A STUDY OF RESIDENTS ATTITUDES AND SUPPORT FOR HEALTH TOURISM IN SARAWAK

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1 A STUDY OF RESIDENTS ATTITUDES AND SUPPORT FOR HEALTH TOURISM IN SARAWAK LEONARD ANAK PANJI Project Paper Submitted in Partial Fulfillment of the Requirement for the Corporate Master of Business Administration University Malaysia Sarawak (UNIMAS) 2015

2 DECLARATION Name : LEONARD ANAK PANJI Matric Number : I here declare that this project paper is the result of my own work, except for quotations and summaries which have been duly acknowledged. Signature: Date: 29/05/2015

3 ACKNOWLEDGEMENTS This thesis would not have been possible without the guidance and the help of several individuals who in one way or another contributed and extended their valuable assistance in the preparation and completion of this study. First and foremost, my utmost gratitude to Dr. Norizan Jaafar, supervisor for my project for the Corporate Master in Business Administration at University Malaysia Sarawak (UNIMAS, whose guidance and encouragement I will never forget. Dr. Norizan Jaafar has been my inspiration as I hurdle all the obstacles in the completion of this project. i

4 ABSTRACT This thesis aims to investigate residents attitudes toward Health Tourism in Sarawak and their perceived impacts of such development with significantly influenced their level of support for its implementation. Attitudes and Perceptions-Related studies of local residents towards tourism development have often been done by previous researchers. Similarly, studies involving health tourism from a variety of perspectives, is gaining increasing attention. One component of the study being conducted was based on the local residents perceived impacts as a result of such development and implementation. Whether it has any potential significant positive or negative impacts on the residents; two most common theories being used were the Stakeholders and Social Exchange Theories. Past studies have indicated that residents attitudes have significant effects on Tourism or Health Tourism (HT) development. The results and findings of this study indicate that the local residents perceived positive and negative impacts of HT development were statistically significant which influenced the level of their support for such development. Proper management of stakeholders involved, particularly the level of their involvement in planning and decision-making (within the scope of their involvement) may lead to sustainability of HT development, as well as realizing Sarawak s potential as a preferred HT destination in the region. ii

5 ABSTRAK Tesis ini bertujuan untuk mengkaji sikap penduduk terhadap Pelancongan Kesihatan (PK) di Sarawak dan persepsi mereka berkaitan impak daripada pembangunan, serta melihat sejauh mana signifikasi kesan tersebut mempengaruhi tahap sokongan mereka dalam perlaksanaannya. Kajian berkaitan sikap dan persepsi penduduk tempatan terhadap pembangunan pelancongan sering dilakukan oleh penyelidik-penyelidik terdahulu. Begitu juga dengan kajian yang melibatkan pelancongan kesihatan dari pelbagai perspektif, semakin mendapat perhatian. Salah satu komponen kajian yang dijalankan adalah berdasarkan persepsi penduduk tempatan terhadap kesan akibat daripada pembangunan dan pelaksanaan tersebut. Sama ada ia mempunyai apa-apa potensi kesan positif atau negatif yang ketara kepada penduduk; dua teori yang paling biasa digunakan ialah Teori Pihak Berkepentingan dan Teori Pertukaran Sosial. Kajian-kajian lepas telah menunjukkan bahawa sikap penduduk mempunyai kesan yang besar ke atas pelancongan atau pembangunan Pelancongan Kesihatan. Keputusan dan hasil kajian ini menunjukkan bahawa tanggapan kesan positif dan negatif penduduk setempat terhadap pembangunan pelancongan kesihatan adalah signifikan dalam mempengaruhi tahap sokongan mereka terhadap pembangunan tersebut. Pengurusan pihak berkepentingan, terutamanya pada peringkat penglibatan mereka dalam perancangan dan membuat keputusan (dalam skop penglibatan mereka) boleh membawa kepada kemapanan pembangunan PK, serta menyedari potensi Sarawak sebagai destinasi PK pilihan di rantau ini. iii

6 TABLE OF CONTENTS Page CHAPTER 1: INTRODUCTION Introduction Research Background Sarawak as a potential Health Tourism destination Problem Statement Research Objectives General Objective Specific Objectives Research Questions Theoretical Background Significance of Study Theoretical advancement in Health Tourism study Practical application for Health Tourism planning programs Chapter Outline Chapter Summary CHAPTER 2: LITERATURE REVIEW Introduction Tourism industry in Malaysia Health Tourism in Malaysia Health Tourism Sustainable HT Development Residents Attitudes Level of Support Local Residents Involvement Social Exchange Theory (SET) Stakeholders Theory iv

