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Sarawak Tourism Board
Dato’ Rashid Khan, CEO of the Sarawak Tourism Board

The Sarawak Tourism Board is the main body to promote the state as a preferred tourist destination throughout the world. Inside Investor asked the agency’s CEO Dato’ Rashid Khan about the challenges of marketing Sarawak and his future plan.

Q: Could you provide some numbers on Sarawak tourism? How many guest arrivals have been counted in 2011, what was the revenue from tourism achieved?

A: We had 3.8 million arrivals in 2011 with a turnover of RM7.1 billion. There was a 16 per cent increase in overall arrivals and 23 per cent in foreign arrivals. This was the best achievement in years, with an exceptional growth in arrivals from Brunei, which is our close neighbour. In fact, for the first time we experienced growth from all tourism source countries. I believe this is the result of our tourism industry transformation programme inaugurated in April 2010 to address the decline after the economic crisis. We managed to narrow the gap by 0.1 per cent in 2010, and in 2011 we had a double digit growth. It was the outcome of a shift in focus from a strategy point of view. We focused more on a consumer-driven strategy rather than on an industry-driven programme as we started to re-image and re-brand Sarawak in 2011. In the past we had culture, adventure, and nature as anchor points to position Sarawak. Now, we put adventure in the focus, with elements of culture and nature. Our media campaign won the gold award at the ITB tourism exhibition in Berlin, Germany. It’s only a matter of the right strategy and using the resources well. In the first quarter of 2012, we also recorded a double digit growth of 14 per cent, with foreign arrivals up by 21 per cent which actually surprises me as flights to Sarawak had been reduced at the end of 2011 after the withdrawal of Firefly and prices of other carriers going up. We were concerned about the accessibility of the island, but the numbers increased anyway.

Q: But flight connections are still an issue. What are your plans in that respect?

A: To address the air accessibility of Sarawak is part of our transformation programme. We are in continuous talks with the airline industry and are selling our destination with quite some success. Newcomers are Indonesian Airlines and Kal Star, also from Indonesia. Recently, we got MASWings, Malaysia Airlines’s low cost carrier, which also added capacity on routes such as Brunei-Kuching and to Pontianak in Indonesia .

Q: What are the main touristic attractions of Sarawak? How would you argue that the state is a must-see destination in Southeast Asia?

A: Flight connections are not everything, the destination has to appeal to visitors. For example through our lifestyle products: the most iconic product of this kind that Sarawak currently offers is the Rainforest Music Festival in July. It is now among the top 25 international festivals globally. We also have the Borneo Jazz Festival, and other events like regattas, surfing competitions, and so on, as well as native festivals such as the Kaul Festival. Apart from that, Sarawak offers a lot of outdoor activities, for instance caving, rafting, climbing, or trekking, and many cultural sites to visit. We also cater, for example, for honeymooners, nature lovers, and the like.

Q: How would you assess the existing tourism infrastructure in Sarawak? Are there enough hotel rooms in the right star classification?

A: There is space for further improvement. It is a chicken-and-egg situation. Right now, as we are growing in double digit figures, it is the right time to address investors. However, the state is huge, and we cannot develop the entire area. We need tourism clusters or a tourism belt in Sarawak, where the industry can be bundled. The gateway to Sarawak and its hub must be Kuching. A secondary hub can be Miri in the north, which opens up to the hinterland, to the rainforest and can be a basis to visit the native tribes. There are many undeveloped areas of interest for investors.

Q: What touristic target groups are you addressing?

A: We are always targeting regional markets and not long haul countries. Since the global economy is not doing well in some places and certain countries are almost going bankrupt, we focus on ten key regions that matter. These are Peninsular Malaysia and Sabah for the domestic source markets, and then Brunei, Singapore, Australia, Indonesia, and North Asia including China, Japan, and Korea. In Europe we look at the region including UK – a very traditional market – Germany, and Netherlands. We found out that a lot of Europeans love adventure and outdoor holidays. However, there is the issue of carbon emission tax in the EU which causes flight prices to rise. Apart from that, we have seen US and Arab arrivals increasing, although from a small base.

Q: What role does MICE tourism play for Sarawak (meetings, incentives, conferences, exhibitions?)

