South East Asian Games a boost for Malaysia's economy

Kuala Lumpur, the capital of Malaysia, is currently playing host to the 29th South East Asian Games (SEA Games) and is hoping for an economic windfall from the event.

This bi-annual sporting extravaganza has been a fixture on the calendar since 1959. It is 16 years since Kuala Lumpur last hosted the SEA Games and the economic benefits to the Malaysian capital are already multiple, with visitor numbers doubling and a host of blue chip international sponsors on board.

The tournament got underway last week and will continue until the end of this week with athletes from across the region representing their respective countries in a variety of disciplines.

Big-name players likely to benefit from the Games include the online marketplace and hospitality service Airbnb, headquartered in San Fransisco and which is currently valued at US$30 billion. It allows users to lease or rent short-term lodgings and anticipates around 2,000 guest arrivals in the area surrounding the Bukit Jalil National Stadium during the course of the SEA Games.

This represents a 100 per cent increase on Airbnb bookings in the area during the equivalent period last year, the firm says. Interestingly, the spike in bookings is caused primarily by people booking entire houses, which suggests the majority of people flying in for the SEA Games either come with their family or in a large group of friends.

This boost for Malaysia’s tourism industry was confirmed by the Malaysian Association of Hotels (MAH) chief executive Yap Lip Seng who this month told Malaysia's The Star Online that “big sporting events like this are a boon to everyone and this is much appreciated as this year has been a tough one for the industry”.

In 2016 Malaysia had 26.76 million tourist arrivals bringing in 82.1 billion ringgit (Dh70.56bn), says the MAH.

The country’s economy is expanding at a rate that surpasses all but the most optimistic of expectations. From April to June of this year it showed 5.8 per cent growth in comparison the equivalent period 12 months ago, according to Bank Negara Malaysia (BNM). That exceeded most economists' forecast of a 5.4 per cent expansion.

BNM said given the strong growth in the first half of 2017 at 5.7 per cent, the economy is expected to expand by more than 4.8 per cent in 2017.
The economic impact of hosting the SEA Games goes well beyond the hotel and tourism sector. The overall figure for revenue raised from official sponsors this year has already passed the 100 million ringgit mark with both local and international brands investing significant sums of money, organisers say.

Platinum sponsors of the SEA Games pay anything from 7.5m to 15m ringgit to have their brand associated with the competition. This year the list of companies that have signed up to be top tier commercial supporters consists of FBT, Petronas, Peugeot, Ajinomoto, rapidKL, Naza and Telekom Malaysia, known as TM.

FBT is a manufacturer of sporting equipment based in Thailand. Its deputy managing director Monchai Chokephaibulkit believes sponsoring the 2017 SEA Games can help raise the company’s international profile,

“FBT is honoured to be the platinum sponsor of the 29th South East Asian Games. The move helps promote the Thai sport industry in Asean,” he says.

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For local Malaysian brands there is a strong synergy because their employees have the opportunity to attend live sports at the Games. The deputy minister of youth and sports, Datuk M Saravanan, is hoping that the event’s local partners will offer support that goes well beyond the financial realm.

“It is my hope that our sponsors will continue to provide their full support, including encouraging their employees to attend any of the events that will be held at 44 different locations around the country to witness the KL2017 Games and cheer on the national team,” he says on the SEA Games website.

International tournaments such as the Games have the potential to stir up patriotic fervour and attract large-scale TV and online audiences. In 2015 the tournament was held in Singapore where the opening and closing ceremonies’ attracted a domestic audience of 3.3 million, according to estimates, representing 64 per cent of the people aged 4 and up in the country.

This year 2,933 media members are expected in Kuala Lumpur where they will be housed in a 35,000 square foot centre which consists of 744 work stations. The event is broadcast by RTM and Astro Arena in Malaysia, TVRI and STV in Indonesia, TPT in Thailand, VTV and HTV in Vietnam and Mediacorp in Singapore among others.

The 2017 SEA Games will also see some technological innovations introduced. A bespoke digital platform has been launched that allows people from all over the region and beyond to keep track of the latest updates and watch live matches.

It is two years since the last SEA Games and Khairy Jamaluddin, the minister of youth and sports in Malaysia, says organisers are well aware of how audience habits have evolved in the intervening period,

“The sports fans of today, especially the youth and teens, are very IT-literate and they demand instant access to information in an easy and quick manner especially in knowing the latest developments of their favourite athletes, the results of a match, the medal tally and so on,” he tells the Games website.

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Hosting the 2015 SEA Games cost Singapore S$60.4m (Dh162.7m) while Myanmar was estimated to have spent about 1bn ringgit in 2013. The Malaysian prime minister Najib Razak announced that the budget for hosting this year’s edition of the games would be 450m ringgit and that the money would come out of a 1.2bn ringgit fund set aside for the development of sports.

Malaysia has the third-largest economy in South East Asia and the seventh-largest in the world. The popularity of the event with sponsors and broadcasters means the 450m ringgit will probably prove to be money well spent, while the local economy in Kuala Lumpir is also sure to receive a much needed boost.

Malaysia Tourism is targeting total receipts of 118bn ringgit from 31.8 million tourists arriving this year, the MAH says That would represent a 19 per cent increase in arrivals from 2017. It is an ambitious target but the hope is that hosting the 2017 SEA Games will help to strengthen the tourist industry, improve the country’s international image and bolster the overall economy.