121 CHAPTER 4 THE HOMESTAY SECTOR 4.0 World Tourism Industry: An overview 4.1 The Ecotourism Industry in Malaysia 4.2 Homestay as a Potential Business in The Ecotourism Industry 4.3 Homestay in Malaysia 4.4 Issues and Challenges 4.4.1 Operator Issues 4.4.2 Product Issues 4.4.3 Marketing Issues 4.4.4 Consumer Issues 4.5 SWOT Analysis 4.6 Basic Strategy Tenants (Strategic Tracks) for the Homestay Sector 4.7 The Supply Chain 4.8 Recommendations 4.9 The Homestay Sector Priority Action List 4.10 The Homestay Cluster 4.11 Summary 122 4.0 WORLD TOURISM INDUSTRY: AN OVERVIEW The United Nations World Tourism Organisation (UNWTO) World Tourism Barometer reports that within just four months, i.e., between January and April 2012, a total of 285 million international tourists have travelled worldwide. This number has grown by 5.4 per cent compared to the same period in 2011. The growth was strongest in North Africa (+11 per cent) followed by South Asia (+10 per cent) and Central and Eastern Europe (+8 per cent). UNWTO further forecasts that around 415 million tourists will travel abroad between May and August. It was expected that international tourism would increase by three (3) to four (4) per cent by the end of 2012 The revenue generated from tourism globally exceeded US$1 trillion in 2011, the highest record ever. In the same year, a total of US$196 billion was generated from international passenger transport, and this brought the total international tourism revenue to be US$1.2 trillion (UNWTO, 2012). Europe recorded the largest share of international tourism receipts (45 per cent), followed by Asia and the Pacific (28 per cent), Americas (19 per cent), the Middle East (4 per cent) and Africa (4 per cent). Notwithstanding the global economic uncertainties, the tourism market remains resilient and is a growing business. It commensurates with 30 per cent export of the world’s services. In addition, revenue from the tourism industry also corresponds to the total export of the world’s goods and services, which amounts to six (6) per cent.Taking into consideration exports data on a global perspective, tourism ranks fourth after commodities like chemicals and food. However, tourism ranks first in most developing countries (UNWTO, 2012). In general, both advanced and emerging economies benefited from the 2011 growth in arrivals and revenues. Tourism potentially brings in earnings in foreign exchange, creates employment opportunities, reduces income and employment disparities, strengthens linkages among economic sectors and helps alleviate poverty. Hence, tourism spurs economic development in many developing countries. 123 4.1 THE ECOTOURISM INDUSTRY IN MALAYSIA Under the realm of tourism is ecotourism that has been gaining popularity. Ecotourism is becoming a growing source of revenue in many countries. Typically, ecotourism involves travel to destinations where flora and fauna and cultural heritage are the primary attractions. The underlying beauty of ecotourism is that it protects nature and its habitats whilst at the same time it contributes to the well-being of local communities. The International Ecotourism Society (TIES) defines ecotourism as ‘responsible travel to natural areas that conserves the environment and sustains the well-being of local people’. It also offers tourists insights into the impact of human activity on the environment, and helps foster a greater appreciation of natural habitats. In promoting ecotourism, the local population should also benefit economically and culturally. Local communities, governments and the private sector should collaborate to provide incentives to protect the natural resources, culture, and heritage that appeal to and attract tourists. In Malaysia, the government has been paying much attention towards the ecotourism sector. This sector has been gaining attention since its introduction in the Seventh Malaysian Plan (7MP). In the Tenth Malaysia Plan (10MP), the tourism sector has been identified as a driver of economic activities that will contribute to the growth and distribution of wealth. It envisages Malaysia being within the top ten countries in terms of global receipts (NEAC, 2010). With much attention given, Malaysia recorded a total of 24,714,324 tourist arrivals in 2011, with tourism revenue increasing to RM58.3 billion, making the tourism industry the seventh largest industry that contributes to the country’s Gross National Income (GNI). This favourable growth is in line with Malaysia’s Tourism Plan 2020, with a target to achieve 36 million tourist arrivals and RM168 billion in tourism receipts by 2020. The statistics of tourist arrivals for 2010 and 2011 are tabulated in Table 4.0. Table 4.0 : Statistics on Tourist Arrivals in Malaysia in 2010 and 2011 Country of Residence 2010 2011 Growth % Singapore 13,042,004 13,372,647 2.5 Thailand 1,458,678 1,442,048 -1.1 Indonesia 2,506,509 2,134,381 -14.8 Brunei 1,124,406 1,239,404 10.2 Philippines 486,790 362,101 25.6 Vietnam 