Malaysia tourism not yet hurt by haze from Indonesia
Malaysia tourism not yet hurt by haze from Indonesia
Carolyn Lim, Dow Jones/ Kuala Lumpur
A noxious haze blanketing Malaysia's capital for a week is yet to choke off tourism, but visitor arrivals may fall if forest fires in Indonesia that have caused the sky to turn gray aren't soon brought under control.
Malaysian airlines, hotel and tourism operators say that so far it is business as usual despite air quality in Kuala Lumpur and neighboring cities deteriorating to dangerous levels because of the haze. Other parts of the country remain unaffected.
Prime Minister Abdullah Ahmad Badawi on Thursday declared a state of emergency in two coastal towns near Kuala Lumpur after the air pollution index there zoomed past the dangerous 500- points level. Air quality on Friday in Kuala Lumpur and neighboring towns has remained a hazardous 350-450 points.
The government has said it expects the haze won't cause any lasting damage.
"The haze situation is believed to be temporary and is expected to change within the next few days with the shift in wind and weather conditions," the Tourism Ministry said late on Thursday in a statement.
Still, if the fires continue to burn and the haze remains, the impact on tourism and the economy generally will be more serious.
A similar environmental disaster that was partially a result of forest-burning by Indonesian and Malaysian oil-palm plantation companies, caused an estimated US$9.3 billion in economic damage in 1997.
Kuala Lumpur, with its gleaming Petronas Twin Towers, swanky restaurants and lively nightlife is often the point of entry for the visitors to this Southeast Asian country known for pristine beaches and sumptuous food.
Some 15.7 million visitors spent 29.65 billion ringgit ($7.80 billion) here last year, according to the Tourism Ministry, making tourism the country's number-two foreign-exchange earner after exports. The government expects 16.4 million visitors this year.
There are signs the haze has hurt some tourism-related businesses in the capital.
Sunway City Bhd.'s Sunway Lagoon, the city's most popular amusement park closed its doors Friday after the government ordered schools to shut and people to remain indoors. The park has 20,000 visitors on weekends. Shares of Sunway City were down 3.5 percent at 1.93 ringgit midafternoon on Friday.
Still, Sunway City's hotels near the amusement park are packed, says Sharzede Salleh Askor, a Sunway spokeswoman.
"As of now, we are at full occupancy because of the Middle East visitors," she says, referring to Arab visitors who hit tropical Malaysia in droves to escape the searing summer heat in the Gulf.
Outside of Kuala Lumpur, popular islands such as Penang and Langkawi, and hill resorts such as Genting Highlands, still enjoy clear skies and clean air, limiting the impact of the haze on the overall tourism industry.
"In general, the clear winners (include) Resorts World Bhd. where the air (in its Genting Highlands resort) is still fresh," says Vincent Khoo, research head of local brokerage Hwang-DBS Vickers, in a report.
Resorts and its Genting Bhd. parent are Malaysia's 13th and 11th biggest companies by market value, and the country's biggest gaming companies. Midafternoon on Friday, Genting was up 0.5 percent at 19.80 ringgit and Resorts was flat at 10.50 ringgit.
Occupancy levels at Resorts' six hotels in the highlands are close to 90 percent currently, from an average 80 percent two weeks ago earlier prior to the haze, Resorts Senior Vice President Anthony Yeo told Dow Jones Newswires.
"The air quality (here) is still all right. It has encouraged more people to come up from Kuala Lumpur to escape the haze," he said.
Some players are taking things in stride despite investors' fears of the worst.
Low-cost carrier AirAsia Bhd. is planning promotional events to market flights to haze-free destinations, such as Penang, Langkawi and East Malaysia, according to industry participants.
An AirAsia spokeswoman declined comment, saying it was too early to say what impact the haze will have on bookings. Malaysian Airline System Bhd. also declined to comment.