Final Report: Entrepreneurship in Malaysia's Tourism Industry

This report examines the landscape of entrepreneurship within Malaysia's tourism sector, recognizing its status as a significant revenue generator. It identifies key problems faced by entrepreneurs, such as hotel shortages and the need for technological advancements, while also pinpointing potential business opportunities. The report assesses these opportunities, focusing on the impact of technology adoption, cultural considerations, and the use of models like Technology Transfer (TT) to facilitate managerial capabilities and organizational elements. It highlights the importance of government support and proactive infrastructure development. The conclusion emphasizes the need for entrepreneurs to address challenges through innovation and strategic planning, ultimately contributing to the growth and competitiveness of Malaysia's tourism industry. It explores the role of technology adoption and knowledge transfer, and suggests solutions to overcome the challenges faced by entrepreneurs in this sector, like the shortage of resort-type hotels, while discussing the importance of government policies and a skilled workforce.

Entrepreneurship
Studies
Student Details:
0

Contents
Introduction...................................................................................................................3
Business Opportunity: Problem and Solution...............................................................3
Business Opportunity Assessment...............................................................................5
Business model or strategy..........................................................................................6
Conclusion....................................................................................................................7
References...................................................................................................................9
1

Summary
The aim of this report was to identify the problem before starting business in the
tourism sector of Malaysia for recognising the business opportunity to solve it in
future. That need to feasible in terms of the industry such as tourism and product or
services such as advancing technology, enhancing culture and improving
infrastructure. This is based on the potential customers that are tourists coming to
travel to Malaysia for look towards destinations and Malaysian people as travellers
itself. The model is identified to realise the business opportunity assessment in
tourism sector of Malaysia for development and growth in future as an entrepreneur
with a tough competition overall.
2

Introduction
In today’s competitive business world, there is increase in hospitality and
tourism industry where Malaysia is one of the second largest revenue earners due to
being a tourism-driven economy. In tourism industry, people involved are
businesses, society, tourists, host communities and tourism managers that require
deriving benefits for achieving success (Mitchell, 2012). This represents high
competition in the economy of tourism where players look towards maximising
consumer surplus by providing them the best experience at nominal costs to gain
profits along with long-term employment and income for generating net benefits. It is
based on the number of tourists entering in the country for measuring the tourism
assessment at a national scale (Chilufya, Hughes, & Scheyvens, 2019). The aim of
this report is to identify problem of doing tourism-driven business in Malaysia along
with recognising business opportunity for solving it. This report will also assess the
business opportunity along with identifying and explaining the business model or
strategy.
Business Opportunity: Problem and Solution
In rapid increase of hospitality and tourism sector, establishing business in not
easy in high competitive market. In today’s time, Malaysia being the second largest
revenue earner due to its tourism-driven economy, it is not easy for entrepreneurs to
start the business in that sector. To start a business of hotel, entrepreneurs face high
competition and financial management as their basic problems in Malaysia.
However, Malaysia is facing a problem of resort-type hotels shortage which leads
towards the shortage of suitable accommodation facilities for budget-class tourists as
3

well. In this changing business environment, preferences of tourists are also
changing where they demand high with best quality services at nominal costs.
Moreover, it is not easy to develop new products as it requires new capital and fresh
perspective in case of entrepreneurship. Currently, the government has set the
target for Malaysia in relation to earnings estimated to be RM100bil and arrivals of
30mil tourist which states this country highly competitive for entrepreneurs (Min &
Chua, 2018). So, the problems faced in the tourism and hospitality industry of
Malaysia are long-term trends due to its fast developing tourism economy such as
growing demand, climate change, digitalisation and changing demographics. Across
the globe, there is increase in capital flows and trade investments along with labour
movements where technology helps in creating opportunities for business in terms of
emerging destinations without knowing their economic status.
Though, the business opportunity for entrepreneurs that can solve the
problems faced in tourism sector of Malaysia involves technology adoption and
knowledge. This leads towards economic development as well in developing
countries like Malaysia which will justify the tourism promotion globally and decrease
the effects of discrimination for entrepreneurs in the travel and tourism industry
globally. In business, opportunities are based on the impact of knowledge transfer,
relevant policies and technology adoption benefiting the tourism-driven economy of
Malaysia as well with the increasing trend of globalisation (Ariffin & Hashmi, 2018).
These problems can be solved by innovation and advancing technology as a
business opportunity that is required to be assessed in relation to Malaysia’s tourism
sector.
4