159,271 173,783 9.1 Cambodia 48,618 49,472 1.8 Laos 38,111 29,520 -22.5 Myanmar 72,792 81,946 12.6 China 1,130,261 1,250,536 10.6 Japan 415,881 386,974 -7.0 Taiwan 211,143 233,783 10.7 South Korea 264,052 263,428 -0.2 India 690,849 693,056 0.3 Saudi Arabia 86,771 87,693 1.1 UAE 25,645 24,212 -5.6 Iran 116,252 139,617 20.1 Canada 91,701 86,015 -6.2 U.S.A 232,965 216,755 -7.0 Australia 580,695 558,411 -3.8 New Zealand 66,152 81,387 23.0 United Kingdom 429,965 403,940 -6.1 Denmark 24,869 22,269 -10.5 Finland 21,355 19,969 -6.5 Norway 22,773 19,891 -12.7 Sweden 48,971 44,138 -9.9 Netherlands 114,887 90,590 -21.1 France 111,175 127,980 15.1 Germany 130,896 124,670 -4.8 Switzerland 27,894 25,802 -7.5 Russia 32,075 38,918 21.3 Austria n.a 13,082 n.a Italy 47,068 43,864 -6.8 Turkey 9,149 8,577 -6.3 South Africa 26,395 31,441 19.1 Others 680,178 792,024 16.4 Grand Total 24,577,196 24,714,324 0.6 Source : Tourism Malaysia with the cooperation of Immigration Department (Tourism Malaysia, 2012a) 124 Positive growth in arrivals was recorded mainly from countries such as Kazakhstan, New Zealand, Russia, Iran, South Africa, France, Myanmar, Taiwan, China and Brunei. Collectively, this is due to strong promotional efforts, the opening of Tourism Malaysia office in Auckland, as well as the increase in the number of flights to Malaysia. However, the number of Indonesian tourists showed a decline of 14.8 per cent. This may be due to the abolition of its fiscal fee which allowed Indonesian travellers to go abroad without making a stop- over in Malaysia. From the period of January to June 2012, Malaysia recorded tourist arrivals of 11,632,478, a positive growth of 2.4 per cent from the same period in 2011. 4.2 HOMESTAY SECTOR TO BOOST ECOTOURISM INDUSTRY The homestay sector is an ideal route to tap into within the ecotourism industry, as not only does it cater to guests’ needs, it also creates jobs for locals and thus helps contribute to the growth of the nation’s economy. Village-based homestays also open doors for other cottage industries to thrive upon with the influx of tourists into rural areas. In Malaysia, homestay programmes that are recognised by the Ministry of Tourism (MoTour) are not classified as accommodation facilities. Instead, homestay programmes prioritise lifestyle and experiences, predominantly covering cultural, nature-based and/or adventure- based activities. The homestay programme in Malaysia was first launched in 1995 in Temerloh Pahang. The programme has since marked the participation of the local communities from every state. It is one of the Government’s initiatives to promote ecotourism and to provide support for rural communities. The main objectives of the homestay development policy are to utilise the available resources in villages or the kampongs, to conserve and maintain the local socio-cultural life, arts and customs of the village, and to highlight the uniqueness of village life. Unlike the guest house or bed and breakfast (B&B) concept, homestay guests will have the opportunity to stay with the family of the homestay owners or operators. In this way, guests are able to learn and experience living in a different culture and environmental setting. 125 As of 2011, there were about 150 homestay programmes with 3,211 operators throughout the country. From January to May 2012, a total of 133,689 tourists visited Malaysia’s homestay destinations. Of this figure, 110,322 were domestic tourists and 23,367 were international. This marked a 70.7 per cent increase for the same period in 2011, with 78,333 tourists. Tourist receipts from homestay programmes from January to May 2012 proliferated to RM 7,376,446.50 (+53.1 per cent) compared to RM4,817,158.30 in the same period in 2011. Table 4.1 lists tourist participation in homestay programmes in Malaysia from 2009 to 2012. Table 4.1 : Tourist Participation in Homestay Programmes in Malaysia from 2009 – 2012*. Year Tourist Participation in Homestay Programmes 2009 161,561 2010 196,472 2011 254,981 2012* (January – May) 133,689 Source : Ministry of Tourism Malaysia Table 4.2 tabulates homestay statistics in Malaysia for the year 2011. Proudly, Sarawak marks the highest number of registrations, followed by Sabah, Selangor, Johor and Pahang. Johor indicates the highest number of villages involved in homestay activities, while Selangor the highest number of rooms offered. Table 4.2 : Homestay Statistics in Malaysia, as of 31 December 2011 State No. of Homestay No. of Villages No. of Participants No. of Rooms Perlis 3 3 56 64 Kedah 14 19 296 393 Pulau Pinang 9 9 200 227 Perak 6 30 231 308 Selangor 15 18 458 660 Melaka 7 7 115 173 Negeri Sembilan 8 26 231 354 Johor 16 35 478 623 Kelantan 6 7 133 133 Terengganu 6 6 104 106 Pahang 14 19 249 376 Sarawak 26 28 418 583 Sabah 16 25 228 438 Labuan 3 3 79 97 TOTAL 150 236 3,211 4,309 Source : Ministry of Tourism (2012) 126 4.3 HOMESTAY IN SARAWAK The Homestay Programme in Sarawak was first launched on 9 May 2006 and