No guarantees airport levy will boost local tourism

Yasmin Ramlan

Tourists on the cable car platform at Gunung Mat Chinchang, Langkawi. Starting June next year, outgoing passengers will have to pay a levy as part of the government's attempt to boost domestic tourism. – The Malaysian Insight file pic, November 5, 2018.

THE airport levy proposed in Budget 2019, which charges outgoing passengers RM20 and RM40 does not guarantee an increase in domestic tourism, said travel associations.

Passengers, however, are willing to go give it a go.

The government should instead offer interesting packages to improve domestic tourism, said Tan Kok Liang, president of Malaysian Association of Tour and Travel Agents (Matta).

“Passengers are already paying service tax for using the airport services. Now, we have to pay additional charge in the form of departure levy.

“But facilities at airports remain the same,” he told The Malaysian Insight.

During the Budget 2019 tabling on Friday, Putrajaya proposed a departure levy for all passengers on international flights as of June 1, 2019.

The rate involves two categories – RM20 for passengers travelling to Asean countries and RM40 for passengers travelling to other destinations.

Finance Minister Lim Guan Eng said the levy is to encourage development in domestic tourism.

Better products

Tan said the government should promote domestic tourism with better travel packages and setting domestic flight ticket prices.

He said not all passengers are “tourists” as some of them consist of those who are performing their haj or umrah, continuing their studies and visiting their families.

“It will not have significant positive impact on domestic tourism unless travellers are not on extreme budget constraints.

“Malaysian holiday makers have their own dream holidays and imposing an exit tax would not deter them from overseas travel.”

Passengers already pay a service charge but the airport facilities remain the same. It is unfair to add a levy on outgoing passengers, says a travel association. – EPA pic, November 5, 2018.

Tan disagreed with the levy proposal and said if implemented, it was an additional charge to the passenger service charge (PSC).

As of January 1, 2018, the PSC rate for international destination besides Asean at klia2 is RM73, which is a standardised rate at all airports in Malaysia.

Federation of Asean Travel Associations (Fata) executive director Hamzah Rahmat seconded Tan and said it was something that cannot be accepted from the Asean perspective.

What Malaysia has to do is to identify what is implemented by the travel industry and for the tourism ministry to encourage competition with neighbouring countries, he said.

“What have they been doing these past few years, so much so that neighbouring competing countries, such as Thailand, Singapore and Indonesia, are so far ahead.

“Malaysia needs to consider the repercussions and reaction from other countries, too. If Malaysians are curbed from visiting other countries, others can also impose the same and the end result would be further reduction on the arrival figures.”

Hamzah also questioned if the levy would encourage domestic travel activities.

He said what is important is how the country promotes domestic tourism to interesting and worth-a-visit spots.

Exit tax too low

Meanwhile, The Malaysian Insight also interviewed a few Malaysians who often travel abroad.

Most said the departure levy is not a huge amount but doubt it will bring about positive development on domestic tourism.

Farhana Fuad, who often travels to Indonesia, said it would not affect her travels abroad since the amount was not a burden.

“For me, the levy initially would not even help the economy in terms of domestic tourism.

“Instead the government should increase tourist attractions either domestically or abroad,” said the 28-year-old content writer.

Amir Fareed Rahim Amir said it was an interesting move and aimed towards those who travel abroad.

“Besides bringing additional income to the country, this step could generate growth in domestic tourism.

“This move is able to push local tourists to prioritise local tourism destinations,” he said, adding that the charge is reasonable.

Tourists at Wat Arun or Temple of Dawn in Bangkok. Thailand received almost 23 million tourists in the first half of 2018, an 11% increase compared with the same period in 2017 – something from which Malaysia should learn, says the Federation of Asean Travel Associations executive director here. – EPA pic, November 5, 2018.

However, he said the levy might give negative impact on low-cost airlines that have been growing rapidly.

This is because travellers are more cost-sensitive, he said.

“Malaysia’s aspiration to become a competitive regional flight hub will also fall short because the levy is also charged on Asean flights.

“Therefore, this can be seen as a negative development to the commitment to increase Asean connectivity,” he said.

Nurul Najwaa Jaafar said the proposed levy rate was reasonable.

“Travelling is an option and not a necessity, especially travelling abroad.

“It is an expensive option and the rate between RM20 and RM40 is reasonable. It would be different if the levy is RM50 or RM100 and above,” said the marketing executive.

Nutrition consultant Nur Dalila Rahmat, 28, also seconded Nurul Najwaa where she felt that the rate was still “within budget”.

“I do not mind if it is RM20. If it is for something I’m interested in (travelling), I am willing to pay. Plus, I do not have monthly commitments,” said Dalila who often travels to Asean countries.

“But if I feel I could not afford it, I will not travel. If the levy rate is high, I would also think first because the fare is not cheap,” she said. – November 5, 2018.

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