Rising costs and concerns about a potential economic downturn have not put a damper on Malaysians’ travel plans this year. In fact, savvy Malaysians are getting smarter with their spending, according to the latest data from global technology company Wise.
After over two years of being cooped up at home, people are starting to travel again, but with notable change to their spending patterns. Wise data reveals that international travel has surged with a 13% increase among their customers in Malaysia during this year’s summer break, between 26th May 26 and 4th June, compared to the same period last year.
All for the fun of it: Malaysian customers are spending more on recreational activities, while cutting back on retail categories like accommodation and shopping
It is no surprise that travellers are making up for lost time, but the inflationary issues have definitely impacted the way Malaysians travel — leading to shifts in spending priorities. Entertainment, leisure, and thrill-seeking adventures are top-of-mind among Malaysian customers, with recreational spending up by a whopping 28.5%.
On the flipside, Malaysians are cutting back their spend on accommodation, shopping and transportation, which signals their willingness to invest more in experiences that bring excitement.
Regional travel on the rise: Thailand and Singapore ranked the most popular destinations for Malaysians:
Malaysians are also increasingly thoughtful about their destination choices, as they seek to stretch their travel budgets. This summer, their top travel picks included hotspots like Thailand and Indonesia, likely due to currency conversions. Meanwhile, long-haul travellers set their sights on far-flung treasures like Japan, Great Britain, and the land Down Under, Australia.
Notably, cash still has a role to play in travel, as many vacationers continued to withdraw from ATMs while abroad, averaging RM681.68 per withdrawal transaction.
“Despite rising costs of living and economic uncertainties, it’s great to see that people still have a strong desire to travel. What’s changed is the way they are spending their holidays and allocating budgets. For instance, people are making cutbacks in certain categories such as shopping when travelling abroad, and indulging in experiences and recreational activities,” said Lim Paik Wan, Country Manager, Malaysia at Wise.
“What’s important is ensuring their efforts to save aren’t futile. Whether it’s marked-up exchange rates or additional ATM withdrawal fees – these are avoidable costs, especially when there are competitive products in the market to use that will save you money. A multi-currency card allows you to hold money in various currencies, and spend in the local currency wherever you are in the world at the mid-market exchange rate, which goes a long way in stretching holiday budgets and gaining more savings over time,” she added.
How to avoid hidden fees when travelling overseas:
Pay in local currency: When you’re travelling overseas, card machines may offer to let you pay in your home currency using Dynamic Currency Conversion. While at the surface level this helps you understand how much you’ll be paying in your home currency, the exchange rate offered is inflated. Choosing to pay in local currency and letting your card provider convert the amount for you will result in a fairer exchange rate.
Know how and when to shop tax-free: Many countries let tourists apply for a VAT (value-added tax) refund and even offer tax-free shopping. This means you can get money back from your purchase abroad. When making large purchases, bring your passport and ask the retailer for a Tax Refund Application.
Do your research: Before shopping abroad, it can be helpful to compare prices online – especially for big-ticket or luxury items. This will help give you a better understanding of whether something is worth purchasing abroad.
Get a Wise Account: With a Wise account, you can spend, send and receive money in over 40 currencies, making it easy to manage your money. Wise always states all fees clearly for every transaction and converts currencies at the mid-market exchange rate so you never unknowingly end up paying more than you should. The Wise account also comes with a card that allows two free ATM withdrawals of up to RM1,000[1] a month, so you don’t have to worry about withdrawal fees while abroad.
Customers in Malaysia can now add their Wise cards to Apple Pay and Google Pay and use it to pay for purchases both locally and internationally.
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[1] Subsequent withdrawals are charged at RM5 per transaction. If users take out over RM1,000 in one month, they will be charged 1.75% on top of that.