among the first few programmes established were Homestay ABAS Kg. Panglima Seman, Homestay Kg. Benuk and Homestay Kg. Mongkos. Homestay Kg. Maludam and Homestay Kg. Teluk Melano were registered on 15 May 2006 whilst Homestay Kg. Senau followed suit on 19 July of the same year. There are various homestay activities that can be offered and further enhance the guests experience. The activities on offer include craft demonstration, interaction with house owner, experiencing local wedding culture (Iban, Malay, etc.), cultural show, rubber tapping, traditional cooking demonstration, paddy harvesting and fishing, to name a few. BOX 4.0 History of homestay programme in Malaysia The Malaysian homestay programme was first launched in 1995 at Kpg. Desa Murni, Kerdau,Temerloh, Pahang by the Minister of Culture, Arts and Tourism Malaysia under the Rural Tourism Master Plan. It aims to promote rural community participation in the tourism industry.This initiative has now expanded to the rest of the country and is jointly coordinated by the Ministry of Tourism, the Ministry of Rural and Regional Development, state governments and the Malaysia Homestay Association. Source: http://malaysiantour.org/malaysia-homestay-experience/ Source: http://go2homestay.com Living with culture Living with Host Family (Kampung Gedong, Sarawak) 127 The homestay sector in Sarawak saw a growth in number, from just 6 homestay programmes in 2006 to 32 programmes registered in 2012, involving 418 operators. Homestays are spread across the rural areas of Sarawak, from the southern tip of Sarawak of Tanjung Datu, to its northern tip of Ba’kelalan, providing accommodation and other tourist services in interior Sarawak. Table 4.3 shows the participants of homestay programmes in Sarawak by ethnic group. Refer to Appendix A4.0 for a list of existing homestays and the activities on offer. Table 4.3 : Sarawak Homestay Programmes Participants by Ethnic Group Bil Ethnic Group No. of Participants 1 Malay 125 2 Iban 100 3 Bidayuh 110 4 Orang Ulu (including Kelabit + Kayan) 59 5 Melanau 10 6 Lun Bawang 14 Total 418 Source : Kementerian Pelancongan Sarawak (2012) The Federal Government, as well as the State Government of Sarawak has been very supportive of the homestay industry in Sarawak. In RMK-9, a total of RM250,000 was allocated to upgrade homestay facilities. The RMK-10 sees a better deal for the homestay industry, with RM5,687,800.00 allocated for the same purpose, which sees about 21 homestay programmes benefited by the project (Kementerian Pelancongan Sarawak, 2012). Table 4.4 below shows the annual homestay revenue in Sarawak from 2007 to 2011. It shows a positive increment in the number of tourists and revenue contributed by the homestay sector throughout the period. These were directly contributed by an increase in the number of villages and homestay operators involved. Additionally, the active engagement of various parties, including Ministry of Tourism Malaysia and Sarawak, boosted the homestay industry in Sarawak. Table 4.4 : Annual Homestay Revenue in Sarawak (2007-2011) Year No. of Villages Homestay Operators No. of Tourists Revenue (RM) Domestic International 2007 14 152 414 186 144,648.90 2008 16 172 5,586 9,915 413,823.33 2009 19 233 9,483 4,310 653,397.61 2010 19 233 7,039 2,348 782,512.36 2011 27 408 10,554 2,064 978,703.62 Source : Ministry of Tourism, Sarawak 128 For the purpose of this report, the State is classified into three geological zones: Southern, Central and Northern. The homestay programmes could be categorised based on activities offered in these three zones. Table 4.5 shows the homestay programmes by zone, district and geographical attractions, while Table 4.6 lists the homestay programmes by division, zone, number of participants and by number of rooms. Table 4.5 : Proposed Homestay Programmes by Zone, District and Attractions Zone District Geographical Attractions South Kuching, Kota Samarahan, Sri Aman, Lundu, Padawan, Serian Culture, Agriculture and Aquaculture Activities North Bintulu, Miri, Limbang, Lawas, Niah Adventure, Agriculture and Culture Activities Central Tanjung Manis, Mukah, Oya, Belaga, Kapit, Song, Pelagus, Baram. Bario Coastal Livelihood, Cultural, Agriculture Activities, Extreme Activities (bush walking, jungle trekking, fishing, mountain bike riding, etc.) Table 4.6 : Homestay Participants in Sarawak Homestay Programs No. of Villages No. of Participants No. of Rooms Zone KUCHING DIVISION 12 169 215 Kampung Telok Melano, Sematan 1 15 15 S Kampung Telaga Air 1 14 17 S Kampung Tanah Hitam, Sematan 1 8 10 S Kampung Pueh, Sematan 1 17 20 S Kampung Annah Rais, Padawan 1 16 33 S Kampung Panglima Seman Lama 1 10 10 S Kampung Benuk, Padawan 1 13 19 S Kampung Buntal 1 11 11 S Kampung Siol Kandis 1 9 9 S Kampung Santubong 1 23 28 S Kampung Darul Islam Belimbing 1 22 22 S Kampung Krokong, Bau (new) 1 11 21 S SAMARAHAN DIVISION 2 31 48 Kampung Mongkos, Serian 1 12 23 S Kampung Tebakang Melayu, Serian 1 19 25 S SRI