Business Opportunity Assessment
In tourism industry, the assessment of business opportunity requires feasibility
of an idea in relation to technological advancements as a solution. In tourism sector,
the hotel trends that derive solution through business opportunity are checking into
hotels where employees are robots, interaction with complete strangers and other
guests though socialising, and using smart rooms or smart hotels by automation. For
instance, Jacky Chan being a Malaysian entrepreneur introduced Tripviss
Technology for connecting global travellers with distinct experts to get information
about the traveling needs (Tung, 2016). This availability of information for tourists
promotes aspects of tourism and travel ecosystem including beverages and food
choices, transportation to accommodation, and facilities available for attracting
tourists through hospitality information tool by using technology. In business,
technology also helps in the expansion of marketing opportunities but there are
some challenges entrepreneurs need to face in the tourism-driven economy of
Malaysia (Puah, Jong, Ayob, & Ismail, 2018). Technology has changed the way of
doing business in terms of booking hotels, paying bills, checking in, looking and
comparing for places to shop, eat, and others by providing availability of information
and services to tourists online across the globe.
The challenges faced in gaining business opportunity and problem solving for
entrepreneurs while technology transfer process implementation are the system of
online payment, the Internet connectivity, viral news that creates controversies and
negative impact on the business, infrastructure while building resort-type hotels,
readiness of technology during improving the level of customer service, funding
where entrepreneurs are not financial strong, government policies of Malaysia in
terms of tourism development, skilled and experienced workforce, high cost in terms
5

of providing best quality services and facilities in hotels, and lastly, knowledge gap
between transferring information and best practice to the user due to poor absorptive
capability (Kadir & Karim, 2012). Business opportunity can be assessed in terms of
culture as well in terms of both international tourists and Malaysian travellers as per
the difference of ethnics with local knowledge. The tourism attracts based on
handicrafts, architecture, music, traditional attire, and dance of the country that
reflects Malaysia’s heritage tourism culture. However, there can be rise in
management conflict faced by entrepreneurs in business along with stakeholders,
cultural heritage managers, tourism managers, governments and local community
(Mosbah, 2014). It is essential to conserve, maintain and preserve the resources and
assets in terms of establishing business related to cultural heritage in Malaysia.
Business model or strategy
Based on the assessment of the business opportunities in tourism industry,
model of Technology Transfer (TT) is used as a process that helps in dealing with
managerial capabilities, organisational elements, and absorptive capacity of an
organisation. In business, managerial capabilities include employee support and
leadership, technical expertise and knowledge, project management skills, and
group management skills which help in enhancing the technological capability
improvisation and technology transfer successfully (Jaafar, Abdul-Aziz, Maideen, &
Mohd, 2011). Furthermore, organisational elements include organisational structure,
learning culture, and procedures and system while the company’s absorptive
capacity include essential technological capabilities such as operational and
investment along with dynamic learning. There is full support of the government in
relation to business opportunity assessment while using this model for smoothening
6

