ii
POTENTIAL OF SECOND HOME TOURISM AS A STRATEGY TO REVIVE FRASER’S HILL AS A TOURISM DESTINATION
GOH KENG CHAI
This project is presented as part of the requirement for the reward of Master of Science in Tourism Planning
Faculty of Built Environment Universiti Teknologi Malaysia
MAY, 2008
iv
DEDICATION
To My Beloved Family & To Those Who Care
v
ACKNOWLEDGEMENT
I would like to extend my sincere appreciation and gratitude to Professor Amran Hamzah who have given me guidance and idea in preparing this project.
Also, I would like to take this opportunity to thank Professor Dr. Zainab Khalifah, Dr. Hairul Nizam Ismail, Madam Norhazliza Abd Halim and Mr. Che Wan for their supportive ideas, comments and guidance for this study.
Nevertheless, a word of thanks also dedicated to Aiza, Efa, JJ, Nazrin, Neng and Nurul for their encouragement and idea in the course of preparing this project.
vi
ABSTRACT
Second home tourism has become an emerging sector especially in the western world and it is increasingly importance in certain region due to its positive impacts to the economic sector and tourism industry. Study conducted in Spain revealed that 70% of the second home ownerships are locals. Second home tourism will be having great potential growth especially in the global level due to the increasing aged population by 2050. In Malaysia, second home tourism is still young and mainly targeting the foreigners through the MM2H programme.
Fraser's Hill, it is truly an idyllic place for anyone to rest and to escape from not only the heat and humidity but also the hustle and bustle of city life. It is one of the prettiest Malaysian Hill resorts with cool climate and proximity to the Klang Valley, which is an ideal retreat for city dwellers. However, it seems not been well perceived either by the locals and foreign visitors in recent years. Seasonality and lack of activities as well as amenities/facilities in Fraser’s Hill had makes it less attractive to visitors during the low season periods due to the shortcoming of its attractions. Tourist arrivals and average occupancy rates of hotels/resorts have declined and tourism industry players have lamented this problem to the federal government. The problems faced by Fraser’s Hill has then tested through the study to implement second home tourism as a potential strategy to enhance the occupancy rate and length of stay by the long-stay guests or second homers especially during the low season periods which will not only stimulate the accommodation sector to operate at economical and sustainable level but also creates another opportunity on the demand growth on local services and facilities which would bring to the better improved facilities and infrastructure and development. This study also investigated the concept/variant of second home and reviewed the success/failure of second home tourism practices in Malaysia.
vii
CONTENTS
CHAPTER
I
CONTENTS
PAGE
DECLARATION
iii
DEDICATION
iv
ACKNOWLEDGEMENT
v
ABSTRACT
vi
CONTENTS
vii
LIST OF TABLES
x
LIST OF FIGURES
xi
LIST OF CHARTS
xii
LIST OF APPENDIX
xiii
INTRODUCTION
1.1
Introduction
1
1.2
Problem Statement
3
1.3
Objectives of Study
7
1.4
Importance of The Study
7
1.5
Scope of Study
8
1.6
Methodology of Study
8
1.7
Chapter Layout
10
viii
II
LITERATURE REVIEW
2.1
Introduction
12
2.2
Seasonality
12
2.3
Second Home Tourism
17
2.3.1
Timesharing as part of Second Home Tourism
19
2.3.2
Second Home Tourism in Spain
20
2.3.3
New Products for Second Home Tourism
22
2.3.4
Second Home Tourism at Hill Area
23
2.3.5
Impacts of Second Home Tourism on Tourism
25
Destination 2.4
The Retirement Market
27
2.5
The Malaysia My Second Home (MM2H) Programme
31
2.5.1
Fifteen Reasons to Retire or Live in Malaysia
35
2.5.2
Responds to the MM2H Programme
35
2.5.3
MM2H and Second Home Tourism in Malaysia
38
2.5.4
Domestic Tourism and Second Home Tourism
39
in Malaysia 2.6
The Accommodation Sector
41
2.6.1
45
The Nature of Demand for Accommodation Sector
2.7
The Concept/Variant of Second Home
47
2.8
Review of the Success/Failure of Second Home Tourism
50
Practices 2.9
Conclusion
52
ix
III
IV
RESEARCH METHODOLOGY
3.1
Introduction
54
3.2
Research Area
54
3.3
Research Approach
55
3.4
Semi-Structure In-Depth Interview Technique
55
3.5
Observation Technique
56
3.6
Secondary Data Compilation Technique
56
3.7
Data Analysis
57
3.8
Interviews Analysis Approach
57
3.9
Designing of Questions
57
FINDINGS AND ANALYSIS
4.1
Introduction
59
4.2
Brief Information on Fraser’s Hill
59
4.3
Socio-economic Situation
61
4.4
Tourism Accommodation Sector in Fraser’s Hill
61
4.4.1
63
The Problems, Causes, Implications and Challenges faced by The Accommodation Sector in Fraser’s Hill
4.5
How Can Second Home Tourism be applied in Fraser’s Hill
72
to enhance the Occupancy Rates of its Hotels/Resorts 4.6
V
Conclusion
77
CONCLUSION
5.1
Introduction
79
5.2
The Role of The Respective Parties in Fraser’s Hill
79
5.3
Limitation and Shortcoming of Study
85
5.4
Final Conclusion and Suggestion
85
x
LIST OF TABLE
Table No.
Subject
Page
1.1
Tourists Arrival Statistics
4
1.2
Average Occupancy Rates of Hotels/Resorts in Fraser’s Hill
4
1.3
Occupancy Rate for Hotel/Resort and Bungalow Residency
5
1.4
Interview Results with Selected Hotel/Resort Operators
6
2.1
Contribution of Second Home Tourists to Spanish Tourism
21
2.2
Motivations of Senior Participants in Leisure Travel
29
2.3
Further Study of the Motivations for Participation in
30
Leisure Travel by Seniors 2.4
Main Criteria of MM2H Application
34
2.5
Number of Silver Hair Programme Participants (1996-2001)
36
2.6
Number of MM2H Participants (2002-2007)
37
4.1
Room Supply of Resort/Hotel in Fraser’s Hill
62
4.2
Summary of Causes, Implications and Challenges
70
4.3
Accommodation Occupancy Trends by Tourists
74
4.4
Duration of Stay by Foreign Tourists in Fraser’s Hill
75
4.5
Tabulation of Tourists at Hotels/Resorts in Fraser’s Hill
75
xi
LIST OF FIGURES
Figure No.
Subject
2.1
Influences on Patterns of Seasonality
14
2.2
Supply-side responses to Seasonality
16
2.3
The Structure of Tourist Accommodation
42
2.4
Hotel Products, segmented by Facilities/Service Levels
43
2.5
Accommodation Structure
44
4.1
Problems, Causes, Implications and Challenges faced by
69
the Accommodation Sector in Fraser’s Hill
Page
xii
LIST OF CHARTS
Chart No.
Subject
1.1
Research Methodology
Page 9
xiii
LIST OF APPENDIX
Appendix No.
Subject
I
Site Plan of Fraser’s Hill
CHAPTER 1
INTRODUCTION
1.1
Introduction
Second Home Tourism is increasingly in demand and has been regarded as an important sector in global level. It has become an emerging tourism sector in a number of countries and is increasingly importance in several regions (Pedro, 2006), and has been attracted renewed interest all over the Western world (e.g. Buller & Horggart, 1994; Kaltenborn, 1997a, 1997b, 1998; Halseth, 1998; Muller, 1999,2002a, 2002b; Williams & Kaltenborn, 1999; Flognfeldt, 2002; Williams & Hall, 2002).
USA is considered one of the countries in the world with largest proportion of second home tourism (Varela et al., 2003). Second home ownership has also become famous in UK which regarded may give positive impacts to the tourism industry. Holloway (1998) in his study revealed increasing disposal income of dwellers in London and South-east Britain has lead to the growth of second home ownership, both within Britain and overseas countries such as Spain, France and Greece.
In Spain, foreign investment in second homes has reached 5.7 billion Euros in 2002 or equivalent to about 90,000 houses with the growth rate of 10 percent annually. Great Britain represented the country that dominated most investors for second home
2 which counted at 35 per cent, followed by Germany (31 per cent), thence France (7 per cent). Italy encountered to 5 per cent whilst The Netherlands registered at 3.1 per cent (Pedro, 2006).
For Malaysia, Second Home Tourism has been initiated through the introduction of Silver Hair Programme in 1996 with the aim to attract foreigners over 65 years to stay in Malaysia. However, this programme was not well perceived by foreigners as it had many restrictions. As an effort to encourage and enhance further second home tourism in Malaysia, the Malaysian government has then introduced the Malaysia My Second Home (MM2H) Programme in March 2002 to replace the Silver Hair Programme to make Malaysia an attractive settlement place for foreign citizens. It is open to foreigners of 18 years old and above together with their dependents from countries politically recognized (except citizens of Israel, Yugoslavia, Serbia and Montenegro) by Malaysia. This programme managed to sign-in 10,226 participants over the last seven years.
Researchers such as Muller (2006) has identified the mixture of environmental aspects such as the rural landscape, existing settlements, lake or river view as well as the distance between the primary residence and the second home will influence the take up rate of the second home in a destination; which could bring to the significant contribution to the local accommodation sector (Nilsson, 2001). The establishment of second homes in the hill areas as described by Muller (2006) is a democratization of hill tourism by allowing a larger number of people to participate in tourism due to growing of leisure time, tele-working and increasing number of retired households. Fraser’s Hill is one of the Malaysia’s hill stations sited about 4,000-foot above sea-level on the Titiwangsa mountain range of Peninsula Malaysia. It comprises seven hills and was developed during the colonial days. It is named after a solitary Scottish pioneer, James Fraser who set up a tin-ore trading post in the 1890s. Fraser's Hill is truly an idyllic place for anyone to rest and to escape from not only the heat and humidity but also the hustle and bustle of city life. It is one of the prettiest Malaysian Hill resorts with
3 cool climate and proximity to the Klang Valley (about 100-kilometre), which is an ideal retreat for city dwellers.
Fraser's Hill is popular with its greenery, forest walks, fresh air and exotic flower landscape within the clock tower area, not to mention the golfing facilities. Bird watching is a very popular event and Fraser's Hill is the venue of the annual International Bird Race which attracts many foreign visitors here. The quaint bungalow-type development initiated by the colonial administration created an image of “Little England” but all this have been changed since 1990s with the development of high rise hotels and apartments as well as golf course. However, Fraser’s Hill seems not been well perceived either by the locals and foreign visitors in recent years. Tourist arrivals and average occupancy rates of hotels/resorts have declined and tourism industry players have lamented this problem to the federal government. The industry players here agree second home tourism could be an alternative solution to resolve the declined tourists arrivals and low occupancy rates of the hotels/resorts in Fraser’s Hill (Goh, 2008).
Therefore, this study will tempt to find out whether second home tourism could be potentially use as a strategy to revitalize the tourists arrivals and the occupancy rates of the hotels/resorts in Fraser’s Hill thence develop Fraser’s Hill as a premier hill resort second home destination in the country.
1.2
Problem Statement Fraser’s Hill has been suffered from declined in tourist arrivals and low
occupancy rates of the resorts/hotels accommodation over the last few years. This can be evident through the tourist arrival statistics tabulated in Table 1.1 below compared to other hill stations in the state of Pahang.
4 Table 1.1
Tourists Arrival Statistics
Destination/ Year 2003 2004 2005 2006 2007 Fraser’s Hill 55,339 81,476 89,068 60,232 50,128 (Nature-based) Cameron Highlands 227,148 280,547 298,284 401,177 300,938 (Agriculture-based) (Jan - Sept) Genting Highlands 2,327,440 3,003,506 3,191,774 5,622,154 4,216,613 (Theme-based) (Jan - Sept) Source: Fraser’s Hill Development Corporation (FHDC) & Tourism Malaysia (2008) Tourist arrivals to Fraser’s Hill has been declined about 17% in 2007 compared to the previous year, whilst the year of 2006 slumped about 32% compared to 2005. These shown that the tourist arrivals to Fraser’s Hill are on the downward trend. Subsequently, the accommodation sector in Fraser’s Hill has been running at low occupancy rate over the last few years compared to other hill resorts in the state of Pahang. The average occupancy rates of the resorts in Fraser’s Hill over the last five (5) years are shown in the Table 1.2 below.
Table 1.2
Average Occupancy Rates of Resorts/Hotels in Fraser’s Hill
Destination/ Year 2003 Fraser’s Hill 25% (Nature-based) Cameron Highlands 45% (Agriculture-based) Genting Highlands 45% (Casino & Theme-based) Source: Tourism Malaysia (2008)
2004 38.6%
2005 42%
2006 34.5%
2007 N/A
45.6%
45.8%
52.3%
N/A
45.6%
70%
85.5%
N/A
In addition, the occupancy rates of the residency premises over the past three (3) years in Fraser’s Hill are tabulated in Table 1.3.
5 Table 1.3
Occupancy Rate for Hotel/Resort and Bungalow Residency
Project / Year Shahzan Inn Pine Resort Puncak Inn Jelai Resort Ye’ Olde Smokehouse Silver Park Resort Tenancy Management Scheme Sold - private use (256 units) The Gap Resthouse (under refurbishment) (Source: Goh, 2008)
No. of Room 93 132 27 40 16
2005 35.3% 31.9% n/a n/a n/a
2006 34.9% 45.2% n/a n/a 65.8%
2007 29.9% 41.4% n/a 9.1% 71.8%
92 units
n/a
n/a
n/a
8
n/a
n/a
n/a
It is vital to note that the 3-bedoom apartment unit at Silver Park Resort which was initially sold at RM250,000 in 1990 has been re-transacted at about RM180,000 in recent years and thus far only three transactions of the unit recorded (Sofia - Silver Park Resort, 2008). This shows that there is no property gain in the property investment here mainly due to low occupancy rate of the accommodation sector in Fraser’s Hill as a result from the declined tourist arrival and length of stay. The site survey conducted by Goh (2008) shows that about 70% of the respondents stay 1 or 2 night(s) in Fraser’s Hill and the rest is excursionist.
The low occupancy rate of the accommodation sector and declined in tourists arrivals and length of stay in Fraser’s Hill are mainly due to lack of critical mass for Fraser’s Hill, which has caused the tourism industry players such as the hotel/resort operators here unable to operate at economical or sustainable level (Amran, 2008). The development of nature based tourism in Fraser’s Hill due to its rich biodiversity has brought this destination famous especially for the bird watching activity and its annual event in June, known as the International Bird Race. Its cool and cozy climate is also well perceived by the city dwellers for weekends and holidays’ retreats. Also, there are few foreigners i.e. from Japan, Australia and Europe whom are staying here for a period of about couple of weeks to two months as the long-stay guest in
6 Fraser’s Hill. Nevertheless, some of the institutions or corporate companies conducted their students/staff training and workshops/seminars here.
