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TOURIST's complaint lately of “5* price, 3* service” exposed many symptomatic weaknesses in the tourism industry.

Though this negative comment is directed at Semporna, it is also true, to various degrees and many aspects, to other parts of Sabah, including KK. Prime example is KKIA.

This is not the first time that tourists have voiced such a complain, nor will it be the last unless the Sabah tourism authorities [State and Federal] and Sabah tourism industry players take serious/cohesive/holistic actions to rectify the many inherent/systemic shortcomings.

Over charging, as has been highlighted in this complain, for poor service is only one aspect of shortcomings. There are numerous areas that need attention and upgrading.

The whole industry, from A to Z, needs to be revamped if Sabah wants to elevate the industry to its full potentials.

The low value trap in Sabah’s tourism.

Destination Total Tourism Receipts (Est. USD) Total Arrivals Avg. Spend Per Visitor (USD) Primary Segment 

Singapore $22.8 Billion 16.9 Million $1,349 Business & Luxury MICE 

Bali (Int'l) $9.1 Billion 6.95 Million $1,309 Digital Nomad & Lifestyle 

Maldives $5.4 Billion 2.2 Million $2,454 High-End Ultra Luxury 

Sabah $2.05 Billion 3.79 Million $541 Mass-Market & Nature 

From the above chart, it is crystal clear that Sabah is very far behind in Tourism Receipts and Average Spending Per Visitor, both are very pertinent measurements for the performance of tourism industry. 

Very important to note that Maldives which has a much smaller number of tourist arrivals is much better off than Sabah in Tourism Receipts [more than double of Sabah’s] and Average Spending Per Visitor. Its tourists are of higher value, 4 times higher than Sabah’s.

The Ministry of Tourism and Environmental Development was established in 1987. Tun M approved open sky policy for KKIA, Kuching, Langkawi and Penang after intensive lobbying by SIHA in 1999. Chong Kah Kiat played a pivotal role in Sabah’s tourism.

Da Nang, Vietnam [Total arrival:17.3 million, international: 7.6 million, domestic: 9.7 million], which started tourism much later has a much bigger [arrivals], better organized tourism industry than Sabah.

Understandingly so, Sabah started tourism with relatively low value tourists in the 1980s. After nearly 40 years, Sabah is still bogged down with the low value tourism trap model. Something is very seriously wrong.

Sabah has been boasting of world class UNESCO Heritage sites, excellent marine parks, longest stretches of pristine beaches, world no. 1 Sipadan diving site, largest forest reserves, diverse culture, racial harmony, conducive weather. Sabah has a “Gold Coast” from Tuaran to Kudat. Nothing is happening.

The list goes on. 

God has been more than kind to Sabah. He has endowed Sabah with so many advantages. 

These are free. Singapore has to pay and build all its tourism products like Singapore Zoo, Garden by the Bay, the Jewel at Changi Airport, Sentosa Island. These cost billions. 

Construction cost of the Jewel in Changi was S$1.7 billion and Garden by the Bay exceeded S$1 billion, not including land cost! 

Sabah tourism players must ask themselves honestly, what have gone wrong. Where have gone wrong. Who have gone wrong? 

Why can’t Sabah escape from the low value tourism trap after more than 30 years of tourism?

These questions should be taken in the right spirit of wanting to improve. Being defensive and finger pointing are negative attitudes. Burying the head like the proverbial ostrich will not be the solution. 

Sabah cannot sustain in the low value tourism trap.

This is urgent. Sabah must up its tourism industry in the value chain. The minimum it must do is to keep up with inflation. 

Costs are rising in staff salary, air travel, fuel, construction cost, vehicle cost and most glaringly, land for construction of hotels and resorts, offices. Then there is imported inflation which is a major consideration.

At one time, Sabah tour operators were giving “Zero cost” tourism. How low can it go?

Very glaringly, Sabah has experienced very little upgrade or new investment in tourism products. Some 5* hotels have fallen into disrepair with poor maintenance, looking very tired and neglected.

Sabah tourism will face stronger head winds if it cannot escape the current low value tourism trap.

Not surprising, the industry has been losing good manpower to other destinations and industry. 

Tour operators and guides will not make money. Above all, the largest investors are the hotel/resort owners and they will not get their investment returns.

