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Langkawi : Unhappy Landings Paradise Lost
In 1819, Malay Princess Mahsuri is said to have laid a curse on Langkawi, an Archipelago off the northern coast of Malaysia.
As she faced beheading for alleged adultery, the princess presaged that for seven generations, prosperity would elude the islands. For more than a century, it seemed the curse had come into effect.
Until the late 1980s, the main island of Langkawi was little more than sleepy rice fields, fishing villages, isolated beaches, limestone outcrops and mangrove forests. But in 1987, Prime Minister Mahathir Mohamad--a native of Kedah state, which includes Langkawi decided to transform the islands into one of Malaysia's main tourism money-spinners.
He granted Langkawi duty-free status, and over the next dozen years, the government ploughed 5 billion ringgit ($1.2 billion) into upgrading infrastructure. Everyone who's anyone in Malaysian business rushed in: the Berjaya and Pernas groups, Granite, Landmarks, Technology Resources Industries and YTL Corp. all invested. A total of 4 billion ringgit from private developers funded 7,200 new hotel rooms.
Locals breathed a sigh of relief: Finally, they thought, the curse had been lifted. Not quite. Langkawi is once again struggling for survival. The regional economic crisis, along with poor government promotion, is hammering tourism, Malaysia's third-largest currency earner after the manufacturing and oil industries.
Except for a few top-end hotels, most segments of Langkawi's economy are hurting from a sharp drop in visitors. It's a stark contrast to the booming business up the coast on Thailand's Phuket island, which is reaping the benefits of an aggressive government tourism campaign and might prove to be a good role model for Langkawi.
But other critics say advertising isn't enough: The tourist spot needs a complete makeover, they argue, be it as an entertainment centre or a rainforest-filled ecotourism destination. Just 1.6 million tourists visited Langkawi last year, down 6% from the 1996 level of 1.7 million, according to the Langkawi Development Authority.
Numbers haven't been tallied for the first half of 1998, but hotel-occupancy figures suggest they've fallen further. Average occupancy in May for three-star hotels and lower reached only 10%-27%; the rate for four- and five-star hotels stood at 42%-52%. This is down from a 1996 average of 58% for all hotels.
Signs abound of the slump. During a long holiday weekend, the lobby of the three-star Tiara Hotel is almost empty. Occupancy is less than 20%, says developer Syed Izhar Syed Salleh. Not far away, in a corner of Domino restaurant, Wolf Langenbacher plays solitaire on his computer. The German owner figures he'll have to close his eight-year-old operation at the end of July. "I'm losing money on most days," he says.
Domino won't be the first foreign-owned restaurant to fold: One operated by an Austrian and another run by two Australians beat Langenbacher to the draw. Meanwhile, dozens of small shops catering to tourists in the main town of Kuah have already shut down. And the head of the Langkawi taxi owners association said recently that 80% of its 503 members faced difficulty making monthly payments on their vehicles because of a sharp drop in business.
At the three-star Legenda Hotel nearby, workers are busy moving furniture and unpacking computers. But they aren't preparing for a sudden influx of tourists. A few months ago, the owners decided to ditch the hotel industry and convert their complex into a college teaching hotel-management, computer and pre-university courses.
Delima Resort officials recently told Mahathir that they were considering following in Legenda's footsteps. Rumours are rife that other struggling hotels are looking for buyers.
In part, overdevelopment is to blame, says Tiara boss Syed Izhar. "In eight years, there are 40 new hotels," he says. "That's too fast. Competition for customers is too stiff." And it has become even stiffer since the financial meltdown: 70% of the island's visitors are Malaysians, who are tightening their belts as a result of the economic crisis. Many analysts say Malaysia's tourist officials are at fault for not doing more to woo foreign visitors. "It all boils down to market strategy and how a country is advertising itself," says Sen Soon Mun of PKF Consulting in Singapore. "Thailand is very active in promoting tourism.
Malaysia is not that well advertised. No one has heard of Langkawi." (Langkawi officials repeatedly rejected the REVIEW's request for an interview.) Sen and others contrast Langkawi to nearby Phuket. When the currency crisis struck, the Tourism Authority of Thailand mounted a glitzy "Amazing Thailand, Amazing Value" campaign. In the first four months of 1998, tourist arrivals in Phuket reached 272,000, up from 237,000 during the same period in 1997.
Hotel occupancy from January to March reached 88.4%, even better than the 83.4% level in the first quarter of last year, according to PKF Consulting. The lack of shopping opportunities and entertainment--largely a result of the overzealouness of some local Muslim officials--further hampers tourism in Langkawi.
In recent months, officials have pressed local entertainment outlets to bar Muslims from their premises. At least one firm has put up a sign saying "Muslims are not allowed to patronize this entertainment outlet." Langkawi has none of the karaoke lounges popular among Asian tourists, even though they are allowed on the mainland of Kedah state.
"Closing nightspots at 1 a.m. is too early for holiday-makers," says Eric Sinnaya of Morahols Travel based in Langkawi, which organizes tours for European visitors. "Tourists want to listen to music and have a drink. We have the cheapest booze in the world, but people can't drink it," jokes Sinnaya, who heads the Kedah branch of the Malaysian Association of Tour and Travel Agents.
Foreign tourists also complain that duty-free shops in Langkawi sell little besides cigarettes, alcohol, dishes and clothing from Thailand. "Tourists want to buy the latest technology, CD players and computers," says Leo Kuscher, general manager of the Andaman, a successful resort that caters mainly to European and Japanese tourists. "My guests say they can't find anything they want to buy." Kuscher says Langkawi could boost its tourist appeal by "enhancing its culture." He points out that "handicrafts and culture are everywhere on the Indonesian island of Bali. Not so in Langkawi, Kuscher says.
"You go to the handicraft centre and half the things are made in Indonesia. They should be made in Malaysia." Others note that with the right planning and promotion, Langkawi--with its bounty of rainforests and other natural attractions--could also succeed as an ecotourism destination. "In order to succeed, Langkawi has to reposition itself by emphasizing its islands, its rainforest, its laid-back rural lifestyle," says Joseph Chong of the Bon Ton restaurant, popular among foreign visitors. "They should forget talking about pristine beaches, culture and nightlife."
It's not a completely bleak scene, however; a few of Langkawi's five-star hotels are still doing a roaring business. The Datai, a luxury resort set in a rainforest next to a secluded beach, is having "our best business ever," according to manager Jamie Case. The resort, which has mounted its own advertising campaign overseas, gets about 30% of its guests from Britain, 20% from Japan and 10% from Australia. "Business out of Europe is 15% higher than last year," Case says.
Another outfit doing well is the exotic Barn Thai, which bills itself as the world's only restaurant smack in the heart of a mangrove forest. "Business is easily 10% better than last year," says manager Chiam Kah Jit. Half of Barn Thai's clientele are Japanese, 30% are Westerners. But overall, unless more is done to promote the islands, strengthen its tourist appeal and lessen the effect of restrictive Islamic regulations, Langkawi may remain under an economic hex, leaving investors with little recourse. "Those who aren't strong enough will have to leave," Tiara's Syed Izhar says, predicting that more hotels will close in the coming months. "I'm still confident," he says of his own operation. "I hope to be part of the group that reaches the new equilibrium."
Langkawi 20/07/1998