However, these activities are mainly taken place over the weekends and school or public holidays. These can be evident from the interviews with selected hotel and resort operators at Fraser’s Hill, the results of which are stipulated in Table 1.4 below:-
Table 1.4
Interview Results with Selected Hotel/Resort Operators
Percentage of Tourists
Shahzan Inn
Weekends, school & 60-70% public holidays (Source: Goh, 2008)
Pine Resort
Silver Park
Smokehouse
Jelai Resort
70%
70%
80%
95%
From the above, almost three-quarter of the tourists visited Fraser’s Hill during the weekends and public and school holidays have caused the occupancy rate of the accommodation sector here registered at low level during low season periods i.e. weekdays. As a result, some of the restaurant and hawker operators in Fraser’s Hill operate their businesses on weekends and school/public holidays only as it is not economical and profitable to sustain the businesses during weekdays or low season periods. Furthermore, site enquiries also revealed that most of them run the businesses on part-time basis. This has caused limited supply and variety of fine dining offer at Fraser’s Hill.
Notably, the effort to fill up the accommodation sector during the low season periods will not only stimulate the sector to operate at economical and sustainable level but also creates another opportunity on the demand growth on local services and facilities thus bring to the increase of local incomes as well as facilities and infrastructure improvement and development. Hence, the study to exanimate to what extend second home tourism can be adopted here to revitalize the declined in Fraser’s Hill as a tourism destination is vital for its sustainability growth.
7 1.3
Objectives of Study
1.
To investigate the concept/variant of second home,
2.
To review the success/failure of second home tourism practices, and
3.
To study how can second home tourism can be applied in Fraser’s Hill to enhance the occupancy rates of its hotels/resorts.
1.4
Importance of The Study
It is vital to investigate the concept/variant of second home in order to exanimate the ability of Fraser’s Hill to accommodate the needs of the second homers. It aims to fill up the vacancy of accommodation sector in Fraser’s Hill so as to allow the tourism industry here to operate at economical or sustainable manner.
The review of success/failure of second home tourism practices will enable us to cross-check whether it could be possibly implemented in Fraser’s Hill to utilize its low season periods.
For second home concepts, it can either involve the purchase, renting or even having a timeshare ownership in property which could enhance the tourism services and property demand in Fraser’s Hill.
Second home tourism in Malaysia still in the infant stage, it requires serious attention of the industry players and government to explore and study the concept of second home tourism on how to implement it in order to overcome the low occupancy of the accommodation sector in hill resorts.
8 1.5
Scope of Study
This study focused on the followings:-
i)
Survey findings done by the researchers related to second home tourism in the oversea countries, and
ii)
Feedback obtained from the stakeholders of the accommodation sectors in Fraser’s Hill i.e. apartment, hotel and resort to analyze their problems, causes and the potentiality of the proposed idea for the accommodation sector in Fraser’s Hill in combating the low occupancy problem.
iii)
Feedback from the locals are also gathered to gauge their opinion on the implementation of second home tourism in Fraser’s Hill.
1.6
Methodology of Study
This study examined on the possibility of implementing second home tourism with the aim to enhance and fill up the low occupancy rate of the accommodation sector in Fraser’s Hill especially during low season periods. Interviews to the stakeholders of the accommodation sectors, the locals, tourists, the MM2H agents will be carried out for the purpose of this study. The primary data of the study will be formed from relevant information and observations related to the study.
The secondary data will be gathered from the literature contained in the related and appropriate articles, books, journals, magazines, etc.
The Research Methodology of this study is shown as Chart 1.1:
9 Chart 1.1
Research Methodology
Problems Statements
Goals
Objectives of the Study
Identify the Scope of the Study
Literature Review
Interview with the related parties namely the resorts/hotels operators, MM2H agents, the locals and the tourists at Fraser’s Hill
Reference to the study and literature review pertaining to second home tourism such as articles, books, journals, magazines, etc.
Data Analysis
Findings of the Study
Conclusion & Recommendation
10 1.7
Chapter Layout
Brief outline of the contents in each Chapter will be elaborated as below:-
Chapter 1 : Introduction
Chapter I will discuss the issues in the study through the support of literature and observation of the second home tourism and low occupancy problem in Fraser’s Hill. It follows by creating the problem statement, determination of the objectives and the importance and scope of the study and described the general idea of the study.
Chapter 2 : Literature Review
This chapter discusses the main issue in the study through the support of the literature as well as other destination situation on the related subject as contained in this study. The theories, idea and concept as well as findings of the experts in the related field pertaining to the study will be explained in this chapter.
Chapter 3 : Research Methodology
This chapter described the research approach applied in the study. This included the methods used to gather the data and to analyze the information to address and report the problems in the study.
Chapter 4 : Findings and Analysis
Chapter 4 presented the findings of this study. Ideas, opinion and comments from all parties involved in the research will be gathered to match the basis in the literature referred to highlight and achieve the objectives of the study.
11 Chapter 5 : Conclusion
This final chapter summarized the outcome of the research analysis to conclude the study. Recommendations will be made to all parties involved in solving the problems as mentioned in the problem statement in this study.
CHAPTER 2
LITERATURE REVIEW
2.1
Introduction
The fact of declined in tourist arrivals and low occupancy rates of the accommodation sector in Fraser‟s Hill has brought to the idea to study on the possibility to implement second home tourism in Fraser‟s Hill. This chapter will present and discuss on the findings and opinions highlighted by various researchers and authors pertaining to the issues and studies related to second home tourism and they are able to tell to what extend the demand of second home tourism and its practices.
2.2
Seasonality
Butler (2001) defined seasonality as a temporal imbalance in the phenomenon of tourism, which may be expressed in terms of dimensions of such elements i.e. numbers of visitors, expenditure of visitors, traffic on highways and other forms of transportation, employment and admissions to attractions.
13 Baum & Lundtorp (2001) put it into two phenomena, i.e. “natural” and “institutional” where natural seasonality is the result of regular variation in climate conditions such as temperature, rainfall, snowfall, daylight and humidity.
Institutional seasonality refers to result of human decisions (e.g. period of religious worship, holidays or pilgrimages as well as school or industrial holidays) which are more widespread and less predictable than natural seasonality.
They further described the institutional seasonality that will affects tourism is the public holiday. This has then expanded into weekends and breaks of longer duration which has caused increasing relevance for tourism and longer distance travel. School and industrial holidays for instance, have dominated greatly to the tourism patterns (Netherlands, 1991). For the case of Fraser‟s Hill, its tourism demand is of “institutional” seasonality where it is mainly crowed during weekends, public and school holidays as well as its annual International Bird Race event.
Seasonality in tourism demand is one of the most consistently vexing policy issues, particularly in the peripheral, cold-climate environments (Baum & Lundtorp, 2001). It gives impacts on all aspects of supply-side of behaviour in tourism which include marketing (packaging, distribution and pricing); labour market (nature and quality of employment, skills availability and sustainability of employment); business finance (cashflow, pricing and attracting investment); stakeholder management (suppliers, intermediaries) and other aspects of operations.
Thus, it is important to develop new markets for the low seasonality periods that are traditionally “down” in terms of tourist arrivals and to enhance the length of stay which could then resolved the low occupancy rates of the accommodation sectors as happened in Fraser‟s Hill now.
14 Butler (1994) recognized that seasonality has frequently been viewed as a major problem for the tourism industry and creating a number of difficulties to the industry, including problems in gaining to access to capital, in obtaining and holding full-time staff, for low returns on investment causing subsequent high risk in operations, and for problems related to peaking and overuse of facilities. It is also been blamed for the under-utilization of these resources and facilities, often preventing tourism being accepted as a viable economic activity in many areas. For Baum & Lundtorp (2001), they see seasonality as a “problem” at policy, marketing and operational levels and it has been regarded as the business challenges to the destinations and business operators which need to be “tackled”. They opinioned there are other factors causing institutionalized seasonality in tourism apart from the legislated holidays. For instance, social pressure or fashion - many locals especially from the Klang Valley area treated Fraser‟s Hill as a weekend retreats destination which named by them as it is a socially necessary to participate in selected activities and visit of certain location.
Londtorp, Rassing & Wanhill (1998) analyze the low season market in order to gain a better understanding of who it is that will travel outside of the main season, again pointing to possible new marketing strategies. Baum & Lundtorp (2001) identified the factors and influences on patterns of seasonality as follow (Figure 2.1):-
DEMAND FACTORS Response to natural seasons Institutionalized holidays Vacation tradition/inertia Changing tastes
SUPPLY ATTRIBUTES Climate conditions Physical Attractions Activity opportunities Social/cultural attractions/events
MODIFYING ACTIONS Differential pricing and taxation New attractions & events Market Diversification
PATTERN OF TOURISM SEASONALITY AT A DESTINATION
Figure 2.1
Influences on Patterns of Seasonality
15 They see the pattern of seasonality in a particular destination is the result of modification by action of the public and private sectors. Butler and Mao (1997) have identified three basic patterns:i)
Single peak seasonality - occurs where the seasonal pattern of demand in a generating region matches the seasonal pattern of attractiveness of a destination, tending to produce extreme seasonality, e.g. in some Mediterranean destinations where the summer peak traffic may be more than time winter traffic.
ii)
Two peak seasonality - occurs where there are two seasons which could attract summer and winter tourists.
iii)
Non-peak seasonality - occur mostly in urban destination like Singapore and Hong Kong.
They further noted the modification of the patterns of seasonality is dynamic where as the attractiveness of the destination has changed, so as the demand in the generating regions.
Therefore, Goulding (2003) suggested the attractions or the destinations to take advantage of wider markets and the „honey pot‟ effect of visitor attraction clusters by accepting and adapting to the seasonal „downtime‟ in proactive way.
Fyall, Leask & Garrod (2001) discussed a number of collective response channels available to visitor attractions include themed marketing initiatives, more formalized consortia to enhance collective purchasing power; active involvement in local tourist board seasonal extension marketing campaigns and involvement in national-level season extension strategies. They agreed that the shoulder or low seasons may offer a natural „space‟ for collaboration compared with peak season.
They also felt that the government should take part in the overall management response to tourism seasonality. The public sector and the attraction specific (supply-side)
16 responses to seasonality as surveyed by Goulding and Hay (2001) are tabulated in Figure 2.2.
Attraction responses
Public-sector policy responses
Adoption of seasonal extension policies and practices: - seasonal pricing - market diversification - product extension/diversification - events strategy - promotional activities - participate in collective promotions (e.g. destination marketing initiatives, travel trade incentive visits)
Adoption of season-extension policies and practices: - fiscal incentives - labour force incentives (e.g. training initiatives) - staggering of school holidays - business support services geared to seasonal extension (e.g. marketing, financial advice) - creation, support or participation in seasonal extension programmes
Acceptance of seasonality: - offer reduced capacity in line with resource limitation (e.g. reduced staffing level) - lower service level (e.g. part closure of non-essential amenities) - full seasonable closure of all facilities - temporary closure (e.g. during lowest revenue periods) - restrict opening/closing times
Acceptance of seasonality: - environmental regeneration initiatives - focus business support on high season initiatives - support off-season community initiatives (e.g. local arts festivals)
Figure 2.2
Supply-side responses to seasonality
It is vital to note that sustaining the destination and its competitiveness during the seasonality periods is key role which needs to be carefully conducted by the stakeholders of the destination together with the collaboration of the public sector for a better and sustainable tourism development in the destinations.
Goulding (2003) regarded the role of the governments and the public sectors as part of the overall management response to tourism seasonality. Nevertheless, publicprivate partnership is one of the important elements to enhance and support the accommodation sector during the low season period in the tourism destinations.
17 2.3
Second Home Tourism
Pedro (2006) defined Second Home Tourism based on two aspects, includes type of tourist dwelling where the tourists stay, which may be privately owned, rented or costfree (visiting relatives or friends). Secondly, frequent return to the same holiday place. Muller (2002b) opinioned that the outskirts of metropolitan areas that allow for frequent access will benefit from second home demand whilst peripheral areas will attract second home owners who have an emotional link to the area.
The second home owners always demonstrate great knowledge of loyalty towards and appreciation of the destination (Hall & Muller; 1993; Dasse & Aubert, 2000). They often make friends or have relatives in the destination they reside and committed to its sustainability. They stay for a longer period where they purchase their house, but obviously less than a year period. Otherwise, they will consider as resident tourists.
The recent research done by IECX, APCE (2002) revealed that among the factors influence the demand of second homes include climate conditions, price, political and social stability, cultural factors, etc.
Pedro (2006) listed the factors contributed to the growth of the second homes:greater confidence in the European Union experience of destinations through frequent visitation the internationalization of the building industry the low profitability of other investments differences in the cost of living the development of no-frills airlines a preference for better climate conditions often associated with the health benefits of living in milder climates an improvement in health services across Europe, and better collaboration between health systems the internationalization of products and retail chains
18 the need for experiencing different places with different cultures.
Many second home owners tend to prefer a second home in the vicinity of the primary residence which allows for frequent visits (Wolfe, 1951; Bell, 1977; Muller, 2002a). Muller (2006) described the components that characterize an attractive second home location are difficult to identify, where the mixture of environmental aspects namely the rural landscape, existing settlements, lake or river view as well as the distance between the primary residence and the second home will influence the take up rate of the second home in a destination.
He further described the purpose-built second homes are concentrated at resorts whilst converted primary residences are more equally spread representing the historical settlement pattern.
Four aspects considered by Pedro (2006) in second home tourism research are:1. The second home tourists, who are very often characterized by a strong affiliation with and loyalty to the destination. 2. Businesses that provide products and services to this market, including the building industry, which is responsible for the construction of private tourist dwellings and a wide range of decorative and household services. 3. The government and local authorities, whose responsibility is geared towards the provision of adequate levels of services and infrastructure. If second home tourism is a dominant sector at the destination, there are special needs and services that must be provided by the planning and governmental services. For example, the process of urbanization, generally depending on local government, requires planning and the provision of land and infrastructure. 4. The host community, which often looks on the sector as being responsible for creating employment. It is also important to consider the social and cultural consequences of the interaction between the local communities and second home owners.
19 He further stressed that this type of tourism implies long-term commitment from the tourists, hence all the stakeholders shall have compatible aims and objectives that derive the peace and benefit mutually. He further urged that the local authorities need to provide a planning framework that ensures coordination of the activities and the optimization of impacts.
2.3.1 Timesharing as part of Second Home Tourism
Timeshare is also considered as another form of second home tourism (Pedro, 2006), but the tourists is not spending long periods of time at that particular destination. It is a scheme whereby an apartment or villa is sold to several co-owners, each of whom purchases the right to use the accommodation for a given period of the year, which may range from a week to several weeks.