AMAN DIVISION 1 10 13 Rh. Wilson Bana, Po Ai (new) 1 10 13 C BETONG DIVISION 1 9 9 Kampung Maludam, Betong 1 9 9 C SARIKEI DIVISION 1 13 19 Rh. Nyuka, Ulu Sarikei 1 13 19 C SIBU DIVISION 2 30 33 Rumah Panjang Bawang Assan, Sibu 1 16 16 C Rh. Benjamin Angki, Kanowit 1 14 17 C MUKAH DIVISION 1 10 10 129 Homestay Programs No. of Villages No. of Participants No. of Rooms Zone Kampung Senau 1 10 10 C KAPIT DIVISION 1 12 32 Uma Belor, Sg. Asap Belaga 1 12 32 C MIRI DIVISION 10 120 172 Rh. Patrick, Sg. Tanggap, Niah 1 34 40 N Kedayan (Kpg. Peliau/Gatas/ Bungai) 3 29 30 N Kampung Narum, Marudi 1 13 14 N Kampung Kuala Sibuti, Bekenu 1 13 27 N Homestay bario Highlands (Pa Ukat, Pa Dalih, Pa Lungan) 3 18 48 N Rh. Hillary Tawan Achai, Marudi, Baram 1 13 13 N LIMBANG DIVISION 1 14 N Ba’Kelalan, Lawas 1 14 32 N TOTAL 32 418 583 Legend : N (North), C (Central), S (South) Source : Kementerian Pelancongan Sarawak (2012) Homestay Programme in the South Zone Homestay Programmes in Central Zone Homestay Programmes in the North Zone 130 Figure 4.0 : Homestay by Zones in Sarawak BOX 4.1 Proposed Homestay and Farmstay Programmes in Bario, Sarawak Bario is a remote and isolated community accessible with one hour flight or 14 hours by logging road from Miri. It is located about 400km to the south east of Miri, Sarawak, East Malaysia. Bario consists of a few villages known as Arur Dalan, Pa’Umor, Arur Layun, Pa’Ramapuh, Ulung Palang, Pa’Derung, Pa’Ukat, Paser Puteh, Pa’Lungan Long Dano, Pa’Dalih, Pa’ Ramadu and Long Peluan with a population of around 2,000 people. Kelabit ethnic group dominates the land of Bario. Known for its rich cultural history and lush vegetation, Bario has definitely has great culture, adventure and nature to offer to wanderlusts who are seeking for something different. With no international hotels or inns in the area, Bario is already famous for its homestay including the longhouse. Bario folks are well known for tourists who prefer to join and perform the daily routines of the locales. The availability of ICT facilities in Bario is also of convenience to tourists and it is seen to boost tourism in the area. To add to other adventurous activities that the existing Bario homestays are offering, farmstay is another feasible attraction that can be developed. As most of the inhabitants of Bario subsist on farming, opening the door for agro-tourism can increase the income of the Bario farmers. As they already grow organic plants and raise farm animals, developing a farmstay may not be hard as it is similar to the idea of homestay. Farmstay may offer guests a real experience of farm life. Interesting activities may include feeding animals such as chickens or goats, collecting chicken eggs, milking a cow, planting and picking fruits and vegetables, making medicines from herbs, etc. A farmstay programme is good for the entire family with children and even adults who need to learn where their foods come from or how they are grown. It is an educational programme worthy of support by the government to educate people to be more sensitive towards caring for their food resources and for the diligent farmers who toil hard to provide them food to survive. Bario receives more than 1200 local and international visitors annually. They come to explore the exquisite flora, fauna, culture and adventure experience not offered by others. With no hotels in the area, tourists prefer to join and perform daily routines of the locales. Bario Highlands Homestay programme is registered with Ministry of Tourism with 3 villages taking part (Pa Ukat, Pa Dalih, Pa Lungan). In total, 18 homestay operators benefitted from this programme offering 48 rooms. There are more than 40 residents in Bario which has high potentials to be included in ministry’s homestay programme. One of the potential homestay operators is Hj Mustafa. He is one of the muslim communities in Bario and his homestay offers halal local delicacies and farming activities. Among the activities proposed in Bario are planting and harvesting the famous Bario Pineapple, Beras Bario, poultry farming, cow and buffalo raring. Haji Mustafa and his homestay 131 BOX 4.2: Melaka Case Study: Kampung Morten Kampung Morten (Morten Village) is one of Malaysia’s national heritage sites. It was accepted by UNESCO as a World Heritage on July 1, 2008. The village sits by the historic Melaka River. It was named after J.F. Morten, the Commissioner of Land in the early 1920’s. A quick review of history of the Kampong Morten can be retrieved at http://www.trekearth.com. The State Government of Melaka has taken initiatives to beautify and transform the village into a tourist attraction. The kampung folks were given assistance to maintain and preserve their Malay traditional house architecture and heritage. Now, Kampung Morten has 85 traditional houses and some of the owners offer their homes as homestay destinations for tourists. A river cruise along Sungai Melaka will capture every eye of the