaration forms)

Front page must have UiTM Logo, name of each member, matric number, group/class,
assignment title and lecturer’s name. 1.5 spacing. Font arial. Justified) Date line submission 15
July 2021
 GROUP ASSIGNMENT

MALAYSIAN ECONOMY

ECO 261

TITLE: What is the effect of the Covid19 issue on the tourism sector in Malaysia?

PREPARED BY:

1. NURUL AIN BINTI ABD MAJID (2019753383)

2. NUR SYAHIRA AZWA BINTI KAMARUZZAMAN (2019744913)
3. AIMAN HAKIMY BIN SOLAHUDDIN (2019976133)
4. MUHAMMAD NAQIUDDIN BIN MOHD KAMARUL FADHIL (2019958107)

GROUP: JBA1115B

PREPARED FOR: MADAM NURUL FAHANA

SUBMISSION DATE: 15 JULY 2021

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TABLE OF CONTENT

NO. TITLE PAGES

1. INTRODUCTION 4

1.1 BACKGROUND OF COVID 19 PROBLEMS 4-5

1.2 BACKGROUND AND HISTORY OF TOURISM SECTOR 5-7

2. EFFECTS OF COVID-19 TO TOURISM SECTOR IN MALAYSIA 7-8

3. MEASURES TO OVERCOME 9-10

4. CONCLUSION 11

5. APPENDICES 12

6. REFERENCES 13-14

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 1. INTRODUCTION

Tourism, also known as the "smokeless business," is a multi-sectoral activity that

necessitates economic, social, cultural, and environmental inputs and produces
employment both directly and indirectly through the expansion of associated
businesses. Malaysia has achieved the spotlight as one of the world's most popular
destinations. Currently, the tourism industry plays a significant role in the economy and
is recognized as one of the most important sources of foreign exchange profits and a
growth accelerator. Tourism can be a topic on government agendas in the economic
levels, social, and environmental. In 2011, Malaysia welcomed 24.7 million tourists,
bringing in more than 50 billion in revenue. The Malaysian government has played a key
role in establishing a legislative and institutional framework for guaranteeing long-term
tourist sustainability.
Based on studies, in various third-world countries, tourism is the major foreign
exchange earning source. In enhancing and well-recognized economic benefits, the
Government in every country has given support in the tourism sector. Tourism can put
up both economic development at the micro and macro level of a country.

1.1. Background of Covid-19 Problems.

Novel Coronavirus was the term given to a new coronavirus. SARS-CoV-2 is the
name of the virus that caused the serious illness. Those who are showing symptoms of
the illness can now be vaccinated. Antibiotics are ineffective in treating a viral illness.
Mild to moderate respiratory symptoms and will cure without needing any particular
therapy will happen to the majority of persons infected with the COVID-19 virus. For
those with underlying medical conditions such as chronic respiratory disease,
cardiovascular disease, diabetes, and cancer, and people that are over the age of 65,
are at a higher risk of developing a serious illness. Sneezes, coughs, or exhales are
mainly the reason COVID-19 spreads. The worldwide COVID-19 coronavirus pandemic
will have devastating economic consequences.

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 The economic prediction before 2020 by economists predict that if the virus
becomes a worldwide pandemic, most major economies are expected to lose at least
2.9 percent of their GDP by 2020. The economic impact of the COVID-19 pandemic is
primarily due to a drop in demand, which means that fewer people are ready to buy the
products and services available in the global economy. This dynamic is particularly seen
in businesses that are highly impacted, such as travel and tourism. Governments have
set travel restrictions to prevent the virus's transmission, and many individuals have
been unable to book flights for vacations or work trips. Airlines lost anticipated income
due to a drop in customer demand, forcing them to cut costs by minimizing the number
of flights they run.

1.2. The Background and History of Tourism Sector

Development plans have been established by the Government of Malaysia

(GOM) for various time periods in order to promote the country's long-term growth. One
of the most important aspects of any growth plan is tourism development. During each
planning phase, GOM has placed a specific emphasis on the tourist industry. In 2010,
Malaysia also developed a program to further boost the economic development of a
country, with tourism being one of the important industries. The plan is called the
Economic Transformation Program (ETP).

The Eight Malaysian Plan was implemented from 2001 until 2005. When it comes
to planning and implementing tourism activities, there must be a balance of
environmental, cultural, economic, and social considerations. This includes developing
methods to conserve the cultural heritage, and physical environment as well as
establishing a holistic approach to tourism development that includes hospitality,
innovation, and the private sector's strength, as well as instilling courtesy and public
awareness. Malaysia displayed throughout the year as a ‘year carnival destination,' with
an emphasis on unique items that serve to demands such as yachting tourism and
cruises, ensuring visitor safety, well-being, and comfort.