7 Page 2.5 Theoretical and Conceptual Framework Description of Variables Development of Hypotheses Hypotheses Hypotheses Hypotheses Hypotheses Hypotheses Chapter Summary 53 CHAPTER 3: RESEARCH METHODOLOGY Introduction Research Location Research Design Sample Data Collection Procedure Survey Instrument (Questionnaire) Scale of Measurement Statistical Analyses Descriptive Statistics Exploratory Factor Analysis (EFA) Reliability Analysis ANOVA, Paired Sample T-test & Multivariate Analysis of Variance (MANOVA) Chapter Summary 63 CHAPTER 4: RESULTS ANALYSES Introduction Demographic Profile of Respondents Goodness of measures Principal Components Analysis (PCA) Adequacy of Extraction and Number of Factors v

8 Page ANOVA (One-Way Univariate F-test) T-test (Paired Sample Test) Multivariate Tests (Linear General Model) Hypotheses Testing Findings on Hypotheses Testing Power of Stakeholders Level of Education Local Residents Involvement Dependence on Tourism Reliability Test (Internal Consistency of Factors) Supports for Health Tourism Perceived Positive Impacts Perceived Negative Impacts Significance of Supports Chapter Summary 87 CHAPTER 5: DISCUSSIONS AND CONCLUSION Introduction The Backdrop Discussions Power of Stakeholders Level of Education Local Residents Involvement Dependence on Tourism Support for Health Tourism Perceived Positive Impacts Perceived Negative Impacts Implications Theoretical Perspective Practical Perspective Research Limitations Recommendations Conclusion 100 vi

9 LIST OF TABLES Page 3.1 The research objectives covered under each section of the survey instrument Type of Variables Development of Questions for each Variable Demographic Profile of Respondents Normality Test Sampling adequacy using KMO and Batlett s Tests Total Variances Explained for Eigenvalues and Rotation Sums of Squared Loadings One-Way Univariate F-test Dependence on Tourism Paired Samples Test Multivariate Tests Results of Reliability Test Perceived Positive Impacts Perceived Negative Impacts Supports for Health Tourism 84 vii

10 LIST OF FIGURES Page 1.1 Medical costs in comparison with other countries (2010) A Spectrum of Health Tourism The Proposed Conceptual Model of the study Eigenvalues Scree Plot Histogram of Supports 85 viii

11 A Study of Residents Attitudes and Support for Health Tourism Development in Sarawak CHAPTER 1: INTRODUCTION 1.1 Introduction Several researchers have discussed the use of theories in investigating residents attitudes towards tourism development. Their attention has been focused on factors that are likely to influence perceived impacts and subsequent supports. This study examined how residents attitudes influence supports for Health Tourism in Sarawak based on 210 testable attitudinal questionnaires being conducted in Kuching recently. According to (Bhuiyan et al., 2011), the three most important economic features of tourism in developing countries are income generation, employment opportunity and foreign exchange earnings. Tourism can contribute to both macro and micro level economy development of a country. At macro level, tourism is a catalyst for foreign exchange earnings, revenue generation, balance of payment and contributing in gross domestic production (GDP). Community involvement, peoples well-beings, job creation, income distribution, sustainable regional developments are micro level contributions of tourism. This industry effects positively on the Malaysian economy for increasing foreign exchange earnings, and employment opportunities). The tourism industry is one of the most lucrative industries in Malaysia, expected to garner total receipts of RM168 billion by

12 The expected figure is disclosed by Tourism and Culture Minister Datuk Seri Mohamed Nazri Abdul Aziz, as Malaysia bound to benefit from the targeted 36 million tourists arrivals by 2020 under the Malaysia Tourism Transformation Plan (MTTP) initiated last year. According to data provided by the Ministry of Tourism Sarawak, the state recorded RM6.62 billion in total tourism receipts in 2010, RM7.91 billion in 2011 and RM8.57 billion in 2012 (Borneo Post Online, November 10, 2013). The healthcare sector in Malaysia is often regarded as the most critical sectors in the country. Not only in term of potential revenue earning, but it is considered as a sector that could potentially generate social impact to the public through the work, at the same time tech medical experts and the upgrading of infrastructure. It also is one of the industries that have been identified as National Key Economic Areas (NKEA) under the Economic Transformation Programme, which aims to transform Malaysia into a high-income nation by It is divided into several segments. One segment focuses on areas identified as tourism treatment. Since seven years ago, it has grown rapidly and makes Malaysia as a popular destination for tourists who seek medical treatment. Governmental and private sectors can work together to improve the credibility of Malaysia as a destination for high-quality health care and affordable cost. In 2011, the Malaysian government has dedicated 4.7% of GDP for this sector, flowing mostly to support the network of hospitals and clinics. With the aim of encouraging the private sector to contribute to the development of health care options being offered, the government has given tax breaks to private new hospital or expanding the existing medical center. 2