The initial cost of the purchased may be vary depending on the period of a year where it may be cost three to four times the cost of the same accommodation in winter (Holloway, 1998). This scheme has successfully toke place in the French Alps in 1965 and spread to USA in the early 1970s and Britain by mid-1970s. This scheme has been boosted to allow owners to exchange their properties for others around the world during their period of ownership.
Goeldner & Ritchie (2003) described there are two basics types of time-sharing: the interval or deeded ownership system and the right-to-use system. Normally the developer or entrepreneur will establishes a time-sharing programme with an older hotel, an apartment house, or a new development designed for time-sharing in popular resort area. The developer may divide the year into 26 segments of two weeks each and sell these to 26 different people, which each of them able to use it for a period of two weeks in a year.
20 Under the right-to-use, the buyer will not hold the title of the property, but holding the right of it for two weeks for a guaranteed number of years e.g. 30 to 40 years. Under a deeded ownership, owners will retain title to a proportion share of the property.
The buyers will have to share the maintenance costs, taxes, and other costs associated with the units by having the following returns:A guaranteed place to stay in a desirable vacation area for many years in the future Shared costs, which may be lower than renting hotel rooms or a vacation house over the period of several years A low initial investment compared to the down payment and monthly payments required to purchase a vacation home or condominium unit A chance to exchange time-sharing units with people who own units in other vacation sites.
Some problems encountered in the timeshare scheme according to Holloway (1998) are:It has been found difficult to resell property, due to the amount of new timeshare property in the market, and In some cases, the management and maintenance fees have been high.
2.3.2 Second Home Tourism in Spain
Study pertaining to the second home tourism conducted by Pedro (2006) revealed that there are very few specific statistics available as most of the dwellings (owned and rented) are private and they are often a non-declared activity. The demand of second home tourism in Spain is determined through data in the Frontur and Familitur statistics.
Frontur is the Spanish Inbound Tourism Survey which offers information about the number of inbound tourists and the characteristics of their trip, including the place where they stay and number of nights stay. Whilst, the Familitur is the Spanish
21 Domestic and Outbound Tourism Survey that provide information about internal tourists and the characteristics of their trips, including where they stay and number of nights stay. The demand of second homes in Spain (Pedro, 2006) is as Table 2.1 below:-
Table 2.1 Tourism (2002)
Contribution of Second Home Tourists to Spanish Tourism
Millions
Percentage
Private Tourism Accommodation (%)**
30
Conventional Tourism Accommodation (%)* 69.4
Inbound International Tourism
51.4
Internal Domestic Tourism
120.4
70
11.8
88.2
Total
172.2
100
12.3
87.7
30.6
* Conventional tourism accommodation includes hotels, rural houses, camping ** Private tourism accommodation includes owned, rented and free houses, etc.
The above result shows that private dwellings play a more important role in the Spanish tourism. However, the author urged that further research on the second home tourism to take into account the followings:the origin of the demand the socio-economic characteristics of residential tourists (age, type of family, income, educational level, etc) the main factors affecting the demand how tourists get information about the destination area the kind of accommodation preferred the relationship between tourism and specific activities (golf, watersports etc) the expenditure and services used.
The survey conducted by Varela et al. (2003) also revealed that some 16 per cent of the total 21 million houses in Spain are of second home and the total number of second
22 home beds available would amounted to about 12.6 million. These incorporated in the tourist apartments, villas, hotels with apartments (aparthotels), and timeshares.
The author commented even there is no specific studies on what kind of product is offering as second homes, or on their characteristics and evaluation over time, but the future research on the supply of second homes shall focus on the followings:the product offered the distribution channels the pricing policy the different legislation affecting the development the effect of the second home tourism on the local economy, housing prices, and the integrated impact on all economic activity and sectors at the destination the services and products that contribute to this market, and the value chains developed within the local economy.
2.3.3 New Products for Second Home Tourism
Pedro (2006) sees golf tourism is one of the most important segments for the developments of second homes where:golfers tend to belong to affluent socio-economic segments and spend considerable time near golf courses golf tourism is related to high-expenditure (high yield) tourism, as the average spend is greater than that in conventional tourism this type of tourism demands a high quality environment, which means integral treatment of sewerage, recuperation of secondary landscape, etc golf is primarily a social activity, with players forming social networks.
Furthermore, golf tourism provides important contribution to the local and regional economy in term of employment, investment, recreational facilities, foreign currency, improvement in the infrastructures, etc.
23 The recent study conducted in USA on second home attributes revealed that most of the respondents are sought by the low maintenance, proximity to shops and restaurants, walking routes and outdoor activities such as hiking and bicycling. However, they were less keen on the private golf courses, tennis courts or nearby ski slopes. What the most importance is the distance, relaxing conditions and pleasant climatic conditions in determining the demand of the second homes (ir.centex.com).
Torres (2003) realizes some of the family will eventually lease the property up to a certain period of years thence only decide whether to purchase or not. This could one of the innovative options to draw-in the potential participants in the second homes.
Pedro (2006) opinioned that there is a need to cater the need of the aged population in the new residential tourism development namely the rest homes, medical support and health services. The author further stressed that the research to establish the demand and supply gaps, product development, impact optimization and carrying capacity levels is critical in order to help politicians and developers to achieve better and rational decisions in the planning and developments of second homes.
2.3.4 Second Home Tourism at Hill Area
Tourism has created opportunities and turn hill areas into prosperous regions (Godde et al., 2000). In Europe, the Alps are fairly benefited from tourism where certain skiing resorts are becoming well-known tourist destinations (Muller, 2006).
In addition, the idealization of countryside and wilderness areas in particular was a result of the increasing urbanization and a growing awareness of the value of the wilderness for heritage and ecology (Hall, 1992; Bunce, 1994) which has resulted tourists in Scandinavian choose to purchase a second home for private use in order to gain access for visits to the mountain range (Jansson & Muller, 2003).
24 The wilderness experiences that can be gained from the remote places include aesthetic appreciation, religion, escapism, challenge, history/romanticism, solitude, companionship, discovery/learning, vicarious appreciation, and technology (Hall & Page, 2002). Jaakson (1986) feels second home tourism as inversion from everyday life appears to be its main attraction where it is not only focus on leisure opposed to work, but also a general relaxation and informality in the second home. It is also has been regarded as a step “back-to-nature” (Jaakson, 1986; Williams & Kaltenborn, 1999) which can be seen as a means to experience wilderness (Muller, 2006).
The second home development and ownerships in the hill areas are not only bringing to the great demand on commercial purposes but also to the exclusively use of the second home owners themselves (Jansson & Muller, 2003) which bring to the significant contribution to the local accommodation sector (Nilsson, 2001). The establishment of second homes in the hill areas as described by Muller (2006) is a democratization of hill tourism by allowing a larger number of people to participate in tourism.
Growing of leisure time, tele-working and increasing number of retired households has intensified demand for attractive living environments such as at hill areas. However, the increase of migration and tourism activities in the hill areas has brought to severe environmental issues (Glorioso, 2000). Hence, the planning and management of the destination such as hill resort needs to be carefully implemented.
As elaborated by Muller (2006), the study on the second home tourism in the hill area of Sweden revealed the vicinity of amenities and concentration of demand on second homes in the hill resort has caused implies of increase of property values. Partly it is simply because second homes in hill area are often purpose-built rather than replacing the existing housing stock as their second homes have to be of cottage or villa. However, he further stressed local level competition can force certain potential second home owners into cheaper areas. On the other hand, Jenkins et al. (1998) and Pettersson (2002)
25 realized that socio-economic decline of such regions entails that tourism is usually welcomed.
In Sweden, Muller (2006) highlighted the ownership of second home in hill area is mainly a privilege rather of affluent and well-educated households, and the second home patterns are related to the urban fields of the nearby urban areas. His study further revealed second homes in hill areas is less expensive compared to the national average level as the demand is greater in the metropolitan and the coastal areas.
However, the study also further explored certain resorts in the hill areas attract highly affluent and educated households converting the resorts into exclusive spaces dominated by alpine skiing. Therefore, the amenity value of the area is mainly related to activities rather than just scenery. Butler (1998) has then listed the modern activities in the countryside which could fit well in second home tourism, or what Sandell (1997) considers as a factory strategy.
2.3.5 Impacts of Second Home Tourism on Tourism Destination
Like other type of tourism activities, the impacts of second home tourism on tourism destination cannot be avoided. The impacts towards the economic, socioeconomic and environmental aspects need to be well determined and analyzed before developing the appropriate policies (Strapp, 1988; Klemm, 1996; Bourrat, 2000). The impacts as ruled by them are:(a)
Economic Impacts It‟s a labour-unintensive tourism, the economic benefits mainly related to the building, decorating and household maintenance industries. Even they have spent lower expenditure in general, however; they inject money into the local economy from their region of origin.
26 Traditional accommodation companies regards this activity as direct competition. Second homes are more affordable, owing to lower levels of services, and are also seen as being an investment for the future. Second home tourists do not pay tourism taxes, and are not subject to the legislation often associated with tourism accommodation. There is a considerable need for land to develop dwellings and infrastructure. The pressure on prices can result in increased cost of houses and land, contributing to inflation in the house and consumer good markets. (b)
Social and Cultural Impacts The relationship between local communities and second home tourists (Girard & Gartner, 1993), where most evident consequences of second home tourism is the segregation of communities by nationalities and conflict of interests. Enclaves of foreigners often enjoy luxurious properties, and may thus create envy in local residents. In addition, the second home tourists will bring their customs and way of living. The relationship of the local communities and the second home tourists need to be managed by the tourists and local authorities in a way that encourages mutual understanding and respect, as well as a certain degree of integration.
(c)
Environmental Impacts Second home tourism demands large quantities of land, water and infrastructure, so environmental impacts may be significant; depending on the demand of the environmental resources based on the type of development. Different kind of urban developments related to tourism are:(i) Extensive development Villas or houses, they need bigger land high basic resources such as water. (ii) Intensive development Multi-storey buildings, they reduce consumption of resources and requires concentration of infrastructure in a limited space. However, negative
27 environmental impacts include violation and visual deterioration of the landscape, as well as concentrating a large number of people in a small area.
As recognized and suggested by Pedro (2006), the needs to assess clearly the resources and kind of development to be carried out in order to maximize its tourism impacts through developing special products and services is importance, as it will determines the capacity of the region and the impacts anticipated, as well as an intensive impacts analysis which should inform the policy formulation and planning process.
The planning system of second home tourism as further reckoned by Pedro (2006) should provide an adequate instrument for influencing the tourism and the housing markets, although it has limitations regarding managing wider growth pressures. Local and national governments are in the critical position in managing the interests of all stakeholders, including outlining the adequate course of action to maximize the benefits of the second home tourism expansion.
2.4
The Retirement Market Life expectancy has increased dramatically in 20th century in most developed
countries (Patterson, 2007). United Nations estimated more than 2 billion people will be aged 60 and older by 2050 where it will account 22% (or one out of five) of the world‟s population, compared to only 10% in 2000. World Tourism Organization coordinator for trade liberalization, safety and health Henry Handszuk ever stated: The number of people over 60 in the traditional tourist generating countries of Europe and North America are expected to outnumber ‘pre adults’ by a third in 2025. The challenge for industry is to properly understand the potential and effective demand of the senior tourism market and to respond by delivering products commensurate with its needs. (Ing, 1993)
28 Older adults can be defined as people aged 65 and older - „pensioners‟ or the „elderly‟, „baby boomers‟ (Gillon, 2004), „the senior market‟ (Shoemaker, 1989), „the mature market‟ (Lazar, 1985), well-off older people (Lohmann & Danielsson, 2001) or „muppies‟ (mature, upscale, post-professionals) (Patterson, 2007).
As a result of ageing well, successful ageing and quality of life are complex issues (Patterson, 2007); solutions need to be provided for older people who required help in overcoming isolation, loneliness, inadequate health and nutritional services, a perceived lack of respect, and feelings of not being valued by their families and communities (Foret & Keller, 1993); this category market segment has growing which will become a challenge for now and in the future (Ing, 1993). The older people has now becoming more „serious leisure‟ where they achieved greater satisfaction and fulfillment from being amateurs, hobbyists and volunteers to keep them busy, make new friends and enhance their older years (Stebbins, 1998). Wei & Millman (1992) in their study revealed the most popular activities participated by the senior travelers are:sightseeing (89.3%) visiting historical places (88.1%) dining (85.7%) shopping (77.4%)
The WTO (2001) expected educational or cultural holidays will increase as older people prefer to take holidays where they learn something new and/or embark on different historical and cultural experiences.
The characteristics that belong to the older group people compared to other age segments of population are:they are the second richest group in the society (Javalgi et al, 1992) they prefer to take longer holiday trips (Eby & Molnar, 1999)
29 stay away from home for a longer time (Eby & Molnar, 1999; Shoemaker, 2000) have a greater concern for personal safety while traveling (Kostyniuk et al, 1997; Shope & Eby, 1998) A study conducted by You and O‟Leary (1999) shows the push and pull travel motivation factors to segment older travelers in UK as follows:Passive visitors (19%): the most dominating push motivation for this group was to visit friends and relatives, while the most important pull forces were good public transportation, good standards of hygiene and cleanliness, personal safety and opportunities to meet and socialize with people. Enthusiastic go-getters (40%): the most important push factors for this group were being together as a family, novelty seeking, knowledge enhancement and escape from demands of home. The most important pull factors included various destination attributes such as good transportation, good standards of hygiene and cleanliness, personal safety and nice weather. Culture hounds (41%): the most important push motivations for this segment associated with cultural and heritage-related activities. Similarly, the most important pull motives were arts and cultural activities and historical or archaeological places.
Shoemaker (1989) listed the motivations of seniors for participation in leisure travel as tabulated in Table 2.2 below:-
Table 2.2
Motivations of Seniors Participants in Leisure Travel
Family travelers
Enjoyed taking short trips with family members and preferred to return to the same destination rather than visit a new one
Active resters
Took holidays for spiritual and intellectual enrichment and to meet people and socialize, to rest and relax, escape everyday routine, engage in physical activities and to visit historical sites
The older set
Preferred to take all-inclusive package tours and to visit resort settings
30 His further study in 2000 revealed the followings (Table 2.3:Table 2.3
further study of the Motivations for participation in leisure travel by seniors
Group Name
Percentage of group
Characteristics of the market segment
Escape & Learn
41.8
A total of 51.2% worked full- or part-time, with medium age of 65 years. This segment had more people in the highest-income category, which helped to explain why they liked to visit new places and experience new things. Members in this cluster sought spiritual and intellectual enrichment, rest and relax, escape the everyday routine, visit historical sites and engage in physical activities.
