The Malaysian Tourism Federation (MTF) has intensified its call for comprehensive reforms to the Tourism Industry Act 1992 (Act 482), with its president, Datuk Tan Kok Liang, warning that outdated regulations are stifling progress and threatening Malaysia‘s competitiveness in the global tourism market.

Modernizing Malaysia’s Tourism Framework
Tan emphasized the need for a forward-thinking regulatory framework that addresses the evolving demands of the industry, technological disruptions, and shifting consumer behaviors.

“The current laws are killing progress,” he declared, urging the government to adopt a holistic approach to reform.

Key areas of concern include:

Regulating Short-Term Rentals and E-Hailing Services: To protect legitimate businesses and restore consumer trust.
Eliminating Unfair Policies: Such as prohibiting individuals from holding shares in multiple travel companies.
Encouraging Industry Growth: Through mergers, acquisitions, and resource-sharing among small travel agencies.

“The framework must not only enable growth but also safeguard smaller sub-sectors of the tourism industry to ensure they remain under Malaysian ownership,” Tan added.

Protecting Local Businesses
Tan criticized policies allowing 100% foreign ownership of inbound travel agencies with a low RM1.5 million capital requirement, arguing that they create an unlevel playing field.

“Foreign players are gaining easy entry, sidelining local entrepreneurs,” he said, calling for stricter measures to protect Malaysian businesses.

Outdated Regulations Hindering Progress

Regulations like Section 6(1)(i)(iii), which mandates licensed tour guides for all tour buses, have been flagged as burdensome for small-scale operators.

Tan advocated for a balanced approach: “Circumstances vary. Companies should have the flexibility to determine their needs while ensuring safety and quality.”

He also highlighted inconsistencies in enforcement, pointing out that e-hailing vehicles and hire-and-drive vans used by tourists are exempt from requiring licensed guides.

“This double standard must be addressed to create fairness across the industry,” he added.

Lessons from the COVID-19 Pandemic
The pandemic exposed flaws in the Tourism Industry Act, particularly the Fourth Schedule, which caused financial strain for travel agencies during refund disputes.

Tan called for its abolition or a complete overhaul, stating, “The pandemic revealed the weaknesses in our regulatory framework. We cannot afford to wait any longer.”

Frustration Over Delayed Reforms
Despite promises from the Ministry of Tourism, Arts, and Culture (MOTAC) to address these issues, stakeholders remain frustrated by the lack of progress.

“The Tourism Industry Act has stagnated for over two decades, despite repeated calls for reform. Malaysia’s private sector, the lifeblood of our tourism industry, deserves better,” Tan stressed.

A Call to Action
Tan urged MOTAC to move beyond rhetoric and take bold, decisive steps to modernize the Act. “No more empty promises.

Malaysia’s tourism industry needs leadership, vision, and action—now.”

With the tourism sector serving as a cornerstone of Malaysia’s economy, modernizing its regulatory framework is critical to maintaining its competitive edge and supporting recovery in a rapidly evolving global landscape.