13 Incentives are offered to institutions that received recognition from the Joint Commission International (JCI) or Health Quality Association (MSQH) which monitors the international medical standards. Until 2012, JCI Malaysia has gained recognition for eight hospitals, while 85 hospitals have been acclaimed by MSQH. A large number of the private health care institutions also enhance their efforts to gain recognition. Realizing the enormous potential of both industries in term of generating foreign earnings inflow, it is therefore interesting to look at health and tourism as an industry that could potentially place Malaysia as a popular health tourism destination in years to come. However, how that could be translated into reality depends on a number of factors. Tourism development has been widely recognized as a double-edged sword for host communities. According to (Jafari 2001), not only does it generate benefits, but it also imposes costs. Based on evaluation on these benefits and costs, local residents develop their attitudes toward tourism. Numerous studies have been conducted to find variables influencing residents attitudes toward tourism (Brougham & Butler 1981, Perdue et al. 1987, Ap 1992, Lankford 1994, Cavus & Tanrisevdi 2002). However, there are mixed results in relation to those tested variables which include residents socio-economic and demographic attributes. Notably, it is not clear whether residents attitudes toward tourism are related to their attributes when tourism is still in its early development stage in the host community and its impacts are not particularly noticeable (Mason & Cheyne 2000). 3

14 Most authors agree that initial community attitudes toward tourism are critical to community involvement in the industry (Murphy 1981), the formation of destination image (Echtner & Ritchie 1991), political support for development (Schroeder 1996), and ultimately a more sustainable development of the host community (Owen et al. 1993). The level of residents support is therefore critical to ensure sustainability of HT development, as most studies suggest its association to residents Perceived Positive Impacts (PPI) and Perceived Negative Impacts (PNI) with come with the development. The Stakeholders Theory and Social Exchange Theory will be based upon in this study to measure the extent of residents involvement and participation that may significantly affect the amount of support to make it sustainable. In the context of Sarawak, local sentiments and hidden factors which may have certain degree of influence that constitute to what they perceived as beneficial or detrimental to their quality of life Research Background Health Tourism concept was first introduced in Malaysia in 1998 by the government as a strategy to deal with the Asian economic crisis, with focused on diversification of economic activities that can generate and contribute to national income According to the Association of Private Hospitals of Malaysia, in 2006, the revenues from health tourism industry is of RM million (USD 59 million). The rate of tourist arrivals to Malaysia for medical services has increased by 25.3% from 1998 to 2008 (International Medical Travel Journal). 4

15 The Government has identified the industry as an industry which will significantly contribute to the national income and is working actively to promote Malaysia as a center for health tourism industry in the region. Accordingly, the government has established the National Committee for the Promotion of Health Tourism in Malaysia (The National Committee for the Promotion of Heath Tourism in Malaysia) to carry out work on promotion. Other members of this committee is, "Malaysian Industrial Development Authority, the Malaysian Association of Tour and Travel Agencies, Malaysian Airlines System, the Primary Care Doctors' Organisation of Malaysia," and other tertiary hospitals. Health tourism in Malaysia is divided into two categories: medical tourism and health program. A patient can choose to receive treatment in any hospital which is known internationally and stay in Malaysia until cured or they can travel to Malaysia to visit the hospital to see the infrastructure available and suitable for them before undergoing a medical. Two important factors that caused Malaysia to be the choice for medical tourism are low and competitive medical cost, as well as sophisticated and modern infrastructures. For example, heart surgery in Malaysia is in the range of RM 18,000 to RM 21,000 as compared to the United States, valued at RM 60,000. Malaysia offers a cheaper and competitive medical costs price as compared with the United States and European countries and in Asia. 5

16 Figure 1.1: Medical costs in comparison with other Countries (2010) Source: International Medical Tourism website According to a study by a consulting firm; Frost & Sullivan industry in the International Medical Travel Journal, medical tourists pay attention to three things that are important when choosing a destination for treatment, namely, doctors and nurses who are accredited, ease of access to the hospital and accommodation facilities. Malaysia has the advantage of all three factors. The study also shows that Malaysia has political stability which is another advantage to Malaysia. The economic crisis has led to sustained increased medical costs in Western countries and that have led many chose to undergo a medical in Asian countries that offer similar treatment and infrastructure. In some countries, patients have to wait long to get treatment, causing them to choose Malaysia as their destination for treatment. In Malaysia, Penang is a major center for this sector, followed by Langkawi. 6

