Chapter 1: Introduction
Industry Background
For the last few decades, the tourism industry has been contributed to the growth of the service industry of a developed and/or developing economy in Malaysia (Farzaneh Mola and Jamil Jusoh). According to Deputy Prime Minister Datuk Seri Dr. Ahmad Zahid Hamidi, Penang continues was the leading states in the country in terms of tourism and the industry has dominated 40% of the overall Penang state’s economy (Malaymailonline, 2016). Besides that, Penang was named as one of the 17 best places to visit in the year 2017 by CNN (CNN,2017). Moreover, in the last 5 years, Penang government had set up the Penang Convention and Exhibition Bureau (PCEB) and it has brought in more meetings, incentives, conferences, exhibitions (MICE) programmes which generate a return of RM11.3 billion (Malaymailonline, 2016). Based on data collected by Tourism Malaysia, in the year 2015, Penang received 6.3 million tourist arrivals, which 2.9 million was international tourists and 3.4 million was domestic tourists. (Figure 1)

According to figure 1, the numbers of tourist arrival reach the pick in the year 2014. There is a sharp increase …show more content…
It seems that Penang hotels suffer from low occupancy despite a high head count of visitors. Penang chairman of MAH, Khoo Boo Lim said that “weakened global economy made potential travelers more cautious in spending” (Star, 2015). Many travelers may be taking overnight trips on buses and trains, or bunk down at airports and stations to save costs (nst, 2016). Besides that, he also mentions that the advent of online marketplace and homestay network such as Airbnb, more and more travelers will be staying at cheaper private residences. In terms of numbers, Penang tourism must surely be a huge success going by the headcount, but the low tourism receipts suggest otherwise (Star,