The closure of Malaysian borders to foreigners beginning on 17 March had a negative effect on experiential luxury in 2020. Due to these strict regulations, Malaysia experienced a strong dip in international tourist arrivals, which typically provide an important boost to the sales of luxury goods.
The strict lockdown regulations for locals in Malaysia further dampened growth of experiential luxury in 2020. The country implemented a Movement Control Order (MCO) between 18 March and 4 May which shut down nearly all non-essential activity, and placed operating restrictions on those allowed to remain open.
Beginning in June 2020, the country relaxed some government measures with the Recovery Movement Control Order (RMCO) phase as COVID-19 cases declined. Under these regulations, domestic tourism and interstate travel was allowed to restart in the beginning of July, Hotels were allowed to reopen, although strict social distancing and sanitation requirements were implemented.
Experiential luxury will take some time to recover in the forecast period, as current retail value sales are not set to return to 2019 levels until at least 2024. Demand for experiential luxury is expected to remain low and undergo a very slow recovery due to many factors.
The planned openings of experiential luxury outlets, including luxury hotels, will be delayed by most players in the beginning of the forecast period. Existing outlets are already suffering with low occupancy amid the COVID-19 pandemic, resulting in little incentive to increase the number of sites/outlets.
Since the recovery of experiential luxury will mostly rely on domestic and regional tourism initially, the recovery of the local economy will have an impact on sales in the forecast period. The COVID-19 pandemic is expected to negatively impact at least two million jobs in 2020, which will translate to a loss in disposable incomes in the beginning of the forecast period.
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Understand the latest market trends and future growth opportunities for the Experiential Luxury industry in Malaysia with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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This report originates from Passport, our Experiential Luxury research and analysis database.
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