A new RM5 million (US$1.2 million) tourism fund announced by the Malaysian government is set to provide a much-needed boost for private-sector tourism industry players in their destination promotion efforts, as the country works towards 30 million tourist arrivals for Visit Malaysia Year 2020.

This is the first time that such a fund has been offered, and if it is well received by the private sector, it will likely be continued next year, Musa Yusof, director-general, Tourism Malaysia, revealed at a press conference yesterday.

Based on feedback during ITB Berlin earlier this year, Musa said some European operators had dropped Malaysia from their brochures due to a lack of demand. The low demand could be in part due to the cut in Tourism Malaysia’s advertising budget, resulting in low destination awareness in the market, he said.

The fund, offered by the Ministry of Finance, is a matching grant that can be used in the promotional and marketing efforts – such as the participation in both international and domestic tourism-related events – geared towards wooing and increasing both international and domestic footfall to Malaysia.

The grant works on the basis of reimbursable financial assistance where eligible companies, such as accommodation operators, product operators, integrated resorts, or inbound agents, as well as travel, hospitality and shopping associations and community-based tourism projects, may claim 50 per cent of the actual cost of their promotional project or the maximum amount allowed for each project category.

Projects that are eligible for the reimbursement fall into three main categories: participation in travel fairs and exhibitions, organising of roadshows, and sales missions and business events.

The maximum amount that can be reimbursed for each project is as follows:

For participation in international travel trade and consumer fairs and exhibitions held in Malaysia can claim up to RM5,000 per event; domestic travel trade fairs and exhibitions can claim up to RM5,000 per event; international travel trade and consumer fairs and exhibitions overseas can claim up to RM15,000 per event; promotional programmes for business events in Malaysia can claim up to RM5,000 per event; and promotions for business events overseas can claim to RM10,000 per event.

To be eligible, companies must be registered and licensed in Malaysia, and have been in business for more than a year. Applications are to be submitted 21 days before the date of the programme/activity, and approved projects will receive the grant within 14 days, shared Musa.

A committee within Tourism Malaysia will evaluate applications, and approval will be given by the director-general of Tourism Malaysia or the deputy director-general of Tourism Malaysia.

A ceiling of RM200,000 has also been imposed on each grant recipient to ensure equal distribution of the fund. Entities which have accumulated claims from various projects totalling to RM200,000 will no longer be considered.

Inbound trade players in Malaysia have expressed support for the grant.

Eric Sinnaya, managing director, Morahols Travel, said: “The private sector appreciates such a grant. There are a lot of capable inbound tour operators who are unable to market overseas due to lack of funds. This grant will help in the development of tour operators in the country, especially the smaller players. The catch is that they will have to use their own funds first before they can get reimbursed.”

Malaysia Tourism Council president, Uzaidi Udanis, agreed: “This grant will provide opportunities for small- and medium-sized companies with smaller budgets to market Malaysia internationally. It will encourage more new players to come into the scene, and this means new ideas and new market penetration.”

Mint Leong, managing director of Sunflower Holidays, hopes to use the grant to tap new longhaul markets such as Europe or the US, where marketing costs are much higher than Asian markets.