A: It’s complementary. This is handled by Sarawak Convention bureau for promoting MICE, and we are promoting the destination. We market Sarawak as a different experience for businessmen and delegates. But they must love nature and soft adventure. We are not a shopping destination, and we take care of sustainable tourism. Of course we need numbers to grow, but it needs to be well managed. We don’t want to destroy the environment. We want to make use of what we have, and we don’t want to build Disneyland or any other theme park.  We want to climb the value chain, but not commercialise everything. And we also care for the local people as per our social agenda. The locals must benefit from tourism, there should be a rural income left from that industry which, in turn, lifts up the local economy. This can, for example, be a homestay programme or the like. We have also raised interest from movie corporations as a filming location, by the way, a sector that can be expanded.

Q: What role does the state and federal government play in promoting Sarawak tourism?

A: As far as the federal part is concerned, there are certain agreement points.  However, in tourism, the focus of the government is sometimes different.  We see our Tourism Board as an enabler, a catalyst, a creator of awareness by marketing the product experience. Big challenges on the state level are, on the other hand, to create infrastructure for conference tourism by building conference centers and other projects where heavy investment is needed. There are multi-leveled tasks to exercise, either on the federal or on the state level.

Q: What do you expect from the ASEAN Economic Community?

A: It will bring a move towards more liberal policies in a common market. And if there is more room, then private investors can be more flexible. It will be a complete change as we are going to move away from restrictions and protection. The market will have free competition where the fittest survives. This can be an opportunity for many operations, but they need to be prepared. We are moving towards a different world, and this needs a different strategy.

Q: What does this mean for the Sarawak Tourism Board?

A: We are also in the midst of transformation towards a high-impact organisation that focuses on the outcome, not on the activity. That’s a major shift. The second part is the transformation of the industry itself. With the open market, there will be a drastic change. If companies in the service sector do not keep pace, they will lose.

Q: What is Sarawak offering for high net worth tourists, e.g. in terms of golf courses, five-star retreats, luxury spas, etc.?

A: We have a range of offers in that segment, but we also have to care about the environment. We only want to cater to people who do not destroy the environment. For that sort of people who want high net worth tourism, we need to have certain regulations. For example, some Chinese visitors like to eat birdnests, but we don’t want to have this commercialised.

Q: What would be your core message to our readers?

A: Sarawak is a land where adventure lives, where you can enjoy a different experience. It’s not like any other place – it’s out of the way. We are a niche destination worth visiting.

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Reading Time: 5 minutes

Dato’ Rashid Khan, CEO of the Sarawak Tourism Board

The Sarawak Tourism Board is the main body to promote the state as a preferred tourist destination throughout the world. Inside Investor asked the agency’s CEO Dato’ Rashid Khan about the challenges of marketing Sarawak and his future plan.

Reading Time: 5 minutes

Sarawak Tourism Board
Dato’ Rashid Khan, CEO of the Sarawak Tourism Board

The Sarawak Tourism Board is the main body to promote the state as a preferred tourist destination throughout the world. Inside Investor asked the agency’s CEO Dato’ Rashid Khan about the challenges of marketing Sarawak and his future plan.

Q: Could you provide some numbers on Sarawak tourism? How many guest arrivals have been counted in 2011, what was the revenue from tourism achieved?

A: We had 3.8 million arrivals in 2011 with a turnover of RM7.1 billion. There was a 16 per cent increase in overall arrivals and 23 per cent in foreign arrivals. This was the best achievement in years, with an exceptional growth in arrivals from Brunei, which is our close neighbour. In fact, for the first time we experienced growth from all tourism source countries. I believe this is the result of our tourism industry transformation programme inaugurated in April 2010 to address the decline after the economic crisis. We managed to narrow the gap by 0.1 per cent in 2010, and in 2011 we had a double digit growth. It was the outcome of a shift in focus from a strategy point of view. We focused more on a consumer-driven strategy rather than on an industry-driven programme as we started to re-image and re-brand Sarawak in 2011. In the past we had culture, adventure, and nature as anchor points to position Sarawak. Now, we put adventure in the focus, with elements of culture and nature. Our media campaign won the gold award at the ITB tourism exhibition in Berlin, Germany. It’s only a matter of the right strategy and using the resources well. In the first quarter of 2012, we also recorded a double digit growth of 14 per cent, with foreign arrivals up by 21 per cent which actually surprises me as flights to Sarawak had been reduced at the end of 2011 after the withdrawal of Firefly and prices of other carriers going up. We were concerned about the accessibility of the island, but the numbers increased anyway.

Q: But flight connections are still an issue. What are your plans in that respect?

A: To address the air accessibility of Sarawak is part of our transformation programme. We are in continuous talks with the airline industry and are selling our destination with quite some success. Newcomers are Indonesian Airlines and Kal Star, also from Indonesia. Recently, we got MASWings, Malaysia Airlines’s low cost carrier, which also added capacity on routes such as Brunei-Kuching and to Pontianak in Indonesia .