tourists, especially at night, when these houses are illuminated. Kampung Morten is not to be missed when visiting Melaka and the homestay experience will carry tourists back in time. Homestay at Kampung Morten, Malacca BOX 4.3: Homestay in Thailand: A Case Study Homestays in Thailand have become increasingly popular since 2004, and their development is expected to continue. Over the span of five (5) years from 2004 to 2009, Thailand’s Ministry of Tourism helped construct homestays in 98 villages throughout the country. Most guests staying in homestays are looking for familiarity/ relaxation/ trip compared to unfamiliarity/ adventure. This is confirmed by a homestay operator of Ban Mae Kampong in Chiang Mai, Thailand. The village, along with other majority village-homestay programmes initiated in Thailand is an example of community-based tourism (CBT), which is introduced to create potential for empowering the community, to enhance community involvement in decision making, and to ensure that the will and incentive to participate come from the community itself. The success of CBT depends on various factors, from the abundance of tourism resources, level of community participation, strong leadership, strength of community organisation, fair benefit distribution, effective natural resource management and sufficient outside support. Strong leadership and well-established organisation within the village are also a great advantage, as the villagers could set the arrangements of an establishment of a homestay in accordance to special requirements and regulations set by the community. In Ban Mae Kampong, tourism management is carried out in the form of a village cooperative, of which 20 per cent of the earnings from the homestay programme will be channelled to the cooperative. Distribution of guests are rotated among the homestay operators, thus, all participants will be given equal opportunity to generate income from their homestay businesses. Regular monthly meetings between the head person, the head of the homestay programme, and participants are held to discuss operational matters of the business. In Thailand, private homestays are also increasingly popular. These provide more sophisticated and well-equipped rooms, amenities and facilities, albeit maintaining the main agenda of a homestay, which is to stay with the house owner. Some of the homestay operators also provide on-request services such as cooking classes, traditional massages, boxing classes, tours, cultural shows, etc. 132 4.4 ISSUES AND CHALLENGES The Sarawak homestay programme offers unique experiences that are based on its culture, including authentic cuisine, culinary products, adventure, and nature. Guests often know their preferences before making a decision to participate in any of Sarawak’s homestay programmes. Based on its niches (ie. culture-based, adventure, or nature), each homestay programme offers a variety of activities, making the visit a memorable one to tourists. Homestay destinations can be reached either by air, river, road or a combination of all these modes of transportation. Undoubtedly, there are some pertinent issues and challenges that are often faced by the sectors involved in the industry. The issues and challenges must be addressed by all involved to improve and to position the Sarawak homestay industry at a higher level, especially in the international market. A concerted effort and collaboration from each player are needed to market the unique experience of Sarawak through its homestay industry. BOX 4.4 The Methods To understand the current issues and challenges in this industry, the views of the operators, guests and government officers in related government agencies were solicited. A mixed method consisting of personal interview and focus group discussion was employed to gain data and information. A total of 52 homestay operator from various divisions were interviewed. Table 4.6 below depicts the number of homestay operators that involved in the interview. A focus group discussion was also carried out on local entrepreneurs, of which two homestay operators participated in the session. To gain consumers’ perspectives on the industry, a survey was conducted on 679 respondents. Interview were also conducted on homestay guests during the fieldwork. Number of Homestay Operators Interviewed (by Division) DIVISION NO. INTERVIEWED Miri 21 Sibu 11 Kuching 8 Sarikei 4 Betong 4 Mukah 3 Samarahan 1 TOTAL 52 133 The third group is the operators who show positive attitudes and aggressively promote their business to the next level. For example, one of the homestay operators in Bario foresees her property to be a centre for training programmes and meetings. She equipped the premise with conference and meeting facilities. She also foresees a museum in her area to showcase the history and the proud heritage of Bario. Conference facilities at Labang Longhouse Homestay, Bario Based on the survey, interviews and focus group discussion, this report highlighted some of the prominent issues and challenges in the industry. Specifically, the issues and challenges are discussed in the following order; operators, products, marketing and consumers. 