of technology transfer procedures implementation in the tourism industry of
Malaysia. It is essential for doing business in Malaysia to use a proactive approach
to establish and maintain the infrastructure. Also, it is important to address
development issues such as quantity and quality dimensions, involvement of the
public agencies ability, and maintaining activities efficiently for enhancing Malaysian
tourism overall which can be solved by working with resource constraints, need for
effective and clear strategies and policies, and lack of maintaining system and
culture effectively (Abdullah, Razak, & Jaafar, 2014).
These models or strategies help the management or system of business with
the need of development to face any kind of challenges and problems or issues that
can be solved with this feasible assessment of opportunities in terms of decision-
making process in the tourism sector. It requires reliability for optimising cultural
heritage value in Malaysia’s tourism industry for doing business based on overall
aspects of a developing country for contributing growth and high demand (Ismail,
Masron, & Ahmad, 2014). Therefore, it is not easy to gain a business opportunity in a
developing country like Malaysia having the economy of driving tourism. Even after
facing problem in hospitality and tourism industry, there are solutions by developing
business with different opportunities in terms of infrastructure, technological
advancements, increasing employment and others among the help of using models
or strategies for their realisation (Othman & Rosli, 2011).
Conclusion
Based on the above observations, it is concluded that tourism in Malaysia is a
luxury with renowned destinations and elite society promoting traditions. Malaysia
being a tourism-driven economy also faces several problems in terms of hotels-
7

resort shortage, technological advancements, and to understand culture of the
country which required to assess business opportunity to solve such problems.
Entrepreneurs create opportunities through technology for destinations in Malaysia
without knowing its economic status. During increasing globalisation, there is an
impact of transformation on the rapid economic development of the Malaysia as a
developing county as well. Though, changes helped in decreasing the effects of
discrimination for doing business in tourism sector of Malaysia. Business opportunity
is impacted by transferring of knowledge and technology along with its adoption
which shows the importance of technology in the tourism-driven economy, Malaysia.
Across the globe, this integration took place with the increase in capital flows and
trade investments among labour movement. Also, entrepreneurs faced challenges
as well while gaining business opportunity and solving problem in tourism sector of
Malaysia which can be overcome with the help of government.
8

References
Abdullah, S., Razak, A., & Jaafar, M. (2014). Public Tourism Infrastructure:
Challenges in the Development and Maintenance Activities. SHS Web of
Conferences, 12, 01096.
Ariffin, A., & Hashmi, D. (2018). Enhancing Malaysian Entrepreneurs Business
Venture and Innovation in Tourism Industry through Knowledge and
Technology Adoption. Journal of Science, Technology and Innovation Policy,
4(1), 1-12.
Chilufya, A., Hughes, E., & Scheyvens, R. (2019). Tourists and community
development: corporate social responsibility or tourist social responsibility?
Journal of Sustainable Tourism, 27(10), 1513-1529.
Ismail, N., Masron, T., & Ahmad, A. (2014). Cultural Heritage Tourism in Malaysia:
Issues and Challenges. SHS Web of Conferences, 12, 01059.
Jaafar, M., Abdul-Aziz, A.-R., Maideen, S., & Mohd, S. (2011). Entrepreneurship in
the tourism industry: Issues in developing countries. International Journal of
Hospitality Management, 30(4), 827-835.
Kadir, N., & Karim, M. (2012). Tourism and Economic Growth in Malaysia: Evidence
from Tourist Arrivals from Asean-S Countries. Economic Research, 25(4),
1089-1100.
Min, K., & Chua, C. (2018, November 9). Tourism in Malaysia: The Way Forward.
Retrieved from Leaderonomics: https://leaderonomics.com/business/mpc-
tourism-malaysia-way-forward
9

Mitchell, J. (2012). Value chain approaches to assessing the impact of tourism on
low-income households in developing countries. Journal of Sustainable
Tourism, 20(3), 457-475.
Mosbah, A. (2014). A Review of Tourism Development in Malaysia. European
Journal of Business and Management, 6(5), 1-9.
Othman, P., & Rosli, M. (2011). The Impact of Tourism on Small Business
Performance: Empirical Evidence from Malaysian Islands. International
Journal of Business and Social Science, 2(1), 11-21.
Puah, C.-H., Jong, M.-C., Ayob, N., & Ismail, S. (2018). The Impact of Tourism on
the Local Economy in Malaysia. International Journal of Business and
Management, 13(12), 151-157.
Tung, Y. (2016, January 22). 5 Asia-based travel startups you should check out.
Retrieved from e27: https://e27.co/5-asia-based-travel-startups-check-
20160122/
10