The most important point to consider is that price is a function of quality of service. It is not low or high price per se. Here are 2 examples:

Example 1: Shangri-La Tanjong Aru Resort and Shangri-La Rasa Ria.

Both Shangri-Las command higher room rates than the other 5* hotels and enjoy higher occupancy rates. High value tourists prefer high prices to get quality of service.

Example 2: Singapore’s tourism industry.

Singapore is the most expensive destination in ASEAN by far. It is also the 2nd most expensive cities in the world. It has to build all of its tourism attractions. A 3* hotel outside central Singapore can cost more than S$300 or RM1,000 per night!

It has been enjoying consistent and impressive inflow of high value tourists. 

The principle of the matter is simply this. Tourists are prepared to pay high prices if the quality of service is commensurate with the pricing. 

Poor service attracts low value tourists. High quality service will attract high value tourists.

Can Sabah escape the low value tourism trap?

Of course, Sabah can provided Sabah can align its service quality, infrastructure, and product offerings with premium pricing.

A detail analysis on Sabah’s tourism receipts and Tourism Spendings would confirm that both have uninspiring, impressive growth rate, not matching those in other performing destinations.

Sabah must confront and overcome the fact that we have progressed very little in upgrading the tourism value chain in the last 40 years. 

Overcoming the low value tourism trap will require a high degree of leadership, co-ordination by those in authorities at the ministry and tourism players in the industry.

The biggest problems for Sabah to escape from the “LOW TOURISM VALUE TRAP” are internal and the inability to put the act together.

Here are some pointers which may be helpful:

[1] The Tourism Ministry and players in tourism industry should recognise the problem of the low value tourism model which will not benefit anyone. They should work together to upgrade the infrastructure, administrative system to clean up the garbage and upgrade the service level.

[2] The hotels, especially the 5* hotels should upgrade their maintenance ASAP.

[3] Tourism players should invest in their staff in proficiency and efficiency. Just being nice is no longer good enough.

[4] Promotion strategy in the past has failed to attract high value tourists. The Tourism Ministry, Sabah Tourism Promotion Board and the industry should work together on a new plan to get high value tourists. The focus should be “Quality over Quality.” 

[5] Tourism players should reduce or stop competition in their price war. Instead, they should focus on quality of service.

[6] Promote new high end tourism products like MICE, medical tourism, boutique resorts. 

[7] Ministry of Tourism can attract private investment for high end tourism products.

[8] Promote full-service airlines with business class seats, private jets and yachts to come to Sabah.

[9] The Ministry of Tourism and all major tourism players should pressure MABH to wake up its management of KKIA.

High value tourism can give major impacts to Sabah’s economy. 

Expecting Sabah to achieve Singapore’s performance may be over doing it. However, it is absolutely within possibility for Sabah to be on par with Bali’s tourism receipt of USD9.1 billion [about 30% of Sabah’s GDP] or Maldives’ USD5.1 billion. Sabah has the products. Lacking now are appropriate leadership and private sector initiatives.

Form The Sabah Tourism Destination Council to upgrade Sabah’s tourism. 

After more than 30 years of “Quantity over Quality”, it will be very tough to upgrade to “Quality over Quantity”. The present system of promotion, business relationship and practices have been geared for low value tourism. “Quality over Quantity” is a new ball game altogether. But not impossible.

What is needed to shift upwards to “Quality over Quantity”?

[1] Strong focus from political leadership.

[2] Willingness of private sector players to get out from the present comfort zone and venture/invest into the high value tourism business which is much more demanding and competitive.

They will have to invest in better staff, operational system and more promotion money.

[3] A new set of policies that can facilitate the achievement of “Quality over Quantity” To promote “Quality over Quantity”, Sabah will have to look for a more effective co-ordination system. 

Towards this end, there should be a high-level council to be called The Sabah Tourism Destination Council. 

This council shall be tasked to oversee the upgrading of Sabah tourism from the present low value model to high value model.

This council shall be chaired by the Minister of Tourism himself with directors of relevant government departments and representatives of major tourism sectors.

[4] DBKK, being the custodian of the Sabah’s capital city and Borneo’s largest entry point, should play a major role in The Sabah Tourism Destination Council.

The views expressed here are the views of the writer and do not necessarily reflect those of the Daily Express. If you have something to share, write to us at: Forum@dailyexpress.com.my