17 1.1.2 Sarawak as a potential Health Tourism destination Based on the statistic derived from the Sarawak Tourism Board ended December 2014 this year, Sarawak recorded a grand total of 4,337,528 tourist arrivals, a slight decrease from 4,371,748 in 2013 but fair better than year 2012 of 4,069,023. Of the total tourist arrivals last year, 2,679,658 were foreign tourists. Of these, the influx of tourists from Brunei is the highest with a total of 1,723,043, followed by tourists from Indonesia around During the same period, domestic tourists accounted for 1,657,870. Based on these records, the tourism industry in Sarawak has huge potential for further growth. In order to achieve this, the state government should put more effort into promoting the tourism sector by extending the scope of tourism by offering more attractive packages. Health tourism is one of the tour packages that have great potential to be explored if Sarawak wants to compete with other destinations as a preferred tourist destination, either from foreign countries or inside the country. Sarawak has huge potential for health tourism industry in view of recognized high standard health services offered by medical centers in the state. Quoting Minister of Tourism Datuk Talib Zulpilip (after opening the 15 th Islamic Medical Association of Malaysia)in the Bernama report dated December 14, 2014;based on positive growth recorded throughout the year through the presence of foreign patients, the state government will further enhance the promotion of health tourism industry. Talib said the state government sees huge potential for the industry, thus aiming to further promote this year. Initially, such campaign is only targeted at Kalimantan. 7

18 This year, the campaign will be further extended to other countries that are close. It is hoped that patients from the Philippines, Thailand and the countries of high medical costs, will make Sarawak as their preferred destination. When asked whether the number of medical centers in Sarawak is enough to accommodate the expected growing number of patients if destined to be a health tourism spot, Talib expressed confidence in the presence of more patients can be accommodated by medical centers available. Currently, there are four medical centers that handle medical tourism based treatment in Kuching. They are Normah Medical Specialist Centre (NMSC), Timberland Medical centre, KPJ Specialist Centre and Cardiac Centre. Three others are located in Sibu, Miri and Bintulu. According to statistics disclosed by the Minister of Tourism, Datuk Amar Abang Johari Tun Abang Haji Openg during the Breaking Fast with Ministers ceremony at the Borneo Convention Centre Kuching (BCCK) July last year, the medical tourism industry showed a remarkable increase in the number of tourists by 10% compared to the previous year's1.9 million people. He pointed out that Sarawak became the target destination of foreign tourists who want to get medical treatment. Currently, the state government is collaborating with the State Economic Development Corporation (SEDC) for providing medical facilities in Damai Beach Resort, Santubong as the tourist center has natural medical treatments like reflexology therapy that can be developed into one of the attractions in the health tourism industry (Utusan Sarawak Online, July 11, 2014). 8

19 He further elaborates that most foreign medical tourists are from Indonesia and there was an increase in the number of domestic visitors from Peninsular Malaysia to seek treatment at private hospitals. To achieve its aim as a medical tourism destination, support factors also play an important role. It must be recognized that the importance of tourism stakeholders in its attempts to make health tourism more sustainable, will only be possible with the collaborative assistance of the following key tourism stakeholders: the tourism industry, Public Sector Support Bodies (such as the Sarawak Tourism Board, Government departments, National and Regional Agencies, local authorities and destination groups); visitors; and local communities. Understanding the role of different stakeholders and what their views are about tourism development in the area and benefits and challenges may assist in determining the future management of a destination. 1.2 Problem Statement Sarawak is rather unique; taking into account diversities of its geographical landscape, historical background, ethnicity composition, population distribution, politic and socio-cultural it has. Hence, Health Tourism development is of huge significant to the community if the government wishes to make the state a preferred HT destination. In term of area, Sarawak is the biggest state in Malaysia with vast of the area is still covered by thick jungle, unexplored and underdeveloped as compared to its West Malaysia counterpart. Clearly it possesses highly diverse flora and fauna, as well as rich natural resources to tape. 9