4.4.1 Operator Issues Commitment to Homestay Programmes A large proportion of homestay operators is Sarawak are registered as members of the national homestay programme with MoTour. However, the registered members can be categorised into three groups. The first group are those who have not been active or have disappeared from homestay business activities due to a number of reasons including financial situation, lack of motivation, less ability to plan for future growth, family matters and so forth. The second group are the passive operators. Often, the operators are retired married couples who are senior in age. In many cases, the younger family members, who are deemed as possible successors of the business, stay away from home due to work commitment and marriage responsibilities. This limits the operation and the lifespan of the homestay business. There is also an element of complacency among operators in that they refuse to develop or expand their homestay business further. They are content with what they have, hence, there is no initiative to develop their property into real business premise. 134 Registration to a Homestay Programme Some house owners who are potentially interested to participate in the homestay programme often shy away as they are not able to meet the requirements set by MoTour. This is unfortunate, because some of the villages have enormous potential to be developed as homestay destinations. The president of the Sarawak Homestay Operators Association as well as the operator of Sri Santubong Homestay, Puan Hajah Jamilah Shukri, continuously gives her fullest commitment to develop the homestay programme around the State. So far, she has convinced a number of rural folks to be involved in the homestay business. Homestay Coordinator Leadership Coordinators in homestay programmes play an important role to promote and market homestay products.The coordinator acts as a referral to all stakeholders involved, including the MoTour, STB, Sarawak Homestay Associations, operators and also guests. A proper distribution system must be set up to give an equal chance for homestay operators to receive guests. A coordinator must also be sensitive to the pricing mechanism of the business to be more competitive in the industry. Good relationship is needed between coordinators and operators. Personal issues and problems between the two groups will impair the motivation to continue with the programme. Without proper coaching and assistance from the coordinator and other participants, the operator may feel the burden in participating with the homestay programme. Some operators refer to a third party to get help in marketing their products through the electronic media. This normally happens when their coordinators are weak or are lacking in communication and technological skills. The third party can very well be guests who have experienced participating in their homestay programmes. Basic Knowledge in Business and ICT Some of the operators are highly educated and have equipped and updated themselves with business knowledge and current 135 However, the information on access to funding and assistance does not reach potential operators, especially those living in rural areas. To some, even though the information may reach the operators, they are constrained with stringent requirements or procedure to apply. Many operators interviewed felt that there is a need for the government to provide more allocation to develop and improve homestay premises and related services. This is to ensure high satisfaction rate among tourists staying in the property. issues. These operators often have less problems managing their businesses. Good communication skills, supported by some knowledge of the history of the area will turn the operators into good tourist guides who can keep guests enchanted and enthralled with their stories. However, there are still many operators who have less education and limited knowledge to run and promote their commerce. Some of them operate their business without a clear business model due to their poor knowledge in business management and accounting. They also lack the appropriate marketing skills to promote their business, particularly modern modes using ICT, such as through websites. With such limitations, they are reluctant to venture and explore the possibility of new products or to expand their business. Some training programmes on basic business skills and communication are needed among the homestay operators to upgrade and enhance their business. Financial Assistance The Ministry of Tourism and other relevant agencies do provide financial assistance to help qualified operators renovate and beautify their homestay premises. This is to ensure that their premises are of better quality and standard. Some assistance given are in the form of loans and grants. 