The retirees
19.3
This group was mainly retired or unemployed with a median age of 66 years. Members of this cluster preferred to return to a particular destination rather than visit new one. They also liked casino gambling.
Active storytellers
34.8
The median age was 62 years, which was the youngest of the three groups. More members of this group had been retired less than 1 year. They wanted to escape everyday routine and to experience new things. They also want to meet people and to socialize with members of the opposite sex. They liked doing physical activities and attending festivals. They sought intellectual enrichment and liked to visit museums and historical sights.
However, there are some constraints in a more examination of why older travelers do not travel as mush as younger travelers (McGuire, 1984):external resources - lack of information, too much planning, insufficient money, lack of appropriate clothing and luggage, and lack of transportation; time factors - no time to travel, they need to work, tourism interrupting normal routine and being too busy doing other things; approval - family and friends would not approve, feel guilty about going on trips and afraid to make mistake by going to a disappointing place; social - spouse dislikes travel, no companion and no interest in going away; physical well-being - no energy, poor health, afraid to take certain modes of transportation and too old or disabled to travel.
31 Older people are now showing greater preference for active living and leading more meaningful lives (Satariano, 1997) and research done by Longino (1992) shows that older people change their housing location due to:self-selection - occurs when people weigh up their quality of life in their current home against the potential destination; selective recruitment - such mountain living location, beautiful beaches and a view of ocean network recruitment - where residents make their community known to their family and friends. Older people are more likely to move if they know someone else in the area who can provide them initial support, encouragement and friendship.
Patterson (2007) opinioned that the older people are now speaking out and modeling positive views, advocating that older people are generally fitter, healthier, more independent and lead more meaningful lives than before. However, research shows that the physical activities in the retirement community are generally low. Nevertheless, many of the active and independent older people in the community care still love to travel, especially with their spouse or family, for longer periods of time ranging from 8 to 21 days, to be adventurous, exploring new cultures and visiting exciting places.
The retirement market as described above is potential to be part of second home tourism if proper planning and development of the destination which cater for these type of tourists.
2.5
The Malaysia My Second Home (MM2H) Programme
The Ministry of Tourism (formerly Ministry of Culture, Arts and Tourism, MOCAT) took over the MM2H programme from the Home Ministry on 1 April 2004 and has setting up a one-stop centre (MM2H Unit) to promote, process and to monitor all matters pertaining to the MM2H programme.
32 MM2H programme (http://mm2h.gov.my) is open to all citizens of countries recognized by Malaysia regardless of race, religion, gender or age. Applicants are allowed to bring along their spouse and children (below 18 years old who is not married) and; they are allowed to bring along a maid or apply for one maid/domestic helper (subject to Immigration Rules and Regulations).
This newer programme contained fewer restrictions compared to the former one. There is no minimum period of stay required. Foreigners who are married to Malaysians are not eligible to MM2H programme but may apply to stay in Malaysia under the Immigration Department‟s “Spouse Programme” or Long Term Social Visit Pass (http://www.imi.gov.my).
Effective 1 June 2007, all MM2H applications are to be submitted through licensed MM2H agents only. To-date, they are about 200 MM2H agents registered with the MM2H Unit.
Under the programme, a 10-year (depending on the validity period of the passport) long-stay Social Visit Pass/Visa with Multiple Entry Visa will be issued to the applicants who meet the criteria under this programme and it is guaranteed renewable unless they have violated the Malaysian rules and regulations. And, it is renewable.
For participants who joined the programme before 1 April 2006, renewal can be submitted directly by the individual participant or through licensed company to Immigration Department, Putrajaya or the State Immigration Office which issue the initial Social Visit Pass.
In the case where those did not received the full duration of 10-year Visa because of the short validity period of their passport at the time of approval and would like to receive the remaining period upon the issuance of new passport, they may present at the Immigration Department to extend the duration of the Visa by changing their passport.
33 The MM2H participants can be investors but they are not allowed to work or employed in the country under this program. However, certain people with special skills may be able to apply for a work permit from the Immigration Department. If they wish to provide their expertise on a voluntary basis, they have to inform the MM2H Unit accordingly.
In addition, they should not participate in activities that can be considered as sensitive to the local people and a threat to the security of the country.
However, people living here under MM2H programme (and other foreigners) can buy properties valued over RM250,000 each in all states, except at least RM350,000 in Sarawak. This minimum level is intended to reduce inflationary pressure on lower cost housing in the country. All foreigners are required to obtain approval from the respective State government and sometimes this can be a slow process, taking up to six months and in some cases longer.
They can have the housing loan up to 80% (subject to credibility) compared to 60% margin for the normal foreign applicants. They are allowed to apply for permanent residency after they have bought a property and putting up themselves here for 10 years.
The MM2H participants can import or purchase a new car (CKD/Locally assembled) tax-free and save up to 30% tax if application made within a certain period. School going children will be given student pass to continue their study at the international schools, private colleges and universities and they should be insured throughout their stay under this programme.
Participants are bound by the policies, systems and regulations of taxes of Malaysia and they do not have exemption qualifications as granted to Diplomatic Missions in Malaysia. However, tax exemption is given to pension remitted into Malaysia. The main criteria for the application of the MM2H programme are tabulated in Table 2.4 below:-
34 Table 2.4
Main Criteria of MM2H Application
Financial Requirements
Individual & Family Applicants
Withdrawing of fixed deposit for approved investments (purchase of houses, medical expenses or children’s education)
Applicants below 50 years old
Applicants 50 years old and above
Fixed Deposit of RM300,000.00 (~US$82,500)
Fixed Deposit of RM150,000.00 (~US$41,250)
AND
OR
Current Monthly Income of at least RM10,000.00 (~US$2,750)
Current Monthly Income of at least RM10,000.00 (~US$2,750)
Up to RM240,000 after 1 year
Up to RM90,000 after 1 year
(must maintain an FD of at least RM60,000)
(must maintain an FD of at least RM60,000)
1 USD ~ 3.6 RM Source: http://mm2h.gov.my
Under the Ninth Malaysia Plan, the government will promote the programme more intensively to garner greater interest among potential participants where the interagency collaboration will be enhanced to ensure smoother implementation of the programme.
35 2.5.1
Fifteen Reasons to Retire or Live in Malaysia (Davison, 2007)
For those who are wondering why they should consider retirement in Malaysia or spending several months a year here, Andy Davison, who has traveled extensively around the world, suggests some reasons:1.
The people are warm and friendly and large number speaks English
2.
The warm weather
3.
The cost of living is low
4.
Economic and political stability
5.
Good infrastructure
6.
The food
7.
Shopping (wide range of good)
8.
The natural beauty
9.
Sports - international sports event i.e. Formula 1, diving in Sipadan
10.
Other entertainment - F&B outlets, modern movie theatres, plenty local festivals
11.
Good local and international communication networks
12.
Safety and health
13.
The location - mix of Asian culture, ease access to other neighbouring countries
14.
Education - international schools
15.
When encourage people to come and live here will also persuade friends and relatives to come and visit. For friends who might not be keen to travel you have the added benefit that Malaysia offers some of the cheapest fares to all corners of the globe. For those who want to purchase a property, local loan is available. Otherwise, short term rentals are provided by some companies too.
2.5.2 Responds to the MM2H programme The development of second home tourism in Malaysia is still in the infant stage. The introduction of MM2H programme in early 2002 and increasing awareness and requirement on second home ownership even for the Malaysian itself will be a better prospect of the growth of second home tourism here. Hence, proper and careful planning and development of the second home tourism destination is needed. The sustainable
36 practices along the development and management process will see greater sustainable performance and impacts for the destination stakeholders. The initiated idea to study whether Fraser‟s Hill is suitable to become the second home tourism destination for both foreigners and locals is relevant due to its‟ cool and cozy climate coupled with the nice greenery as well as its unique biodiversity. As reckoned by Pedro (2006), locations near the seas, lakes, mountains or rural areas are attractive for the second home where it offers a peaceful and environmental friendly holiday home for the city dwellers. The growing of home exchanges and timesharing concept has encouraged the second home tourism in the positive growth path.
In Malaysia, Second Home Tourism has been initiated through the introduction of Silver Hair Programme in 1996 with the aim to attract foreigners over 65 years to stay in Malaysia. However, this programme was not well perceived by the foreigners as it had many restrictions. The number of participants achieved from 1996 until 2001 was only 828 persons as stipulated in Table 2.5 below. Table 2.5
Number of Silver Hair Programme Participants (1996-2001)
Year
1996
1997
1998
1999
2000
2001
No. of Participants
7
18
23
223
257
280
Source: MM2H Unit, Tourism Malaysia (2008)
As an effort to encourage and enhance further the second home tourism in Malaysia, the Malaysia My Second Home (MM2H) Programme has then launched in March 2002 to replace the Silver Hair Programme with the aim to make Malaysia an attractive settlement place for foreign citizens.
This MM2H programme managed to sign-in 10,226 participants over the last seven years. Details of which are tabulated in Table 2.6 below.
37 Table 2.6
Number of MM2H Programme Participants (2002-2007)
Year
2002
2003
2004
2005
2006
2007
No. of Participants
818
1,645
1,917
2,615
1,728
1,503
Source: MM2H Unit, Tourism Malaysia (2008)
The Government does promote the MM2H programme abroad with the hope more and more foreigners would consider to reside in Malaysia as their second home. Thus far, the MM2H Unit is having joint-promotion of the programme together with other Tourism Malaysia promotiuon abroad (Ms. Dayang, MM2H Unit, 2008). The MM2H programme also received good respond from the Korean due to their favour on our multi-lingual, multi-cultural society and great variety of food. Investment is Korean culture (New Straits Times, 24 November 2007) and investing in Korean is much more expensive in Korean. That‟s make Korean invest in Malaysia and Malaysia is their second largest investment destination in property after the United States. Mr. John K.T. Kim who is the Korean Press Director and Head of Property Division indicated that there are some 30,000 to 80,000 of Koreans indicated their interest to coming to Kuala Lumpur! He further highlighted that the Korean investment will normally on bulk-basis. He suggested that the Malaysia government will promote the MM2H programme more aggressively to the Korean market than just via seminars. He is certain with the interest of their people to come and invest and stay in Malaysia. The Japanese and Middle East are also aiming the MM2H programme, as below:1.
Malaysia Ranks as Top Choice for Long-stay Programs (November 14, 2007) http://www.mm2h.gov.my/doc/1.doc
2.
More Japanese to call Penang their home (October 4, 2007) Source: New Straits Times, Malaysia
3.
Al Rajhi to help promote Malaysia My Second Home (August 16, 2007) http://biz.thestar.com.my/news/story.asp?file=/2007/8/16/business/20070816143925&sec=business
38 4.
Kuwait Finance launches MM2H service programme (July 10, 2007) http://biz.thestar.com.my/news/story.asp?file=/2007/8/16/business/20070816143925&sec=business
5.
More Japanese keen on MM2H (March 24, 2007) http://thestar.com.my/news/story.asp?file=/2007/3/24/nation/17228115&sec=nation
2.5.3
MM2H and Second Home Tourism in Malaysia
Thus far, the MM2H Unit of Tourism Malaysia is mainly in-charge on the application of the potential participants submitted by the MM2H agents and the MM2H Unit will promote the programme as and when there is a promotion exercise carried out by Tourism Malaysia either at the local level or abroad. There is no planning or fix schedule of the promotional of the programme which needs to be carried out as well as the targeted number of participants to be recruited for the benefits of the tourism and property development sectors.
The decision of purchase or renting/leasing of property by the MM2H participants could be “influenced” by the agents as they are the most reliable person to the participants when deciding the purchase/rental of the property during their stay in Malaysia. Hence, the role of the MM2H agents has also being “extended” in the recommendation of houses/property to the MM2H applicants.
The government should take the advantage of the professional services offer by the registered estate agents in the country by fixing up the regulation to ensure all property transactions for MM2H programme to be undertaken by the registered personnel. This is to ensure highest level of competence services in estate agency services to be provided to the MM2H participants.
This is a crucial and vital part needs to be seriously considered by the government as the impact to the economy and the benefits to the locals from the second home tourism activities as described by Strapp, (1988); Klemm (1996); Bourrat (2000) and Andy (2007)
39 will be great. It is also important to note that the promotion of second home tourism will give the government a very cost-effective way to promote both the tourism attractions in Malaysia as well as greater exposure and benefits of the property sector.
A survey done by the Expat (a monthly expatriate magazine and its website) (Davison, 2007) revealed that each MM2H household spent about RM118,000 a year on living expenses in Malaysia. The author of the magazine and website presumed if MM2H can achieve 28,000 households (50,000 applicants) in 10 years, the economic contribution by them from foreign exchange could achieve RM3 billion a year. It is certainly a substantial amount to be harvested if the programme to be properly planned and implemented.
The same survey also learnt the economic contribution by the expatriates (including the MM2H participants) where 83 percent of them committed property purchase in Malaysia each with an average of RM830,000. The above shows significant contributions could be gained from the second home tourism which will benefit both the tourism and property sectors. Its impacts towards the local economy, for accommodation stakeholders they are benefited in term of higher occupancy rates, better economic benefits to local residents and greater tax revenues for local governments.
Hence, a proper planning and implementation of the MM2H programme is needed in order to achieve its success and bring great benefits to the both tourism and property sectors development in Malaysia.
2.5.4 Domestic Tourism and Second Home Tourism in Malaysia
Improved economic situation, increase in disposable income as well as leisure days have promoted domestic travel in general (Badaruddin, 2005). Surveys done by the tourist office indicated that the over 50% of the hotel bed-nights were occupied by domestic tourists (Cockerell, 1994). Weaver and Oppermann (2000) highlighted the number of domestic tourists taking vacations is more massive compared to the
40 international tourists in most countries and even on global level. Even the definition of domestic tourism has not been widely accepted (Inskeep, 1991), the World Tourism Organization (WTO) has defined domestic tourism as any person or resident of a country visiting his own country or traveling to place within his country other than his usual residence for a period not less than 24 hours or one night but less than one year for the purpose of recreation, leisure, holidays, sport, business, meetings, conventions, study, visiting friends or relatives, health, mission work or religion (Chadwick, 1994).
For Malaysia, a study conducted by Universiti Kebangsaan Malaysia (1999) defined domestic tourism as “any person residing in Malaysia regardless of his/her nationality who travels to a place at least 40 kilometres away (one way) from his/her usual place of residence for at least one night or less than one night for any reason other than following an activity remunerated at the place visited”.
