EMERGING MARKET: EAST MALAYSIA (SABAH & SARAWAK)

Tourism Industry Conference

25 April 2016

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Malaysia Landscape at a Glance: East Malaysia as a region of importance

East Malaysia constitutes 20% of the overall Malaysia population.While less populated and cosmopolitan than Peninsula Malaysia,it is an area rich of natural resources.

Total population of Malaysia: 29.9m*(Sabah – 3.61 mil; Sarawak – 2.64mil)

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Malaysia Landscape at a Glance: Limited international flights; Direct air connectivity to SG

Malaysia is directly connected to Singapore via 3 East Malaysiancities – Kuching, Miri, Kota Kinabalu.

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City No. of Flights (One-way

weekly service)

Seat Capacity

One-way weekly seats

AirAsia SilkAir Malaysia Airlines

Kuching 19 3,172 1,620 556 996

Miri 10 1,716 720 - -

Kota Kinabalu

14 2,310 1,260 1,050 -

Total(% of market share)

43

(8.8%)

7,198 3,600 1,606 996

*As at March 2016

• 2 out of 5 Economic Corridors in Malaysia are based in East Malaysia – Sabah Development Corridor and Sarawak Corridor of Renewable Energy

• Major developmental projects announced as part of Malaysia’s Budget 2016 to strengthen economic activities:

– development of Sarawak’s toll-free Pan-Borneo Highway spanning 1,090-km which is expected to be completed in 2021 with an estimated cost of RM16.1 billion

– Commencement of highway construction work worth an estimated RM12.8 billion from Sindumin to Tawau in Sabah, spanning 706-km

By 2030, ↑ State real GDP by 5X

>1.6mil new jobs

By 2025,↑ State GDP/capita by 3X ↑ State GDP by 4X>900,000 new jobs

Key GDP growth drivers to lead the way for East Malaysia’s economic development

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The East Malaysian Traveller: Stays longer, spends more on Shopping and travels with families

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The East Malaysia leisure traveller stays 1.02 days longerthan the general Malaysia leisure traveller.

Leisure travellers constitute 72% of the total East Malaysia traffic to Singapore – bigger proportion of leisure travellers compared to whole of Malaysia.

Spends 64% of the total expenditure on shopping,more than the general Malaysia leisure traveller

Source: STB Overseas Visitor Survey, 2014

More than half of visitor arrivals from East Malaysiatravelled with their families (children & extended families).

92% of East Malaysia visitor arrivals are repeat visitors, ofwhich 85% visit SG at least once in the last 2 years.

Consumer insight studies show the potential of the East Malaysia leisure market

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MOTIVA-TORS

WHY IS IT RELEVANT? VERBATIM STORIES

LEARN NEW CULTURE

• There is some desire to know how the world lives

• Believes travel is key to children’s exposure and enrichment; learning outside of the classroom

“Go check out other countries, see how they moderniseand advance”

“Travelling is a sort of self-improvement”

“Must bring kids out to see (the world) because if we don’t bring them, they will become ‘frogs in the well’.”

REJUVENA-TION

• Allows them to get away from the usual routine

• A way to pamper self & family, and de-stress

“It’s a treat for myself…Always working…very tired”

“To relax. Because there’s stress from work and in daily life”

BONDINGWITH

FAMILY & FRIENDS

• Time for family bonding as parents have limited time with children

• Enjoyment and creating new memories with friends

“Improve bonding time with family. Spend quality time with them”

“Happy because can be with family, go out with family…”

Source: STB Focus Group Discussions (FGDs), 2014

How can we tap into the East Malaysia leisure market?

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INSIGHT WHAT CAN WE DO?

STRONG EMPHASIS ON FAMILY

• Focus on the learning/enrichment aspects; when travelling, the family not only enjoy and bond, the children get to learn too

• Showcase shared experiences rather than individual experiences

SENSE OF EAST MALAYSIA HAVING LIMITED VARIETY

• Communicate novelty through creating awareness on new attractions or changes made to existing attractions

• Create desire for repeat travel by having something new to offer for every trip

VALUE-SEEKERS• As a price sensitive market, it is important to emphasize

value, through bundled products, promotions to be tied to peak travel periods

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Key engagements in FY15/16

KNOWING THE MARKET

• Identify target audience and understand consumer behaviour

• Develop channels & cultivate relationship with outbound travel agents

Trade update session with SilkAir

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Key engagements in FY15/16

MARKETING CAMPAIGN

• Build awareness and reach out to consumers through the right touch points

Marketing campaign with key opinion leader, Aaron Aziz

• Focusing on family and long weekends travel• Buying into the right touch points such as regional dailies

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Key engagements in FY15/16

MARKETING CAMPAIGN

• Build awareness and reach out to consumers through the right touch points

52 Weekends Guide

• Showcasing the many events and activities held in Singapore in 2016

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Key engagements in FY15/16

TACTICAL PROMOTIONS

• Partner trade stakeholders to create promotions targeting at East Malaysians

3 Bursts of Tactical Promotions with Singapore Airlines/ SilkAir

• 23% of tickets sold ex-Kota Kinabaluand Kuching

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Key engagements in FY15/16

TACTICAL PROMOTIONS

• Partner trade stakeholders to create promotions targeting at East Malaysians

AirAsia Travel Fair (Kuching) – 16 & 17 April

• Tie-up with AirAsia to offer “Buy 2, less RM200” promo

• 84% increase in total sales over 2015

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Upcoming Plans for FY16/17

PLANS:

1. AirAsia Travel Fair (Kota Kinabalu) – 30 April & 1 May

2. Trade updates in Kuching and Kota Kinabalu – End July/ August

3. East Malaysia trade fam – Early October

4. Continuation of marketing efforts

OBJECTIVES

• Further penetrate the emerging market of East Malaysia; increase visitor arrivals and length of stay

• Deepen engagement and build a strong network of trade partners

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Trade Engagement Calendar – FY16/17

ACTIVITY DATE

Buka puasa networking session (KL) End June

Trade update session (KL) Mid July

Trade update (BTMICE) End July

Trade update (East Malaysia – Kuching & Kota Kinabalu) July/ August

In-market travel fair August/ September

Trade fam (KL travel agents) September

Trade fam (Bumi travel agents)

Trade fam (Corporate travel agents) Late September

Trade fam (East Malaysia travel agents) Early October

Trade appreciation dinner Mid November

Key contacts

Winx LooAssistant ManagerSTB MalaysiaEmail: winx_loo@stb.gov.sg

Serene WoonArea DirectorSTB MalaysiaEmail: serene_woon@stb.gov.sg

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