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 The Ninth Malaysia Plan was implemented for the years 2006-2010. During this
development plan, the tourist industry has made significant efforts to expand its
economic contribution. The main goal was to promote domestic tourism while
enhancing Malaysia's international reputation as a popular tourist destination. The
strategy was created in order to better coordinate infrastructure development and
tourism resources. Malaysia 2006a is a strategy for the country's long-term tourist
growth. Ecotourism has been prioritized, with natural resources. For example, islands,
recreational parks, forests, beaches, and lakes being protected. Human resource
development and research projects were also given significant emphasis in the strategy.

In tenth plans, 2011 until 2016, heritage tourism, ecotourism, homestay tourism,
sports tourism, coastal and island tourism, meetings and exhibition tourism, food
tourism, golf tourism, retail, and health tourism are among the nine key sectors of tourist
development in the state. Moreover, these plans also emphasize increasing the image
of tourism locations by holding significant events and implementing large-scale
programs to improve comfort, cleanliness, and safety. It also focuses on expanding
tourism infrastructure and facilities. Lastly, It allows the plan to continue promotion and
marketing of intensive tourist goods in major markets in Asia, Indo-China, and Europe,
with a focus on training and human resource development to offer quality services.

In 2020, Malaysia's Economic Transformation Program (ETP) is a multi-pronged

initiative aimed at transforming the country 2020 into a high-income country. The
government has designed this plan in order to transform Malaysia's economy into that of
a developed country. ETP has chosen 131 entry point projects (ETP), 60 company
possibilities, with a private sector investment of 92%. By 2020, the gross national
income (GNI) per capita will have increased in 2009 from RM 23,700 to RM 48,000, and
more than 3 million new employment would have been created. The ETP is built around
the 12 National Key Economic Areas (NKEA). Communications Content and
Infrastructure; Financial Services; Tourism; Oil, Gas, and Energy; Palm Oil; Business
Services; Electronics and Electrical; Education; Wholesale and Retail; Healthcare;

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Agriculture; and Greater Kuala Lumpur/Klang Valley are among the 12 NKEAs that
have been chosen.

2. EFFECTS OF COVID-19 TO TOURISM SECTOR IN MALAYSIA

Tourism has always been one of the biggest supporting systems of the economy
in Malaysia. Even so, it is unpredictable that at the end of 2019, the start of spreading a
dangerous virus named Covid-19. The spreading started from a city in China named
Wuhan. The condition regarding the spread of Covid-19 worsened not only in Malaysia
but also worldwide as cases spiked. Furthermore, there were various rumors regarding
the main cause for the virus to suddenly exist and spread in a blink of an eye. Such
unexpected matters that happen in a large range also have enormous effects on the
country. In the first nine months of the year, tourist arrivals to Malaysia contracted by a
whopping 78.6% to 4.29 million from 20.1 million in the previous corresponding period.
Most of the tourists arrived before the borders were shut on March 18. As a result,
tourism records show that the country’s third largest revenue contributor plunged 80.9%
to RM12.6 billion from RM66.1 billion in the previous corresponding period.

First of all, the barrier would be closed for almost every country worldwide to stop
the spreading of the virus that might even worsen if no actions were taken to halt the
spreading. Even though this action helps with the stoppage for the virus from spreading
wider, tourism activity all around the world has been affected. As the travel restriction is
implemented in Malaysia, earnings from the sector of tourism does not come in handy
with the situation occurring to help to increase our national economy. With the barrier
closed, less and less number of tourists could come to travel at the destination that they
have planned ahead. This matter brings impact to the performance of the tourism sector
all over the world including Malaysia. As we anticipate tourists to travel to our country as
it is well-known for our multiracial and delicacies, the tourism sector is also one of the
biggest contributing factors in our economic activity.

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 Besides, many operations in the tourism sector were forced to be closed as they
do not gain numbers that are ratioed to their capitals to keep the operations going. As to
survive during this pandemic era that is hardly known when it will come to an end,
theme parks are mostly shut down as they keep losing large numbers of visitors as
people are afraid to stay in crowded places. Not to mention that most people are
obstructed to stay at home to prevent them from getting the viruses spread by strangers
on the road. Covid-19 are deadly dangerous viruses that can be gotten without age
limit, be it children or elderly. Moreover, even within the range of family members and
close friends can spread the virus to an individual as there is no social distancing
practised by most people in general. Hence, avoiding crowded places that are most
probably hard to apply social distance such as amusement and theme parks would be a
safe choice.