Despite the fact that the tourism industry of Malaysia has given priority to the international markets since its infancy in 1960s (Badaruddin, 2005), the government has then realized it is important to develop the domestic tourism after the stiff competition and uncertainties in the global economy especially in the traditional markets i.e. USA, Japan, Europe and Australia. Great support promotions from the local airlines namely Malaysian Airlines System Berhad (MAS) and Air Asia have resulted in positive domestic tourism development.
However, study in the second home tourism for domestic tourists has not been aggressively conducted in Malaysia. In fact, it is timely to look into this area as we cannot solely depending on the international markets in the second home tourism as described above. Our locals would also keen on the second home tourism concept implemented under the MM2H programme especially those city dwellers who would want to find a cozy and quiet place as their weekend homes. This can bring to the introduction of second home ownership either through selling or leasing or timesharing of property in the destination favoured by the local tourists e.g. hill resort like Fraser‟s Hill.
41 The MM2H programme should be promoted aggressively with the right approach at all levels given its huge potential and contribution to the economic of the country as well as the impacts of the property sector here. It is also important to note that the second home tourism and it related studies especially in the hill area are crucial and vital as we are rich in the natural, human and cultural resources which could have a great potential for development of second home tourism. We may not solely depend on the foreigners in the second home tourism as evidenced by the second home tourism study in Spain. The local tourists may give a great potential demand in the second home tourism in any country, including Malaysia.
2.6 The Accommodation Sector
Under the components of tourism development (Inskeep, 1988), accommodation has been regarded as one of the basic components in a tourism plan which referred to the hotels and other types of facilities and their related services where tourists stay overnight during their travels. Others components in a tourism plan include the tourism attractions and activities, transportation, other infrastructure, institutional elements as well as other tourist facilities and services which derive from the natural and socioeconomic environment of the destination.
According to Kelly & Nankervis (2001), the development of accommodation in a destination will attract long-stay visitors, provided the reputation of a destination can be enhanced by the level of service offered by the accommodation providers. It is rather crucial beside the external factors e.g. attractions and activities of the tourism destination to ensure the competitiveness of success of the destination.
Baum & Lundtorp (2001) see added value, product variation and pricing incentives as some significant successes that could be used to spread the demand of the accommodation sector throughout the year by applying such strategies.
42 The accommodation or lodging sector is a dominant industry within the travel industry (Gee, makens & Choy, 1997). There are varieties of accommodation used by tourists e.g. hotels, tourists‟ own camping, caravanning equipment, privately owned boats and second home (Holloway, 1998). Goeldner & Ritchie (2003) named others like paradors, pensions, resort condominiums, time sharing, youth hostels, elderhostel, health spas, and hoslistic learning centre as alternative form of accommodations.
Holloway (1998) describes the accommodation sector comprises the sleeping and hospitality facilities, which can be conveniently categorized as serviced (in which catering is provided) or self-catering. He has further created an at-a-glance guide to the range of accommodation which to be occupied by the tourists namely the commercial sector and quasi/non-commercial sector as provided in the Figure 2.3 below. Commercial Sector
Serviced
Self-Catering
Hotels (Licensed/Unlicensed) Motels, Private hotels Guesthouses, Farmhouses
Caravan and campsites Villas, apartments, chalets Hired motorhomes
Holiday centres, villages, camps Cruise ships
Hired yachts
Quasi / Non-Commercial Sector Serviced
Youth hostels YMCAs
Serviced Private caravans, camping Private motorhomes, yachts Home exchanges, Timeshare, VFR Second Homes
Educational Institutions
Figure 2.3
The Structure of Tourist Accommodation
43 Gee, Makens & Choy (1997) explained there are few classification of hotels, namely by location - city center, suburb, airport, highway or destination resort, by type of property or product - casino hotel, convention hotel, or all suite hotel. The classification of hotels in U.S. is as illustrated in Figure 2.4 below.
U.S. Lodging Industry
Figure 2.4
Full-Service
Limited-Service
Casino Hotel Mid-Tier, Core-product Luxury Hotel Boutique Hotel Resort Spa Hotel Convention Hotel Conference Center All-Suite
Club-Court Hotel Economy Hotel Microtel Residential Hotel Condo Hotel All-Suite Bed and Breakfast
Hotel products, segmented by facility/service levels
(Source: PKF Consulting) On the other hand, Goeldner & Ritchie (2003) given the accommodation structure as in Figure 2.5. They further explained many lodging places provide meeting rooms, convention facilities and services, restaurants, bars, entertainment, gift shops, gaming, health clubs and other activities and services.
44
Accommodations
Noncommercial
Private
Nonprofit
Private Homes
Hostels
Commercial
Nonprofit
College/ University
Shelters Home Exchange
Figure 2.5
YM/ YWCA
Spas & Health Facilities
Hotels
Upscale Resort Hotels Midrange Economy Suite Hotels Spa Meetings & Convention Hotels Casino Deluxe Luxury Extended Stay Budget Airport Hotels
Motels
Bed & Breakfast
Upscale Midrange Budget
Accommodation Structure
The development of mass tourism has contributed to the large chains and corporations venture into accommodation sector with few major companies penetrate into international market through the franchise concept (Holloway, 1998), and; it has been regarded as a success method for expansion as performed well by the international brand such as Holiday Inns. Nonetheless, he further elaborated that most of the giant brand has start diverting their target into different market niches. Take Holiday Inn for instant, they have now offer Crowne Plaza brand for its global „upper-middle‟ market, its Express
Time-Share Facilities
45 brand for the „upper-economy‟ US middle market and its Garden Court brand for the „upper-economy‟ European middle market. He further stressed that, hotels that can offer attributes that are unique to the country visited are enjoying much greater popularity.
Holloway (1998) noted that tourists are not only interested in what different grades of hotel offer in the way of facilities, but also the quality of the accommodation and catering offer to them. Hence, it is important to distinguish the 3 terms stipulated below:(b) Categorization - refers to the separation of accommodation by type, that is, distinguishing between hotels, motels, boarding houses, guesthouses, etc. (c) Classification - distinguishes accommodation on the basis of certain physical features, such as the number of rooms with private bath or shower, etc. (d) Grading - identifies accommodation according to certain verifiable objective features of the service offered, such as the number of courses served at meals, whether 24-hour service is provided, etc. However, none of the above have refers to the assessment of quality where only subjective evaluation involved as a result of standards, particularly can change rapidly over time.
From the above, it is noted that second homes and timeshare have been regarded as part of the important accommodation components in tourism.
2.6.1 The Nature of Demand for Accommodation Sector
The considerations in choosing a hotel accommodation by tourists are:(a) The location (resort for the holidaymaker, convenience point for the traveler, city for the business traveler). Should the resort lose its attraction for its visitors, thence the hotel will suffer an equivalent decline in its fortunes. (b) Its mix of facilities (bedrooms, restaurants, other public rooms, function rooms and leisure facilities) (c) It image
46 (d) The services it provides (level of formality, personal attention, speed and efficiency of its staff), and (e) The price which it is prepared to change.
Holloway (1998) also explained that the demand of hotel bedrooms will come from the national and international markets. Hence, its characteristic is highly localized as a result of widely distributed market and different market segment which required the hoteliers to use different marketing technique of advertising, promotion and distribution. Other characteristics of hotels are seasonality where the business is slow during the low season periods, perishable of the hotel product which cannot be „store‟ and sell later.
There are now more traditional hotels responded to the trend of change by retaining the style of yesteryear, emphasizing their traditional values and style while incorporating the modern features. This can be referred to the good example of Raffles Hotel in Singapore which successfully blended modern comforts with the traditional architecture and of the colonial era. Some of hotels have even „theme‟ their hotels to distinguish them from others, either through the style of architecture or their interior decoration. These have becoming a new approach for the expensive hotels around the world which has lead consumers to seek something different in their sleeping arrangements. Holloway (1998) further explained that accommodation is more than just a „room to sleep in‟ where total leisure experience, comprising a range of different services and emotional experiences which together go to make up the holiday or business stay.
On the occupancy level, the enhancement of the occupancy as quoted by him is to improve marketing including min-breaks, themed events, has helped to extend sales in the „shoulder‟ months of spring and autumn which make the holiday centres insignificant anymore. Hence, it is notably crucial to enhance the occupancy rate of the accommodation sector in any particular destination.
47 Those owning their private apartment or villas abroad will also contribute to the tourism spend of the region, especially through their spending on local travel and entertainment (Holloway, 1998). Those investors who have bought tourism property for instance, will be contributing to the local economy in term of capital investment for the property purchase as well as other spending such as repair and maintenance, household expenditure, made services, etc which will certainly bring a good economic impact to the locals.
No doubt, the destination chosen for traveling for most travelers are depending on their desires and expectations (complimentary), which needs to be balanced against the costs incurred in visiting it (transferability) (Kelly & Nankervis, 2001). Nevertheless, the contribution of the accommodation sector in a destination should never be neglected as it is one of the important components of a destination.
Hence, the proper marketing and management of the accommodation as well as the destination by responding to the changing patterns and demand over time through understanding the nature of demand is vital.
2.7
The Concept/Variant of Second Home
Based on the literature reviews quoted above, it is important to note that the studies or researches who study on second home tourism revealed that research or study on second home tourism need to be actively and widely explored. They see great potential of growth of this sector in the coming years.
The available reading materials or literature reviews on the concept/variant second home is still new and it could be progressively defined and determined in time to come. Thus far, the concept/variant determined by the researchers in the field are as follow:-
48 The second home tourists can be locals or foreigners - In Malaysia, the concept of second home tourism is mainly under the MM2H programme which concentrate on foreigners. However, the experience in Spain revealed that 70% of the second home tourists are the locals. Hence, the tourism strategy by the Malaysian government should also pay attention to the locals where they could form part of the second homers. The second home tourists will stay at the destination either through the purchase, renting/leasing of property or even stay at cost-free (visit relatives and friends) their attendance in any form as mentioned above will bring benefits to the economy at the local and national levels. timesharing is also forming part of second home tourism - this type of investment might not be very expensive to those who tend to experience the scenery of a country or destination which is more expensive/unaffordable to purchase the property at the destination. the second home tourists will frequently return/visit to the same destination - due to the proximity of the second home destination and the primary residency, and also due to the emotional link to the destination by the second homers. the second home tourists always demonstrate great knowledge of loyalty towards and appreciation of the destination - they always make friends with the locals and commit to the sustainability of the destination. the second home tourists also comprise the retirees (who is the second richest in the society) - this group of people has great potential from now on and in time to come where they like visit new places and to learn new things i.e. cultural and giving their experience by teaching the locals on certain aspects of skills and experiences. the second home tourists will imply long-term commitment to the destination where they will derive the peace and benefits mutually together with the locals to achieve the common aims and objectives. the second home tourism practices could also cater for the medical/health tourism in the form of nursing home - hospitalization technology advantage and cheaper living cost are the main factors to push up this type tourism in certain destination.
49 By applying the nursing home concept in the second home tourism, it could be enhance further the tourism activities such cross-border tourism where the friends and relatives would also visit the second homers in a destination. the hill area/resorts could be the second home destination due to its wilderness, escape/retreat destination and tranquility etc - this has become popular in certain area in the western country due to the priority of human need towards the greenery and for the escape purposes from the city life.
Second home tourism is an important sector in the year to come where almost 20% of the world population will be above 60 years old by 2050. The Malaysian government should take the opportunity to look into planning and development of the second home tourism where the foreign experience teach us that the locals also can contribute to the development of second home tourism like what is happening in Spain, the ration is much greater compared to the foreigners.
In promoting the MM2H programme to the foreigners, the government should also take the necessary measure to plan second home tourism programme to the locals where it could incorporate the nursing home, timesharing or even medication/health tourism concept for the locals in line with the global trend. Thence, the perception and acceptance of the local community in term of communication and contact can be catch-up through the contact with the locals then gradually shifted to the foreigners. This would gradually avoid the cultural shock that could be happened and to ensure the second home tourism with multi-society/nationality to be successfully implemented as some of the local community has yet to open themselves to the western tourists. The Malaysian concept/variant could then be then created and promoted. With that, more sustainable second home tourism practices could be implemented in Malaysia in good time.
Nevertheless, more research and further study in this area need to be seriously and carefully conducted as it is not only helping the tourism and hospitality industries but also the property development and management sectors that professionally required under the implementation in the tourism practices.
50 2.8
Review of the Success/Failure of Second Home Tourism Practices
Further to the above explanation, second home tourism have been widely exposed and implemented abroad. In the case of Malaysia, second home tourism has first introduced through the implementation of Silver Hair programme then come to the existence of MM2H programme. As described in the previous section, the potential of the locals contribute to the market share of second home tourism in Malaysia has yet to be determined and explored by the Malaysia government. Their contribution to the local economy is great as they required different types of services and skills to fill up the second home needs and practices in a destination. Meanwhile, the local community can also start to accept this type of tourism and at the same time to train up themselves to accept and to keep in touch with the foreign tourists where some of them don‟t at the moment.
The research and study of second home tourism in Malaysia need to be further explored and expanded. The present MM2H programme has yet to achieve its full potential and economic of scale as its contribution to the economy and the development of tourism and property industries has not been great due to no proper planning and implementation of the programme. For instance, we have no record on where the second homers to be allocated and what type of property they preferred to purchase, rent/lease or even on time sharing basis? These are important elements to be considered and planned, as quoted by Davison (2008) of the Expat Group, the economic benefits to the tourism receipt and property development would be great as most expatriates will spend great sum of monies into household expenses annually and property purchase in Malaysia.
However, the number of achieved MM2H participants received by Malaysia has not been great thus far due to lack of promotion budget, planning and implementation either in the local or global levels. More foreign market could be tapped i.e. the Korean and Europe markets. Collaboration among the tourism and property players together with the supportive move of the government is vital.
51 In addition, the role of the industry experts such as tourism planners and property consultants/real estate agents to determine the right and favourable development which cater for the right target second home group is also crucial to ensure the sustainable growth of the second home tourism.
Presently, the marketing and application of MM2H participation by foreigners in Malaysia is solely promoted by the MM2H agents. Although they have been required by the government to submit their proposal on the marketing concept of the programme should they are given the agent‟s license, but; in the real practice world how they bring in the foreigners to join the MM2H programme and where do they recommend them to reside and the professionalism and the code of conduct of the practices have not been tightly enforced and implemented.
Constance attendance the upgrading programme by the MM2H agents such as the continuous professional development (CPD) programme should be conducted by the MM2H Unit to ensure the agents‟ ability and progressive effort to help the government to enroll more foreigners to Malaysia. Meanwhile, the government should also review the MM2H agents‟ performance constantly and to terminate the under performed or disqualified agents. This is to ensure the highest level of professional services being granted/offered to the MM2H participants.