136 4.4.2 Product Issues Basic Necessities and Amenities Homestay products are a combination of both tangible and intangible elements.Tangible elements are the accommodation and the basic needs to support the product.The initial process of establishing and operating a homestay requires an extra effort of the family-members and an accommodation space for visitors within their homes. Some homestay premises are deemed poor in terms of basic necessities such as availability of treated water, power supply, and other amenities (such as Internet connection, first aid kits, hygienic sanitary facilities, etc.). This situation may deter tourists (especially those with children) from visiting these locations. Urbanisation and Rapid Development The core products of homestay are the cultural heritage, natures and its ecosystem. These kind of treats are often sought after by western tourists. However, the threat facing the homestay core products is the destruction of nature in the name of development and urbanisation. Without proper protection and safeguarding measures, the preservation of culture and nature will slowly diminish due to urbanisation and rapid unstructured development. This is the reason why some homestay operators are reluctant to accept physical development. They would rather have nature and the ecosystem in their area remain untouched. Misunderstood Homestay Concept There is an emerging trend of vacant houses advertised as homestays. In fact they are not because they do not provide the ‘experience’ of living in a local’s home. This creates many “unofficial” homestay operators. The homestay concept is often misunderstood by home owners when they do not adhere to homestay programme requirements endorsed by MoTour. Without having proper training and guidance, these unofficial operators may fail to meet the real objectives of what constitutes a homestay programme, and thus tarnish the image of the industry. Accessibility and Infrastructure To participate in a homestay programme, guests must travel to the homestay premise of their choice. While access to urban areas is not an issue, access to homestay programmes located in the interior of Sarawak can be quite a challenge, due to the lack of basic and proper infrastructure. Nevertheless, the challenges and adventure in reaching the homestay destination can also be turned into product components. Product Diversification Notably, Sarawak is very rich in heritage and culture as well as in exotic flora and fauna. The additional value that adds to culture and nature are yet to be explored and identified as homestay’s products. Add-on services will add flavour to the experience. For example, authentic tribal massage can be promoted as an add-on service, and so can flora and fauna, and herbs that are widely found in Sarawak. Herb plantations can be initiated as tourist attractions, and at the same time they can create business for the herbal industry. 137 Some homestay operators develop their own websites, enabling them to promote their services to a wider audience. There has also been some help from individuals and private sectors to set up websites on the programmes, including the products and services offered. It is an initiative welcomed by many homestay operators. For those who have experienced Sarawak homestay, word-of-mouth is still the most frequently cited source of information. 4.4.4 Consumer Issues Guests’ Insights Guests indicated that their choice of homestay is usually guided by the prospect of fun, nature, and culture activities. Nevertheless, the price of the homestay service is still a determinant in their decision of staying at a particular homestay premise. Current transportation services provided by package tour operators and homestay operators can be further enhanced and improved in ensuring the safety and comfort of guests so as to make their visit enjoyable. Cleanliness and hygiene in homestay are two important issues, requiring relevant agencies to support homestay operators achieve the two. Homestay in Sarawak, however, is still lacking in terms of providing add-on services that can support the industry. Some of the hidden traits and potentials of Sarawak are yet to be explored. Hence, Sarawak homestay operators must find ways to enrich the homestay programmes they offer. Lessons can be learned from our neighbouring country,Thailand, that promotes its homestay business very well. Thailand showcases Thai culture, adventure, nature, and a multitude of other activities that can be added upon to promote the industry (refer to BOX 4.3 for Thailand case study). 