Oct 23, 2012

Brunei - Where has the $17m in tourist spending gone?

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A MEDIA headline accompanying the Abacus Travel Expo at BRIDEX Hall announced that the number of Bruneians travelling to Malaysia "dipped by 1.2 per cent" in the first half of 2012, got me wondering, "so what does this mean?"

Well quite a few different things, actually.

Firstly, and arithmetically, it means the decrease in Bruneian visitors entering Malaysia in the first half of 2012 is equivalent to 1.2 per cent of the total that entered during the same period in 2011.

In real terms, it means Bruneians made 7, 144 fewer visits to Malaysia this year, than at the same time last year.

Secondly, and statistically, it might mean nothing at all.

There are invariably some small errors in gathering and processing data, called "sampling errors". They are typically quoted as "plus or minus three per cent"; so any value less than three per cent is within that margin of error and, therefore, meaningless.

Thirdly there is the pragmatic meaning.

Sure, 7,144 is a big number who would not like that number of Brunei dollars? However, when that number is compared to the overall number of visits made by Bruneians in that period, nearly 600,000, it is actually not such a big number after all.

Finally, there is the economic meaning.

Tourism Malaysia data shows that each Bruneian spends, on average, $2,400 per trip. In other words, we have spent about $17 million less in Malaysia so far this year, than we did in 2011.

Clearly for the small restaurants, cafes and retail outlets that have lost that business, it is a big loss.

But compared to Malaysia's tourism sector income, which is nearly 50 per cent bigger than Brunei's whole GDP, it is not such; and easily made up by the income from the increase in tourists from Iran, South Africa and Myanmar.

But imagine the impact of a $17 million cash injection into the local restaurant, recreation and retail sectors.

As Tourism Malaysia's data also show, and as this column has commented upon previously, these are the "3Rs" Bruneians spend their money on in Malaysia.

My friends and colleagues who run retail, restaurant and recreation businesses tell me it would be like all of their lifelong Hari Raya or Christmas celebrations coming at once.

It would certainly buy a lot of ice cream, iPhones, trainers, lingerie, nasi lemak, even fine dining or weekend stays in hotels. Sadly, as far as I am aware, this is not the case.

Despite a significant reduction in indulgence spending in Malaysia, Bruneians have not chosen to increase their level of indulgence spending in Brunei by anything like the same amount if at all.

As a result, the analyst in me needs the answer to two questions: "If not, then why not?" and "where has that money gone?"

The answer to the first question is one of the reasons for this weekly column the overall level of customer service and the range and quality of products and services available is simply not compelling enough to make people want to spend a lot of money locally, beyond what they need to spend on the basics.

The annual "Are You Being Served?" survey does show that Brunei's service providers are getting better, bit by bit; but still generally fail to meet their customer's expectations, which are increasing faster.

The competitors in Malaysia and elsewhere, while still far from being perfect, are nevertheless making bigger efforts and investments in their facilities; and, with their staff and their service delivery processes, to meet and even exceed these same expectations.

Until Bruneian businesses realise they are not just competing against the store in the next block, but against the stores in the neighbouring states, and then do something about it, Brunei will continue to lag behind the overall regional service standards. And, as a result, lose income.

I can only guess at the answer to the other question.

Folk are either saving the money or else spending it on the next visit to Malaysia.

We have been writing "Are You Being Served?" for two years, but this issue has been unresolved for a lot longer.

Despite more than 10 years of government encouragement, support and investment in developing local businesses, economic diversification and the aims of Wawasan Brunei 2035, it seems what the journalist Jean-Baptiste Alphonse Karr said of France in 1849 continues to be true for Brunei in 2012 "plus ça change, plus ça reste la même chose" (the more things change, the more they stay the same).

The views of the writer are his own and do not necessarily reflect those of The Brunei Times.

The Brunei Times

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