Nevertheless, the government should look into the practice of second home tourism by planning and encouraging more local people to join the programme. This will not only reduce the economic leakage but also to promote the local tourism more effectively and at the same time to enhance the use and occupancy of the property or accommodation sector in certain destination. Take Fraser‟s Hill for instance, the occupancy rates of the accommodation could be easily fill-up should the government give the full support to the relevant departments and to encourage them to carry out the second home programme for the locals. The support of the government is not only in term of promotion and marketing, but also to the planning and development of the destination
52 that would be able to cater for the requirement and needs of the second homers such as amenities and facilities.
We can learn from the Spain experience where local market is greater in second home tourism with 70% of the locals owned second homes in the country. The USA research also revealed that the aspects of the needs and requirement of the second homers could be different than that expected. Hence, the research study into second home tourism in Malaysia should also be seriously studied and addressed due to its great potential to the economic, tourism and property developments.
Nevertheless, the supply and service quality of the second home service provider or the destination should be greatly enhanced in order to let the second homers feel the experience that could never be forgotten thus keeping them come back to the same destination which would greatly enjoying the repeat customers for the destination.
In short, there are lots more to be learnt by all of us in promoting the second home tourism in Malaysia. The mechanism and structure of implementation of second home programme as what we are having and experiencing now need to be reviewed as the author sees no great performance being obtained after so long implementing the programme. It should take into account the potential of the local market by collaborating with the local tourism destination in the promotion and marketing of the second home programme which aims to enhance and enroll further the local second homers.
2.9
Conclusion
Second home tourism will be having great potential growth especially in the global level due to the increasing aged population by 2050 where about 20% of the 20 billion of the world population will be aged 60. The demand of second home or some of the researchers named it as retirement home will be in the escalating path.
53 In term of facilities and specification of the accommodation required by the second homers, more research and survey is needed either in the global level or locally in Malaysia to determine the aspects that they favoured as well as the planning and development aspects of the tourism destination are in line with the trend of the second home tourism market nationally and globally.
Second home tourism development in Malaysia still young, the MM2H experience revealed that Klang Valley especially Kuala Lumpur is the most favourable destination reside by the second homers, followed by Penang and Johor. Hill resort area such as Cameron and Genting are the most preferred settlement locations by the MM2H participants (MM2H Agents, 2008). The stakeholders of Fraser‟s Hill namely the hotels/resorts operators, the government‟s related departments as well as the locals should take the advantage of its comparative factors such as the cool weather and the relax and tranquility environment of Fraser‟s Hill to promote the destination greatly as a second home destination especially to the retirement market, which described by various researchers/authors that could woo and enhance the second home tourism in a destination.
CHAPTER 3
RESEARCH METHODOLOGY
3.1
Introduction
This chapter aims to explicate how the research of the study has been carried out. It represents the most important part of the study as the information or result obtained from the research will be used to proof and examine the problems statement and objectives that have been laid out in this study.
3.2
Research Area The author has chosen Fraser’s Hill as the research area due to its declined and
low occupancy rates of the accommodation sector of its resorts/hotels and decline in tourists arrivals and length of stay of the tourists especially during the low season periods. In addition, after few round of conversations with the stakeholders of Fraser’s Hill, the author feels that the destination could be the suitable location for the second home tourism study. Nevertheless, the cool weather and the relax and tranquility environment of Fraser’s Hill which could be the ideal residing destination for the second homers especially the elderly.
55 3.3
Research Approach
The study is a descriptive research (Veal, 1997) where author finding out and describing what is, which is also referred to as exploratory as it seeks discover and describe. This research has been conducted based on the Qualitative Approach where it often makes knowledge claims based primarily on ‘constructive’ perspective and inclines to be used to establish the meaning of phenomenon from the views of participants. Patton (2002) notes that it facilitate study of issues in depth and detail. Approaching fieldwork without being constrained by predetermined categories of analysis contributes to the depth, openness and detail of qualitative inquiry. It involves open-ended questions, emerging approaches, text or image (Creswell, 2003). The research techniques included interviews to the selected stakeholders of the resort/hotels and site observations to the whole area of Fraser’s Hill.
3.4
Semi-Structure In-Depth Interview Technique
This technique allows people to talk about their experience which could be used to formulate the data that full with description (Phillimore and Goodson, 2004). The qualitative research approach allows the author act as a reporter where all interview questions posted to all the interviewees will be answered and will be reported accordingly, and; they would ensure the interviewer understands their situation clearly. This technique will allow the author to gauge the real situation or problems faced by the interviewees in the destination based on the data collected. Under the research of this study, the author has selected few parties that related to the issue highlighted in the study, among others the individual that involved in the study include:Mr. Mokhtarruddin Khalid - Resident Manager, Shahzan Inn Mr. Jason Netto - Senior Resident Manager, Pine Resort Mr. Ahmad Nizar - Manager, Silver Park Resort Mr. Hafis - Manager, Ye’ Olde Smokehouse Mr. Dalwis - Manager, Jelai Highland Resorts
56 Mrs. Leong - Silver Park Apartment owner 30 local residents
They have been selected for the interview of the study as they are the main players of the accommodation sector in Fraser’s Hill and they understand the situation clearly as they are the winners/victims at the end of the day if the destination managed/failed to be developed and managed properly. It could be chance to study their present and future capabilities should the second home tourism to be implemented here actively. In addition, Mrs. Leong could be the person who can witness and cross-check the information/data collected from the hotel/resort operators. Nevertheless, the 30 local residents could be the witness of whether Fraser’s Hill can be the destination of second home tourism.
3.5
Observation Technique
This method is to examine the real picture/situation of the management status of the destination which encompasses of the planning, development and maintenance of the facilities and services by the accommodation stakeholders and relevant authorities in Fraser’s Hill.
3.6
Secondary Data Compilation Technique
It forms an important part in the research process where supportive data such as previous research findings and facts could be used to support and describe the study. The secondary data could be gathered from publication, articles, journal, newspaper cuttings, books, internet etc which incorporating the sources that could be referred, described and analysed the study topic.
57 3.7
Data Analysis
All data collected will be analyzed to test the hypothesis and to conclude the identified objectives. The data on the perception and possibility on the implementation of the activities at Fraser’s Hill will be presented in table format. The contribution of literature review as quoted in Chapter 2 will also be discussed to support the data collected from the site observations.
3.8
Interviews Analysis Approach
This analysis will be based on the approach structured by Ritchie and Spencer (1994) where it has been defined as detection, defining, categorizing, explaining, exploring and mapping the data collected through the interview so that a general summary can be achieved thence the data will be arranged according to thematic framework.
3.9
Designing of Questions
This is a very detail and complicated stage where the researcher has to make sure all the answers received which cover all aspects of the study and would achieve the problem statement and objectives of the study.
Among the questions asked to the selected accommodation stakeholders are stipulated as follows:1) What are the reasons that caused low occupancy rates at Fraser’s Hill for the past 5 years?
58 2) What are the suggestions/solutions that possibly could resolve the low occupancy rate and declined of tourists’ arrival to Fraser’s Hill?
3) What are efforts being made by your good Resort to enhance the length of stay of visitors at Fraser’s Hill?
4) In your opinion, what area the activities that need/could possible carried out in Fraser’s Hill in order to resolve the above problems?
5) Do you think Second Home Tourism will be a good option to resolve the above problems? Yes
(
)
No
(
)
Why? What about retirement market and events?
6) What are the packages that could probably organized by your good Resort in line with the aggressive promotion of the Second Home Tourism by the relevant Department? 7) What are the improvements that need to be done by the relevant authorities in order to sustain and enhance the tourism activity, especially with the introduction of second home tourism in Fraser’s Hill?
8) In your opinion, what are contributes needed from the local residents in order to make the second home tourism at Fraser’s Hill a success as it will involve greater interaction among the local community and the long stay visitors? Hence, conflicts to be avoided.
9) Another other activities that you think most possible to be implemented especially during the low season at Fraser’s Hill?
10) Your other valuable comments and opinion on the topic of this study for the good of Fraser’s Hill?
CHAPTER 4
FINDINGS AND ANALYSIS
4.1
Introduction
This chapter analyzed the data collected through the interviews and site observations in Fraser‟s Hill. The information from the secondary data such as books, journals, articles etc will be applied to support the analysis thus bring to the finding of the study.
4.2
Brief Information on Fraser’s Hill Fraser‟s Hill is surrounded by Bukit Pokok Pine, Bukit Hulu Sempam, Bukit
Jeriau and Gunung Hulu Semangkok. The terrain here is steep and highly expose to landslides and soil erosion. The development of second golf course (which is now abandoned) located near Sg. Hijau and Jeriau waterfall has caused the water badly hilted. Due to the terrain of the land here is steep, the development of Pine Resort and Silver Park Resort was built on the slopes. Some of the 2,804 hectares of Fraser‟s Hill is still under forest cover (EPU, 2001). Kiew (1998) reported a total 952 seed plant species from 120 families comprising 70% of
60 dicotyledons, 29% monocotyledons and 1% gymnosperms found in Fraser‟s Hill. However, Kiew (2001) reported that there are 259 plant species are critically endangered or vulnerable and 36 species are endemic whilst 12 of which could be regarded as extinct.
In term of fauna, there are some 52 mammal, 275 bird, 27 reptile and 26 amphibian species in Fraser‟s Hill. This has made Fraser‟s Hill famous as the destination for bird watching activity venue in Malaysia.
There are 88 bungalows here where 62 units are of old tudor-style constructed during the colonial periods. One third of them owned by private owners and there are 3 units abandoned. Another one third owned by corporations or government agencies. The rest are mainly for leasing and Ye Old Smokehouse is the only bungalow well-known with its accommodation and hospitality services among the local and foreign tourists. The Singapore Government also owned 2 bungalows here mainly serve as the retreat or rest destination for its staff.
Public amenities available here include a police station, a post office and dispensary, a clinic, a mosque, temples and recreation parks. Tourism activities available here include a sports complex (under refurbishment), a 9-hole municipal golf course, horse riding, archery, boating at Allen‟s Water, flower nursery, strawberry nursery and nature trails. Other amenities such petrol pump, museum, mini zoo and public bus services to Kuala Kubu Baru (since 1 January 2008) have been ceased in operation.
Form the site survey also revealed that there are limited and variety of restaurants/eateries in Fraser‟s Hill. Some roadside hawkers operate their stalls on parttime basis during evening or weekends by selling burger, goring pisang and fruits. The journey to the summit of Fraser‟s Hill from the Gap takes about 8-kilometre drive. The new road linking Pine Resort and the Gap being completed, however; it has been closed for repairing work. Therefore, the old one-way traffic to the top from 6 am to 7:40 pm alternating between descending and ascending traffic is continuing. The road
61 system here is quite narrow and it poses danger to the drivers during weekends and public holidays due to heavy traffic problems. Under the Ninth Malaysia Plan, Fraser‟s Hill Development Corporation (FHDC) has received a sum of RM11.5 million to refurbish its tourism accommodation and amenities in Fraser‟s Hill whilst the Majlis Daerah Raub (MDR) has been allocated a sum of RM1.6 million to upgrade the common facilities at Fraser‟s Hill (Puan Sharinah, MDR). For ease reference, the site plan of Fraser‟s Hill is attached as Appendix I.
4.3
Socio-economic Situation The local population in Fraser‟s Hill comprise of two groups, e.g. those working
in the tourism sector and government i.e. FHDC, MDR and other government agencies. In 2000, the population here accounted to 1,256 people (Statistics Department). However, the site survey revealed that the number is now lesser than 1,000 population due to migration factor. Among the factors contributing to this are: no secondary education available in Fraser‟s Hill, the youth settle down in big cities, no new housing schemes could be built here since 2000 due to the fragility of the land and a number of staff has been transferred to MDR in Raub after MDR took over the function of local authority from FHDC in 1999.
4.4
Tourism Accommodation Sector in Fraser’s Hill
Before turning into the finding of the objectives of the study, it is vital to exanimate the status of accommodation sector in Fraser‟s Hill as well as their problems, causes, implications and challenges. Thence, the suitability of the accommodation sector to cater for the second home tourism practices is also explored.
62 In general, the supply of accommodation for tourism purposes has been reduced to 430 rooms from 472 rooms in 2000. Details of which are stipulated in Table 4.1 below:Table 4.1
Room Supply of Resort/Hotel in Fraser’s Hill
Hotel / Resort Shahzan Inn
No. of Room 93
Pine Resort
132
Apartment Hotel
Puncak Inn
27
Budget Inn
Jelai Resort Ye‟ Olde Smokehouse
40 16
Hotel Boutique Inn
Silver Park Resort Leaseback Scheme Sold - private use (256 units)
The Gap Resthouse Fraser‟s Hill Lodge (Resort) Rezab Mutiara Sdn Bhd (5 cottages) Total
Room Description Hotel
92 units
Apartment Hotel
8 7 22
Rest House Resort Bungalows
Facilities/Services/Activities Puteri Bongsu Lounge Lela Manja Restaurant Mahkota Alam Ballroom Meeting Rooms, Board Room Business Centre, Souvenir Shop Bank, Foosball, Table Tennis, Games Room & Laundry Services Cribs, Dry Cleaning/Laundry Service Medical Services, Currency Exchange Meeting/Banquet Facilities Post/Parcel Services, Restaurant/Café Nil. Ground floor of the budget hotel is attached with restaurants, a souvenir shop, a sundry shop. Nil Restaurant, Reading & TV Room Fireplace Traditional English Breakfast Hill Station Restaurant (serving Asian & Western Cuisine), Spike Bar, Sauna Swimming Pool, Spike Bar, Pro Shop Conference Facilities, Snooker, Video Games, Board Games, Gymnasium Basketball Court, Archery, Karaoke Transportation, Team Building Laundry, Event Organizing Under Refurbishment Ceased in operation N/A
430 (Source: FHDC, 2008 & Goh, 2008)
It is vital to note the Pine Resort and Silver Park Resort are on strata schemes where partially and all of the units have been sold. Thus, it is the obligation of the
63 developers to apply strata titles from the Pejabat Tanah dan Galian (PTG) via the provision of Strata Title Act 1985 (act 318) whilst under the new Building and Common Property (Maintenance Management) Act 2007, the developers shall help to form the Joint Management Body (JMB) on or before 31 April, 2008 thence to form a Joint Management Committee (JMC) to take over the maintenance management task from the developers and the performance of the JMB will under the monitoring and supervision of Commissioner of Building (COB) from the local authority, i.e. Majlis Daerah Raub (MDR).
The COB shall have the right to assign a property manager to take over the property management task from the existing management team should they received any complaint that revealed the underperformance of the existing JMB/developers/service providers. This is to ensure the common property of any strata scheme and the right of the purchasers is protected thus more transparent of the property management process being practiced. This is crucial especially for the situation in Fraser‟s Hill as it is tourism destination where its property especially the accommodation sectors should be well taken care of and to enhance its‟ value and occupancy rate.
