Developing Labuan as an international tourist destination: potentials, constraints and processes

Abstract

This thesis explores tourism development potentials, constraints and processes in Labuan, a new island destination, and a Federal Territory of Malaysia. Since tourism itself is a complex and multi-faceted phenomenon, efforts were taken to apply a multidimensional/scale approach in this research. As a result, both qualitative and quantitative data were collected through various techniques like content analysis, interviews, secondary analysis and questionnaire-based surveys. Data were collected from individuals directly or indirectly involved in tourism like policy makers, tourism-related sectors and local residents (primary data), and from printed materials and official publications like annual tourist statistical reports, national plans, tourism booklets and brochures (secondary data). This study attempts to examine tourism development in Labuan from two different perspectives: i) External Environment and ii) Internal/Operational Environment. External environment refers to Labuan's status as an international Offshore Financial Centre (IOFC), a Federal Territory of Malaysia and a duty-free port. The internal/operational environment refers to the tourism system itself that directly impacts on the tourism development process, for instance, transport networks, attractions, tourism stakeholders i.e. tourism-related sectors and host population (supply side), and tourist generating countries (demand side). An attempt has also been made to discuss the characteristics of island destinations, the issues and problems associated with tourism development. This study reveals that tourism development in Labuan has resulted from the development process taking place since its inception as an International Offshore Financial Centre (IOFC) in 1990. Tourism has been the main agenda for Labuan development only since 1997 after the objective of IOFC was not fully realised. The government's aspiration to make Labuan the "International Garden Island of Borneo" implies the government's seriousness in developing Labuan into an international tourist destination. Labuan has the potential to be developed as an international tourist destination mainly due to its economic and political status: as an IOFC, a duty-free port and a Federal Territory of Malaysia. Since Labuan being declared an IOFC, Labuan has experienced massive development for both infrastructural and urban modernisation to facilitate the IOFC status. Apart from that, the existing transport corridors/linkages and hubs, connecting Labuan with other local cities and the nearby international city of Brunei, act as a stimulator for tourist traffics in and out of the island. It is argued that the physical and geographical remoteness that led to difficult access, which characterise many other island destinations, is not true in the case of Labuan. Labuan, unlike other island destinations, does not have financial problems due to its status as a Federal Territory of Malaysia. On the other hand, the island has enjoyed a substantial budget allocation each year for both infrastructural and tourist development Labuan's duty free status is a competitive advantage over other nearby destinations and can be viewed as a tourism asset for Labuan. Local residents' attitudes towards tourism development on this island can be regarded as optimistic. Apart from showing their support to the tourism development, their attitudes imply their high expectations from tourism of socio-economic benefits to the island's communities. However, there are still a number of constraints that thwart the development of those potentials. The constraints result from two major factors: i) the stage of tourism development (Involvement Stage of Butler's Life Cycle), which is characterised by unsystematic tourism structure in the provision and maintenance of tourism products (lack of enforcement, systematic implementation, effective marketing/promotion, local participation in decision-making process), and ii) the smallness of the island, which has led to limited local resources and lack of local provision for human resources development. As a consequence of these two major factors, Labuan's current development standard has yet to fulfil several requirements to meet international status. It is agreed that public/private sector cooperation is one of the solution to these long standing issues of island tourism development. Public/private sector cooperation should be encouraged and established in all areas: policy and planning, development, marketing/promotion and human resource development. An integrated and a holistic approach in the formulation and implementation of tourism policy and planning are crucial to ensure the compatibility between the external and internal environments that shape tourism development processes.