Q: What are the main touristic attractions of Sarawak? How would you argue that the state is a must-see destination in Southeast Asia?

A: Flight connections are not everything, the destination has to appeal to visitors. For example through our lifestyle products: the most iconic product of this kind that Sarawak currently offers is the Rainforest Music Festival in July. It is now among the top 25 international festivals globally. We also have the Borneo Jazz Festival, and other events like regattas, surfing competitions, and so on, as well as native festivals such as the Kaul Festival. Apart from that, Sarawak offers a lot of outdoor activities, for instance caving, rafting, climbing, or trekking, and many cultural sites to visit. We also cater, for example, for honeymooners, nature lovers, and the like.

Q: How would you assess the existing tourism infrastructure in Sarawak? Are there enough hotel rooms in the right star classification?

A: There is space for further improvement. It is a chicken-and-egg situation. Right now, as we are growing in double digit figures, it is the right time to address investors. However, the state is huge, and we cannot develop the entire area. We need tourism clusters or a tourism belt in Sarawak, where the industry can be bundled. The gateway to Sarawak and its hub must be Kuching. A secondary hub can be Miri in the north, which opens up to the hinterland, to the rainforest and can be a basis to visit the native tribes. There are many undeveloped areas of interest for investors.

Q: What touristic target groups are you addressing?

A: We are always targeting regional markets and not long haul countries. Since the global economy is not doing well in some places and certain countries are almost going bankrupt, we focus on ten key regions that matter. These are Peninsular Malaysia and Sabah for the domestic source markets, and then Brunei, Singapore, Australia, Indonesia, and North Asia including China, Japan, and Korea. In Europe we look at the region including UK – a very traditional market – Germany, and Netherlands. We found out that a lot of Europeans love adventure and outdoor holidays. However, there is the issue of carbon emission tax in the EU which causes flight prices to rise. Apart from that, we have seen US and Arab arrivals increasing, although from a small base.

Q: What role does MICE tourism play for Sarawak (meetings, incentives, conferences, exhibitions?)

A: It’s complementary. This is handled by Sarawak Convention bureau for promoting MICE, and we are promoting the destination. We market Sarawak as a different experience for businessmen and delegates. But they must love nature and soft adventure. We are not a shopping destination, and we take care of sustainable tourism. Of course we need numbers to grow, but it needs to be well managed. We don’t want to destroy the environment. We want to make use of what we have, and we don’t want to build Disneyland or any other theme park.  We want to climb the value chain, but not commercialise everything. And we also care for the local people as per our social agenda. The locals must benefit from tourism, there should be a rural income left from that industry which, in turn, lifts up the local economy. This can, for example, be a homestay programme or the like. We have also raised interest from movie corporations as a filming location, by the way, a sector that can be expanded.

Q: What role does the state and federal government play in promoting Sarawak tourism?

A: As far as the federal part is concerned, there are certain agreement points.  However, in tourism, the focus of the government is sometimes different.  We see our Tourism Board as an enabler, a catalyst, a creator of awareness by marketing the product experience. Big challenges on the state level are, on the other hand, to create infrastructure for conference tourism by building conference centers and other projects where heavy investment is needed. There are multi-leveled tasks to exercise, either on the federal or on the state level.

Q: What do you expect from the ASEAN Economic Community?

A: It will bring a move towards more liberal policies in a common market. And if there is more room, then private investors can be more flexible. It will be a complete change as we are going to move away from restrictions and protection. The market will have free competition where the fittest survives. This can be an opportunity for many operations, but they need to be prepared. We are moving towards a different world, and this needs a different strategy.

Q: What does this mean for the Sarawak Tourism Board?

A: We are also in the midst of transformation towards a high-impact organisation that focuses on the outcome, not on the activity. That’s a major shift. The second part is the transformation of the industry itself. With the open market, there will be a drastic change. If companies in the service sector do not keep pace, they will lose.

Q: What is Sarawak offering for high net worth tourists, e.g. in terms of golf courses, five-star retreats, luxury spas, etc.?

A: We have a range of offers in that segment, but we also have to care about the environment. We only want to cater to people who do not destroy the environment. For that sort of people who want high net worth tourism, we need to have certain regulations. For example, some Chinese visitors like to eat birdnests, but we don’t want to have this commercialised.

Q: What would be your core message to our readers?

A: Sarawak is a land where adventure lives, where you can enjoy a different experience. It’s not like any other place – it’s out of the way. We are a niche destination worth visiting.

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