4.4.1 The Problems, Causes, Implications and Challenges faced by the accommodation sector in Fraser’s Hill
(i)
The Problems
The main problem faced by the accommodation sector in Fraser‟s Hill is the low and declined trend of occupancy rate (except Ye Old Smokehouse). As tabulated in Table 1.3 (Chapter 1), the occupancy rate for certain hotel/resort is in the very poor stage where it has resulted the resort i.e. Jelai Highland Resort could not make itself in a good stage of decorative repair. This can be seen from its internal and external where it is not well kept due to limited capital for maintenance/refurbishment. This will deter the visitation of tourists thus bring more occupancy problem to the resorts in Fraser‟s Hill.
64 Site observations also revealed tourists will inspect or cross-check the room/house condition among the accommodations here before commits the rent.
(ii)
The Causes
The interviewees‟ opinions over this theme are as follows:Causes
Shahzan Inn
Pine Resort
Silver Park
Smokehouse
Jelai Resort
Declined of tourists arrivals and length of stay Seasonality Effect (less tourists during weekdays) Not enough activities especially for kids Not well maintain of the existing facilities/activities No good food with reasonable price Lack of publicity/promotion Lack of specialize tour guide Conflict among the authorities- FHDC & MDR New road collapsed - not yet ready repair by JKR Raub due to fund problem Bus service operation ceased on 1 January 2008 Poor access to Fraser‟s Hill
√
√
√
√
√
Remark: Solution by G,S
√
√
√
√
√
G,S
√
√
√
√
√
G,S
√
√
√
√
√
G
√
√
√
√
√
G
√
√
√
√
√
G,S
Hectic driving with winding road Landslide problem
√ √
√
G
Hospitality and friendliness from locals poor
√
√
G,S,L
Note:
√
√ √
G - Government S - Accommodation Stakeholders L - Local Residents
√
G
√
G
√
G
√
√
√
√
G,S
√
G G
65 The main causes of the low occupancy rate of the accommodation sector in Fraser‟s Hill as gauged from the stakeholders are:declined of tourist arrivals and length of stay seasonality effect (less tourists during weekdays) not enough activities especially for kids not well maintain of the existing facilities/activities no good food with reasonable price lack of publicity/promotion bus service operation ceased since 1 January 2008
The government and the accommodation stakeholders are liable to react to the above causes promptly in order to rescue and improve to the situation of the resort destination.
(iii)
The Implications
Implications
Shahzan Inn
Pine Resort
Silver Park
Smokehouse
Jelai Resort
Landscape, infrastructure and maintenance problems Dumping site close to Jeriau waterfall more than 5 years Tourists feel boring especially children Have to train staff to take the tourists for jungle trekking Tourists demand on room discount
√
√
√
√
√
√
√
√
√
Note:
√
G - Government S - Accommodation Stakeholders L - Local Residents
√
Remark: Solution by G G
√
√
G,S S
√
S
66 The main implications found from the interviews revealed that the declined in tourist arrivals and low occupancy rate of the accommodation sector in Fraser‟s Hill has brought to low income for the government (i.e. collection of assessment, service taxes and business license fees) and stakeholders (i.e. room and F&B revenues) which has resulted poor operation and maintenance of the landscape, infrastructure and maintenance problems in Fraser‟s Hill due to lack of funding.
(iv)
The Challenges
Challenges
Shahzan Inn
Pine Resort
Silver Park
Smokehouse
Jelai Resort
How to diverse or enhance the guests to put up themselves for long term basis in Fraser‟s Hill? How to promote and develop „un-spoil‟ nature in Fraser‟s Hill in sustainable manner? Fraser‟s Hill should carry out events on monthly basis in order to attract more tourists. If the tourists are increase here, thence how to avoid parking, noise and heavy traffic here? Education, training or seminars to the locals
√
√
√
√
√
Note:
√
√
√
√
√
√
√
Remark: Solution by G,S,L
√
√
√
G,S
√
G,S,L
G,S,L
√
G,S,L
G - Government S - Accommodation Stakeholders L - Local Residents
Whilst discovering the problems, causes and the implications as mentioned above, the stakeholders also highlighted that the challenges that need to be encountered by them in order to enhance the tourist arrivals which could bring to the betterment of the occupancy rate of the accommodation sector in Fraser‟s Hill. The main challenges include:-
67 How to diverse or enhance the guests to put up themselves for long term basis in Fraser‟s Hill? And Fraser‟s Hill should carry out events on monthly basis in order to attract more tourists.
The above findings on the low occupancy rate problems faced by the accommodation sector in Fraser‟s Hill especially during the low season periods i.e. weekdays due to institutional seasonality which need to be rectified promptly as it has caused the issues as quoted earlier. Their consequences to all aspects of supply-side of behaviour in tourism (Baum & Lundtorp, 2001) are listed below:-
(i)
marketing - the accommodation stakeholders in Fraser‟s Hill have to be more innovative to package their hotel/resort room together with activities that could be offered to the guests such as treasure hunt, sightseeing tour, jungle trekking. Most of the time the room rate of the accommodation will be lower during weekdays and some tourists could demand cheaper rates. For Ye Old Smokehouse, they facilitate their rooms with a lot of reading materials and information, and to give special discount on food and beverages and room rates to their guests. Dickman (1997) sees attractions and activities of the tourism destination are to ensure the competitiveness and success of the destination. Baum & Lundtorp (2001) see added value, product variation and pricing incentives could be used to spread the demand of the accommodation sector.
(ii)
labour market - most of the workers in the hospitality sector here are not local, thus far their quality service and skills are not compatible and risk to the stakeholders in providing good service to the guests. Thus, training and education to the staff is needed and crucial to ensure its quality and competitive service.
68 (iii)
business finance - most of the stakeholders are trying hard to make survival and control their budget.
(iv)
Stakeholder‟s management - the economic of scale have been reduced due to less order from the suppliers/intermediaries as a result of low occupancy rate.
(v)
other aspects of operations - i.e. to develop new markets for the low season periods. However, this needs to be collaborated with the relevant agencies namely the state and federal governments, Tourism Malaysia etc as quoted in the Remark column of the analysis.
The government plays the most important role to rescue the situation of Fraser‟s Hill as Goulding (2003) regarded the role of the governments and the public sectors as part of the overall management response to tourism seasonality. Besides, the publicprivate efforts/partnerships could be an alternative option to enhance the occupancy rate during the low season period in the tourism destinations like Fraser‟s Hill.
As recognized by Londtorp, Rassing & Wanhill (1998), it is crucial to study the strategies that could stimulate demand during the low season periods i.e. weekdays. This analysis has reveal the problems, causes, implications as well as the challenges faced by the selected accommodation sectors in Fraser‟s Hill which give us an important hinge and a better understanding on who will the target market outside of the main season in order to formulate the new marketing strategies.
In brief, the above findings can be illustrated at the Figure 4.1 below:-
69 Weekends, School & Public Holidays
Weekdays (Low Season Period)
Most of the Accommodation Sector enjoy full house rate
Problems Low Occupancy Rate
Causes, Implications, Challenges
Figure 4.1
Solution by Government Accommodation Stakeholders Local Residents Public-Private Partnerships
(Source: Goh, 2008)
Problems, Causes, Implications and Challenges faced by the Accommodation Sector in Fraser’s Hill
From the previous finding, it is noted that the government, the accommodation stakeholders and the local residents are liable to respond/react promptly and to rectify the problems and handle the causes, implications and challenges resulting from the low occupancy rate of the accommodation sector in Fraser‟s Hill, which tabulated in Table 4.2 overleaf. From Table 4.2, we noted that the government together with the accommodation stakeholders plays a major role to enhance the occupancy sector in Fraser‟s Hill. Nevertheless, the local residents also need to go through the training and education to ensure the tourism activity in Fraser‟s Hill operated at the sustainable manner. However, combination efforts and assistance from the government and stakeholders are vital to ensure its success.
70 Table 4.2 Issues / Parties
Causes Marketing
Management
Summary of Causes, Implications and Challenges Government, Stakeholders & Local Residents
Government & Stakeholders
Government
Stakeholders
-
Declined of tourists arrivals & length of stay Lack of publicity/promotion
-
Seasonality effect Not enough activity especially for kids Bus service ceased in operation
Not well maintain of the existing facilities /activities No good food with reasonable price Lack of specialize tour guide Conflict among the authorities Collapse new road not ready maintain Poor access to Fraser‟s Hill Hectic driving with winding road Landslide problem
-
-
Have to train staff to take the tourists for jungle trekking
-
Hospitality and friendliness from locals poor
Implications Marketing
-
Tourists feel bored especially children
Management
-
-
How to diverse or enhance longer stay guests at Fraser‟s Hill? Fraser‟s Hill should carry out events on monthly basis to attract tourists
-
-
-
How to develop and promote „un-spoil‟ nature in Fraser‟s Hill in sustainable manner?
-
-
Challenges Marketing
Management
How to avoid parking, noise and heavy traffic when tourists increase? Education, training or seminars to the locals
Landscape, Infrastructure & maintenance problem Dumping site close to Jeriau Waterfall
Tourists demand on room discount
71 The responds gauged from the selected accommodation stakeholders in Fraser‟s Hill and with reference to Goulding and Hay (2001) theory on „supply-side responses to seasonality‟, it is vital to note that Fraser‟s Hill should response to the followings:-
Attraction responses
Public-sector policy responses
Adoption of seasonal extension policies and practices:
Adoption of season-extension policies and practices:
- lower pricing during low season periods and for the long-stay guests
- fiscal incentives (as allocated under the 9th Malaysia Plan the fund to refurbish Fraser‟s Hill)
- to diversify its market from merely accommodation guests to mix-guests where - labour force incentives (e.g. training activities such as jungle trekking, historical initiatives to all the stakeholders) walk, golfing, nature walk to be included in their packages - business support services geared to seasonal extension (e.g. marketing, financial advice) - product extension/diversification - in term of promotion e.g. free lunch and dinner - creation, support or participation in seasonal extension programmes - events strategy - to organize more events during weekdays for the long-stay guests - support low season community initiatives such learning Bahasa Malaysia, cultural (e.g. local arts festivals) and custom practices, local cuisine cooking classes etc - promotional activities - get free accommodation when the tourists refer new occupier to their hotel/resort etc - participate in collective promotions (e.g. destination marketing initiatives, travel trade incentive visits)
As reckoned by Lucien de Guise (NST: May 1, 2008), art and games are powerful attractions in some parts of the world, especially those without shopping malls. Hence, Fraser‟s Hill should take serious measures to improve its activities attractions in order to enhance the tourist arrivals and length of stay thus bringing improvement to the occupancy rates of its hotels/resorts which enable them to operate at the sustainable level.
72 4.5
How Can Second Home Tourism be applied in Fraser’s Hill to enhance The Occupancy Rates of its Hotels/Resorts The analysis on the suitability of the accommodation sector in Fraser‟s Hill and
the Destination to accommodate second home tourism are stipulated as below:-
Hotel / Resort Shahzan Inn
No. of Room 93
Pine Resort
132
Puncak Inn
27
Jelai Resort
40
Ye‟ Olde Smokehouse
16
Facilities/Services/Activities Puteri Bongsu Lounge Lela Manja Restaurant Mahkota Alam Ballroom Meeting Rooms, Board Room Business Centre, Souvenir Shop Bank, Foosball, Table Tennis, Games Room & Laundry Services Cribs, Dry Cleaning/Laundry Service Medical Services, Currency Exchange Meeting/Banquet Facilities Post/Parcel Services, Restaurant/Café Nil. Ground floor of the budget hotel is attached with restaurants, a souvenir shop, a sundry shop. Nil
Suitability for Second Home Yes
Yes
No
Yes
Silver Park Resort Leaseback Scheme Sold - private use (256 units)
92 units
The Gap Resthouse
8
Restaurant, Reading & TV Room Fireplace Traditional English Breakfast Hill Station Restaurant (serving Asian & Western Cuisine), Spike Bar, Sauna Swimming Pool, Spike Bar, Pro Shop Conference Facilities, Snooker, Video Games, Board Games, Gymnasium Basketball Court, Archery, Karaoke Transportation, Team Building Laundry, Event Organizing Under Refurbishment
Fraser‟s Hill Lodge (Resort) Rezab Mutiara Sdn Bhd (5 cottages) Total
7
Ceased in operation
Yes
22
N/A
Yes
Yes
Yes
Yes
430 (Source: FHDC, 2008 & Goh, 2008)
73 The above site inspection and investigation revealed that almost all of the accommodations in Fraser‟s Hill are suitable for second home tourism practices. These also indicated that the accommodation sector in Fraser‟s Hill is also able to cater different type second homers in term of types of facilities and pricing they preferred. Furthermore, the supply of the second home in Fraser‟s Hill could be added i.e. 256 units in Silver Park Resorts should the second home tourism being successfully implemented here and the owners see the return that could be generated from the leaseback programme run by the operator in Silver Park.
The above analysis result will be further analyzed base on the type of second home that could be implemented in Fraser‟s Hill as tabulated below:-
Factors
Second Home
Retirement
Nursing Home
Time Share
Capability of Fraser‟s Hill
Location - distance close to KL
√
√
√
√
Yes
Connectivity through public transport from Kuala Kubu Baru
√
√
√
√
No
Climate
√
√
√
√
Yes
√
√
√
√
No
Amenities/Facilities - health, financial & communication services
(Source: Goh, 2008) Note: √ -
Important
74 The above analysis shows that Fraser‟s Hill is suitable for the second home and its related activities such retirement home, nursing home as well as time share concept. However, the author noted that the destination shall equip the following basic facilities/amenities in order to cater for the needs and requirement of the second homers:Internet services Medical services ATM machine to be operated during weekends Variety and good quality of food at reasonable pricing Public transport from Kuala Kubu Baru
Subsequently, site survey and interviews with the selected accommodation stakeholders in Fraser‟s Hill revealed that most of the tourists put up themselves here for a short period only and mostly during the weekends, public or school holidays. Results of the survey are tabulated in the Table 4.3 below:-
Table 4.3 Type of Tourists Weekenders/ Holidaymakers MICE Long-stay Guests (mainly retirees)
Accommodation Occupancy Trends by Tourists Shahzan Inn 65%
Pine Resort 55%
Silver Park 75%
Smokehouse 80%
Jelai Resort 95%
30% 5%
40% 5%
20% 5%
20%
5%
(Source: Goh, 2008)
This has caused very poor occupancy rate during weekdays. However, it could be the opportunity to look into the second home market especially to fill up the accommodation sector during the low season periods, i.e. weekdays. The number of foreign long-stay guests at the hotel/resort here are able to contribute significantly on their sustainable operation especially during the weekdays. Table 4.4 below shows the main market and duration of the long-stay guests at the selected hotel/resort in Fraser‟s Hill.