Next, the closing of accommodation such as hotels which reduces room usage in
the hotel's operation and department. “Apart from loss of revenue, it is estimated that by
the end of 2020, between 10% and 20% of the industry’s workforce would have
retrenched, with Kedah, Perak, Negeri Sembilan, Melaka, Sabah and Kuala Lumpur
also Selangor being hit the hardest. Most of the remaining employees are on unpaid
leave or have had their pay cut.” said Yap Lip Seng, CEO of Malaysian Association of
Hotels. With these pandemic matters still happening in the mid of year 2021, it is hard to
rise back as operators of accommodations such as hotels into the market of tourism
globally. Without knowing when we will be seeing the end to this pandemic, most
operators would have second thoughts on keeping the business going as it is really
challenging for them to minister according to the demand suits during pandemic.

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 3. MEASURE TO OVERCOME

The global advertising campaign for the major campaign "Visit Malaysia 2020"
has launched. Around 30 million visitors were expected to visit the Southeast Asian
country, bringing approximately €20 billion ($21.5 billion) in income. However, COVID-
19 has become a major issue that causes a lot of damage especially in the tourism
industry.

In the tourism industry, hotels play an important role for their services. Therefore,
this pandemic also impacts on hotel management in many ways. The government has
decided to find a solution to reduce the loss incurred by the tourism industry. One of the
solutions is some hotels are being utilized as quarantine sites for Malaysians returning
from overseas in order to sustain the companies. The government pledged to pay the
equivalent of €30 a night for every room. On the list, there were almost 23,000 rooms.
Despite this, they were not completely full.

Other than that, The Malaysian Association has come up with some solutions
and proposals to Malaysian Central Government. In the proposal, the Malaysian hotel
sector has requested a 50% reduction on all water costs from now until December
2020. They have requested governments to consider a 50 % reduction and a waiver of
the maximum demand costs till the end of 2020 in the case of electricity. They have also
requested the government guarantee on SESB (Sabah) and Sarawak Energy fall into
line. Furthermore, the hotel sector has demanded a standard industrial tariff for the
tourist and hospitality sector, rather than the commercial tariff, in order to acknowledge
the tourism industry's contribution to the country's economy.

Besides, government incentives assisted the growth of the domestic tourism

industry. The government has provided incentives and aid to tourism and culture
industry stakeholders through economic stimulus packages such as Prihatin, Prihatin
SMEs, and the National Economic Recovery Plan (Penjana).The government also

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provided solid growth incentives, allocating RM1 billion to the Penjana Tourism
Financing scheme to fund small and medium-sized firm transformation projects.

Lastly, to stimulate domestic tourism, Prihatin provided a special individual tax

reduction of up to RM1,000 for domestic tourism expenditure. More than 7,000 tour
guides who are licenced by the ministry have received one-time financial aid of RM600,
totaling more than RM4 million. In addition, programmes like the Meet in Malaysia
campaign, which will run through December of this year, have been established to assist
MICE industry participants. 531 travel agencies have been granted a fee remission for
renewing licences till the end of the year, which is a contributing factor to the industry's
growth.

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Conclusion

In conclusion , this research focuses on the economic impact of the Covid-19

pandemic on the tourism sector. The pandemic's outbreak has had an influence on the
majority of people's lives around the world. This pandemic has startled every individual
and industry in every country throughout the world. Due to travel restrictions, social
distancing, and quarantines, the new Covid-19 rule has had an impact on economic
growth around the world, as well as causing an economic slump. According to The
Stars, travel restrictions will be the damaged for the tourism sector and the economy,
resulting in the tourism sector in Malaysia dying.It also looked into the decrease in the
hotel industry, air transport industry, and jobs. As a result, it can be concluded that the
Covid-19 epidemic had a major impact on the tourism industry as well as the economy
of a country. With the coronavirus outbreak and the resulting impact on the tourism
business, The only conclusion we can get is that the industry is down but not out. To
keep their heads above water, people in this industry must implement a crisis
management plan based on the COVID model stated.

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APPENDICES

Diagram 1.0 Effects of Covid -19 to Tourism Sector in Malaysia

Diagram 1.1 Effects of Covid-19 to Tourism Sector in Malaysia

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 REFERENCE

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tourism-help-malaysia039s-travel-sector-recover-from-covid-19

➔ Mayukh Dewan. (2020, April 28). Solutions for Surviving COVID-19: A Malaysian

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