Unveiling the Dynamics of Tourism Demand: Insights from Malaysia's Neighboring Countries

Abstract

This study conducted in Malaysia represents a significant contribution to the understanding of tourism dynamics in the region, particularly in relation to arrivals from neighboring countries such as Indonesia, Singapore, and Thailand. Given Malaysia's status as a favored destination for international tourists, particularly from these neighboring nations, understanding the factors influencing tourism demand is of paramount importance. By employing a combination of seasonal unit root analysis, structural break analysis, and multivariate cointegration analysis, this study provides a comprehensive examination of the seasonal and structural dynamics underlying tourist arrivals to Malaysia. The findings offer valuable insights into the nature of tourism demand from these key markets and shed light on the factors driving fluctuations in arrivals over time. One notable finding of the study is the absence of significant seasonal effects on tourism demand from Singapore, Thailand, and Indonesia to Malaysia. This challenges conventional assumptions about the seasonality of tourism and underscores Malaysia's appeal as a year-round destination for travelers from ASEAN countries. Furthermore, the multivariate analysis reveals intriguing relationships between key macroeconomic indicators, such as the real exchange rate and Malaysia's consumer price index, and tourist arrivals from Singapore, Thailand, and Indonesia. These insights provide valuable information for policymakers and industry stakeholders seeking to optimize tourism strategies and enhance the competitiveness of Malaysia's tourism sector. Overall, this study contributes to our understanding of the resilience and attractiveness of Malaysia as a tourism destination, highlighting its ability to attract visitors from neighboring countries despite various economic and geopolitical challenges. By identifying the underlying factors shaping tourism demand, this research lays the groundwork for informed decision-making and strategic planning in the tourism industry, ultimately contributing to the sustainable growth and development of Malaysia's tourism sector.