4.4.3 Marketing Issues Pricing Price is an important element in the marketing mix as it is directly related to revenue. An apparent threat to the sustainability of homestay operations is the different price setting by the homestay operators within the same village. A Star rating concept should be introduced to differentiate the quality of the homestay programme and services offered. However, in most cases, the price settings are done on a whim, without prior knowledge on the current market. This will create an unhealthy competition among the homestay operators. Promotional Activities The effort of MoTour and STB to assist homestay programmes to promote the products through various promotional programmes, and the establishment of websites have indeed enabled operators to reach out for consumers. 138 Satisfaction of Guests There is no proper research to study the level of services in homestay sector. As an initiative to gain feedbacks and comments from homestay guests, the Ministry of Tourism (MoTour) provides guest log books to be placed at the premises of participating homestay operators. However, many tourists or guests hardly make any comments regarding how to improve the premise. Thus, the guest log books do not actually capture the whole experience and suggestions of the guests to further improve the services provided by the homestay operators. From the interview conducted on homestay guests, a low level of satisfaction towards services was garnered. This services concerned are immigration matters, accessibility, tour package, and entertainment.The guests have also indicated the type of assistance they received, and the level of satisfaction towards the services. Guests rated a moderate level of satisfaction for reception during transit, location of the transit and luggage handling during transit. They however rated high satisfaction on the standard of bedroom, sight seing and flora & fauna experience. Guests Profiling While most guests staying in homestays are Malaysians, a majority of international guests are from EU countries and Australia.There is a dire need to increase the occupancy rate for homestay programmes among both local and international guests. The different segments of potential guests and their respective preferences have not been extensively studied. e.g. local and foreign tourists, local corporate or government agencies.This is essential as it will help operators understand the various needs and preferences of consumers/ guests. (e.g. Middle- eastern versus European or African) and different age groups (middle-aged travelers, family with children, young couples, single travelers) or traveling objectives (farmstay or villagestay experiences). Operators do not have any direct method to obtain feedbacks regarding their services. They rely on the coordinators or related agencies to tell them the aspects that need improvement. Action must also be taken to attract different age groups, especially college-aged cohorts who are keener to go for adventure and fun. As of 2010, the number of students in Higher Education Institutions (HEIs) in Malaysia was 1,050,726. This group of community should be targeted as potential consumers of homestay products. Activities engaging HEI students with homestay operators should be encouraged through smart collaborations between the HEIs, Government agencies and the homestay operators. 139 Consumers’ Expectation Being in eco-sensitive areas, consumers expect homestay operators to not adversely affect the environment and cultural integrity of the area. All homestays offer basic accommodation and social facilities such as beds, dining area, lounge, fan, shared bathrooms, and basic housekeeping services. However, many of the homestays do not offer internet connection to the travelers, whilst some places are still without electricity or treated water. On the other hand, in bigger homestay programmes there are homes with air- conditioning, small café area, and en-suite bathrooms. Access Difficulties to Homestay Locales There are homestays within certain popular rural areas which are hindered by the lack of accessibility.There are only limited numbers of intra-regional or international air services that cater for travellers to these specific areas. The homestay industry in Sarawak is boosted by the fact that access into cities, such as Kuching and Miri, is easy by air. Even smaller towns (e.g. Bintulu, Sibu) and certain rural areas (e.g. Marudi, Bario) have airports to facilitate access.These means of entry are able to encourage the already constant stream of locals, alongside foreign tourists, who travel during long holiday periods. Consumers’ Preferences Consumers/guests value rest and relaxation, and adventurous experience provided by homestay operators. In terms of culture, guests indicated that their motive of staying in homestay were mainly due to their interest in the general lifestyle of the local people, followed by arts, longhouse, being in new places, cultural farming, cultural activities, and cuisines. With regard to adventurous activities, the guests’ motives for staying in homestay, were mainly driven by the interest in jungle, followed by camping, mountain, fishing, and hunting. Some of them have included diving, too. As regards the nature, the most important factor that drive them to