75 Table 4.4 Type of Tourists Long-stay Guest Market: Mainly retiree
Duration of Stay by Foreign Tourists in Fraser’s Hill Shahzan Inn Pine Resort Japan Japan USA Australia German France Taiwan
Silver Park UK
Smokehouse Jelai Resort Europe Singapore UK Australia Canada Africa German
Duration: 2-3 months
Duration: 1-4 weeks
Duration: 1-4 weeks
Duration: 2 weeks
Duration: 1-4 weeks
(Source: Goh, 2008)
The main factors (as agreed by all the interviewees) attributed to the visitation from the foreign long-stay guests here include:golf course facility and it is inexpensive cozy/cool weather and the environment very suitable for walking peaceful/tranquility, can enjoying retirement life bird watching nature walk/trails trekking On the other hand, the potential for foreign tourists to reside in Fraser‟s Hill is great due to the flora and fauna and its natural settings. However, more works such as publicity and better good services and the commitment of the local community to provide better hospitality is important to enhance the visit of the foreigners here. Table 4.5 below shows the survey results on the tabulation of the local and foreign tourist to the accommodation sector in Fraser‟s Hill:Table 4.5
Tabulation of Tourists at Hotel/Resort in Fraser’s Hill
Country of Origin Shahzan Inn Local 90% Abroad 10% (Source: Goh, 2008)
Pine Resort 80% 20%
Silver Park 80% 20%
Smokehouse 55% 45%
Jelai Resort 75% 25%
76 Based on the surveys made to the selected hotel/resort stakeholders and 30 local residents in Fraser‟s Hill, all of them (except Pine Resort) agreed that Fraser‟s Hill is suitable for second home either to the foreign and local people. Some key notes quoted by the stakeholders include:Second home tourism can be a good option to resolve the low occupancy rate and length of stay in Fraser‟s Hill where it could be able to attract more foreigners especially Japanese as they like to stay here for a longer period. However, great promotion for Fraser‟s Hill is needed. (Mr. Mokhtarruddin Khalid - Resident Manager, Shahzan Inn) Mr. Hafis, the Manager of Ye‟ Olde Smokehouse agreed second home tourism could resolved the problems. However, the implementation or execution of the second home tourism is not merely on the promotion side but also to ensure the rest of the stakeholders i.e. the FHDC and MDR to properly maintain its properties and facilities. Fraser‟s Hill is suitable for second home tourism due to its weather and environment which could not in other place nowadays and its distance from the city is not too far. (Mr. Dalwis - Manager, Jelai Highland Resorts) Mr. Jason Netto - Senior Resident Manager of Pine Resort commented Fraser‟s Hill is too small to explore and enjoy, thus second home tourism could not be a good option to resolve the occupancy and length of stay problems. They also agreed that Fraser‟s Hill should be embarked to start organizing events or seminars for the institutions or organizations to enhance tourist arrivals especially during weekdays or the low season periods in Fraser‟s Hill.
In addition, the local residents also agreed that the enhancement of occupancy rates through the implementation of second home tourism in Fraser‟s Hill would certainly bring benefits to them in term of opportunity of jobs which may bring better economic position to them, enhancement of skills and knowledge through the cross-culture contact
77 and more businesses especially food business which could also be carried out during weekdays.
The underutilized sports complex should be able to cater for events/seminars or certain function that provide the local community to keep contact with the second home tourists and public in general for more cross-culture contact and etc. Types of events suggested here include annual “Sound of the Nature”, “Song Bird Festival”, “Little England Festival” which compatible with the standard of “The International Rain Forest Music Festival” in Sarawak and “World Music Festival” in Penang.
This will not only enhancing the short-stay tourists for the events or seminars but also deemed as a part of the efforts to life up the destination for the local community to communicate with tourists especially with the long-stay guests and second homers. Thus, the long-stay guests and second homers could also have the chance to share with the locals and to collaborate with them in organizing the events or seminars which will make themselves occupied and share their knowledge and experiences with the local community while learning something new from the locals.
4.6
Conclusion The findings revealed that Fraser‟s Hill is rich and equip with the comparative
advantage that could be effectively explored. Its existing set up in term of number and different type of accommodation supply has made Fraser‟s Hill able to serve different type of tourists ranging from budget/back-packers up to the retirement market (second homers) who is the second richest group in the society. Second home tourism is the market that could be carefully planned and tapped by Fraser‟s Hill by putting in the adequate amenities and facilities coupled with the good service quality by the accommodation stakeholders and friendly hospitality by the local community.
78 The related parties namely the federal and state governments of Malaysia should also look into the matter and to discuss the proposal seriously. The move to conduct further research to enable its potential and its comparative advantage to be further explored and developed is needed, thus; the win-win situation for all the stakeholders regardless from the locals up to the governments would be gained from the development and increasing number of tourist arrivals to Fraser‟s Hill.
Nonetheless, prompt and realistic action in the planning, development, marketing and management processes, though a proper system shall be carefully and aggressively executed in order to enhance the occupancy rate of the accommodation sector in Fraser‟s Hill and to ensure them operate in the sustainable manner.
CHAPTER 5
CONCLUSION
5.1
Introduction
Second home tourism as discussed and analyzed in previous chapter is suitable to be implemented in Fraser’s Hill provided the connectivity and the amenities/facilities matters to be resolved. It is regarded as one of the strategies that could be used not only to revive Fraser’s Hill as a tourism destination but also to develop the destination further. The seasonality and lack of activities as well as amenities/facilities in Fraser’s Hill had makes it less attractive to visitors during the low season periods due to the shortcoming of its attractions. Second home tourism is potentially implemented in Fraser’s Hill to combat the declined tourist arrivals and length of stay thus enhancing the occupancy rates of the hotels/resorts. It is important to highlight in this chapter the role and efforts to be done/implemented by related parties to ensure the idea or proposal of this study a success.
5.2
The Role of the Respective Parties in Fraser’s Hill
The relationship between seasonality and visitor motivation has not been explore to any degree and it is not known whether dissatisfaction with conditions in the origin region or the attractions of the destination play a greater role in shaping the seasonal patterns of tourism (Baum & Lundtorp, 2001).
80 The reality is low seasonality has brought to the low occupancy rate of the accommodation sector in Fraser’s Hill, nevertheless, its impact from declined of tourist arrivals and length of stay also significant. The exploration of the above literatures shows there are possibility of changes of methods or strategies in the development, marketing and management of the destinations couple with the collaboration approach could bring a new dimension to the tourism destinations for a better and sustainable growth.
Hence, it is vital for the following parties to review and study their respective roles and obligations to develop more meaningful and joyful activities, to market the destination widely and to manage the destination on a more sustainable manner:-
The Federal Government through Tourism Malaysia, the State Tourism Action Council, Fraser’s Hill Development Council (FHDC) to plan, to develop and to market Fraser’s Hill. Among the matters to be involved and resolved include:Infrastructure development and maintenance linking Kuala Kubu Baru Baru and Fraser’s Hill need constant follow-up and repair Clear and effective directional traffic and directional signages from major highways and federal roads to Fraser’s Hill to be fixed To ensure the bus or van services operation from Kuala Kubu Baru to Fraser’s Hill to be resumed To train the locals especially those involve in the tourism sector here to become specialize nature guides by giving them extra allowances and recognization in the form of certification To liaise with the State of Selangor and Pahang as well as JKR on the maintenance of the access road to Fraser’s Hill especially the landslide problems To rectify and repair the collapse new road in a speed manner The existing attractions and new nature products to be well planned, developed and managed, private initiatives could be encouraged through the
81 involvement of corporate in the form of corporate social responsible (CSR) projects To give incentives and to assist the Fraser’s Hill Development Corporation (FHDC) and the accommodation stakeholders to advertise and to promote widely Fraser’s Hill to the public and target market, e.g. advertisements at the KTM commuters, KL Central, LCCT, KLAI and Mid Valley as these locations are well connected by KTM commuter from KL Central up to Kuala Kubu Baru which provide a very good connectivity to the destination To ensure the sum of RM11.5 million allocated under the 9th Malaysia Plan to be wisely used on the targeted development and maintenance of the attractions in Fraser’s Hill To collaborate with the stakeholders to train, educate the locals on their roles and involvement in tourism activities in Fraser’s Hill and to enhance further their hospitality skills To create a “kids world park” in the existing underutilized sports complex and to organize more events and seminars to enhance the attractiveness of the destination and length of stay by the tourists To provide healthcare services to the second home market To provide a proper waste collection centre at Fraser’s Hill instead of practicing open dumping On the other hand, the Majlis Dearah Raub (MDR), the Fraser’s Hill Development Corporation (FHDC) and the stakeholders namely the accommodation sector and food business operators here shall seriously look into the followings:To maintain and repair the infrastructure and landscape in Fraser’s Hill Together with efforts of the local residents to jointly organize activities such art festival, food festival, cultural performance class, festival celebrations in order to expose the cross-culture among the tourists and the locals thus enhance the long-stay intention by the tourists, as well as to expose the learning and involvement of the retires and the second home markets in the community development in Fraser’s Hill
82 All business operators including the hawkers shall take full responsibility to ensure the quality and cleanliness of the food they serve are in good condition and reasonable in pricing. Hence, the local authority shall take serious measure by implementing strict approval of their license and constantly inspect their business operations To provide wider services such as internet, public phone, petrol kiosk and ATM machine services to the tourists and locals To jointly organize and promote the night market (pasar malam) at Kuala Kubu Baru every Fridays to the long-stay tourists in Fraser’s Hill The accommodation stakeholders shall work more closely with tour agency to bring in more long-stay guests where apparently most of the long-stay tourists crowded at Cameron Highlands, Bukit Tinggi and Genting Highlands (Goh, 2008 - through the interviews with some MM2H agents) To propose and organize events on monthly basis in order to enhance more tourists to Fraser’s Hill More importantly, to reduce thence avoid conflict among the MDR and FHDC as highlighted by the stakeholders - Stop blaming and work hard, stop pointing and start action! for the good of Fraser’s Hill.
From the above findings and discussions, it is clear that the low occupancy rate of accommodation sector in Fraser’s Hill is not merely the problems of the accommodation stakeholders, but also involved all related parties as named above. With the immediate and well planned and prompt action by the related parties, the low occupancy rate of the destination especially during the low season periods could be resolved. The study also shows that second home tourism could be implemented in Fraser’s Hill provided the connectivity problems and the development and management of amenities/facilities problems to be implemented.
Also, events and seminars and such other activities are also crucial to enhance the tourist arrivals and to make the long-stay guests as well as the second homers here to
83 occupy themselves and at the same time to contribute their knowledge and experience while learning new things and culture matters from the locals. As recognized by Goeldner & Ritchie (2003), events and festivals are among the powerful tool to attract tourists during the off-season and to create an image and awareness for an area.
In order to implement the second home tourism effectively as part of the strategy to revive Fraser’s Hill as a tourism destination, the following strategy and actions need to be considered by the relevant parties:-
Strategy Improvement and enhancement of the accommodation sector as well as food and service quality
Improvement on the activities in Fraser’s Hill or product development
To view “second home tourism” as a long term survival plan and sustainable tourism activity for Fraser’s Hill
Management concern
Marketing concern
Action The government together with the hotel/resort operators should conduct detail research on type of market segment could be tapped by Fraser’s Hill as the local and foreign second homers could be different in expectation and requirements Incentive in term of rebet on assessment and subsidies in term of promotional costs to be given to the hotel/resort operators Tourism Malaysia shall at the assistant of the tourism planners and industry players to coordinate with FHDC, MDR, the hotel/resort operators and the locals on the review and planning, development, implementation of the activities that cater for the second homers in particular To improve the existing activities and its support facilities To educate the stakeholders and locals on the importance and economic benefits of the second home tourism to Fraser’s Hill To encourage the locals involved in tourism activities and business actively and select the mechanism that could be used e.g. training, seminar and awards To ensure continuous feedback and suggestions either from the second homers and the locals and stakeholders to be given attention for betterment and improvement The government and Tourism Malaysia should ensure the management of Fraser’s Hill is within the allocated budgets and its management to be conducted effectively and efficiently Tourism Malaysia should ensure the marketing of Fraser’s Hill not to be neglected at all level of promotions either nationally or internationally
84 In short, the government may need to look into the matter faced by Fraser’s Hill seriously and take immediate action to rectify the problems in order to sustain it as not only as the premier nature-based tourism attractions to the foreign and local tourists but also to make the destination as a premier second home tourism destination in Malaysia. The flow chart designed for the above description can be shown as below:-
Federal Government Tourism Malaysia Pahang Government Selangor Government Tour Agency Accommodation Stakeholders Local Residents Tourists (Prospect/ Target Market)
Research & Development
Strategy to Revive Fraser’s Hill as a Second Home Tourism Destination
Improved Tourists Supply
Improved Tourists Demand
(High Hotel/Resort Occupancy Rate) Sustainability
Accommodation Stakeholders
Local Residents
The Governments & Authorities
85 5.3
Limitation and Shortcoming of Study
This study is not to quantify the level of effects of the problems on the related parties, namely the governments, MDR, FHDC, accommodation stakeholders, businesses stakeholders ad the local residents of Fraser’s Hill. It is only a preface study to investigate the concept/variant of second home, and to review the current practices of second home tourism in Malaysia and finally to analysis the condition of the Fraser’s Hill in order to study how can the second home tourism to be applied here to enhance the occupancy rates of the accommodation sector in Fraser’s Hill especially to encounter the low occupancy rate during the low season periods.
5.4
Final Conclusion and Suggestion
The low occupancy rate of accommodation sector especially during the low season periods in the hill destination like Fraser’s Hill need to be seriously studied and rectified by the government in order to maintain its status as one of the famous and premier hill resort destinations in Malaysia. We don’t wish to see if the mark of the destination to be disappeared in the tourists’ map one day. The improved occupancy rate will not only give a good impact on the sustainability for the economic of the stakeholders but also to improve the capital and rental gains for the apartment in Silver Park and the private bungalow, which could be the future supply of the accommodation sector in Fraser’s Hill to cater for the future demand market. Hence, second tourism could be a potential strategy to revitalize Fraser’s Hill as a tourism destination. The proposed future study for Fraser’s Hill is how to match the nature base activities and events which to be conducted especially during the low season periods, i.e. weekdays with the long-stay guests or the second homers in order to ensure its sustainable operations in order to achieve the goals of all stakeholders of Fraser’s Hill. Nevertheless, study on the local and foreign retirees and the second homers analysis on what are their residing motivations and the potentiality to reside in the hill resort like Fraser’s Hill could be further explored by the scholars and government.
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