20 Unfortunately, development has not been comprehensive due to poor accessibility to areas that are of high economic value to explore. This has led to poor communication between the people in rural areas and the urban areas. Many are still commuting the traditional way by river transports amid dangerous rapids and irregular tides. Hence, it is difficult to market their products outside their own areas, seeking medical treatment, education and so on. The source of income is generally very low and costs for travelling are numerous times higher than those closer to development. If developments can to be brought into these areas, they certainly reduced the problems of the rural population as well as migration of the inhabitants to urban areas in search for better employment opportunities. Therefore, Health Tourism is seen as an important sector that can be developed for the benefits of these communities. With improved infrastructures like roads, schools, clinics and other facilities, not only increase the source of their income but also their quality of life. Sarawak has a few hospitals that offer medical tourism facilities across the state but do not have a lot of health centers such as spa, therapy, treatment based on herbs, yoga and so on, to meet the demand if it is to be recognized as a center of choice for health tourism. The most recognized center that offers such a package is available in Damai Beach Resort. There may be other health centers that offer such services but the number is very small and less known. The dynamic growth of the tourism industry has enabled this sector is seen as a driver that increases and stimulates economic growth of a country (Ashley et al., 2007). 10

21 The growth and development that occurs not only limited to the destination area but also the positive and negative impacts especially on the economic aspects of the surrounding area (Nicholas et al., 2009). Indirectly, the community living in areas around the tourist destination is impressed by the tourism activity. The general public, especially the tourism industry players in Sarawak must be made aware of the opportunities in the industry and the potential health tourism as a contributor to higher income should not be missed. In the meantime, promotions and information about the industry in Sarawak is too little. Even a large number of the population is still not aware of the opportunity and benefits which could be reaped health tourism industry. If the level of awareness of the population can be improved, it is not impossible that many among industry players and interested entrepreneurs will invest in health tourism. If participation in the industry can be improved, it would help to stimulate the growth of related sectors such as the study of plants and herbs that have medicinal components, spa and sauna with traditional treatments concept, recreation centers that combine sport and wellness, infrastructure development, restaurants and so on. Expected returns generated from the industry not only benefit the industry players but also create more research on health tourism, employment opportunity, higher income to local communities and high revenue to the state government. Increased returns (in the form of GST and Tax collection) in turn, could be channeled to projects development and upgrade the quality of existing facilities as well. 11

22 According to (Mitchell & Ashley, 2010), chain effects as a result of activity involved, whether directly or indirectly; particularly transport, hotel and food were also able to generate higher yields and higher job many (Nowak et al., 2003). Thus, several studies have concluded that tourism activity is a new mechanism that is able to generate and increase local communities revenue. In addition, tourism activities intensified in areas where tourism can be promoted as a product to improve economic conditions, particularly among communities that are considered as marginalized from the mainstream of development. The impacts of tourism on local residents are mixed, emphasizing the existence of negative and positive experienced by the community. However, the positive impact is high, especially in terms of economic and social benefits (Kwon & Vogt, 2010), preservation and appreciation of culture makes it an important tool to be considered as a sector of choice for the development of this community. The resulting impact also depends on the attitude shown by the community affected by activities carried out for the development (Veuren, 2012), phase tourism development in the region (Ribeiro, 2013) and to what extent the community involve with planned development (Krannich, 2011). Attitude shown also affect the extent of local community support efforts in developing the sector in their area (Látková, Pavlina & Christine A. Vogt, 2012; XU et al., 2009). If the attitude of the community guides them towards support for their efforts, then return (whether monetary or non-monetary) obtained is higher than if the development is implemented in areas where the local community has no attitude support for the development (Aref, 2010). 12

23 This is because the local community is the stakeholders and a stakeholder who is directly involved in the development process in their area of tourism (Byrd et al., 2009). Therefore, the impact resulting from any form of development should not ignore other contributory aspects, either directly or indirectly. Sentiments and views of local communities should also be considered, especially in relation to socio-cultural aspect, religious tolerance, race relations and sensitivity to certain ways people live in Sarawak. The most important question is whether developments in the industry seek to raise the quality of life of local communities. Also, the extent to which the projects were developed taking into account their involvement, both in terms of their views or activities planned. Byrd (2007) stated that: for sustainable tourism development to be successful, stakeholders must be involved in the process. Stakeholders are all those who need to be considered in achieving project goals and whose participation and support are crucial to its success. Studies indicate that intensifying the relationship between tourism companies themselves and between them and the policy makers is very important. Besides, it appears that public sector stakeholders play greater roles in both the management and marketing activities than the private sector, as they have a much higher position in the scale of preference. Hence, it is very important to recognize their views, attitudes and perceptions toward HT, with in turn would measure how those aspects can be translated into the level of their support to realize Sarawak s potential as a destination for HT. With its rich culture and heritage and diversity of the state's tourism attractions, combined with health facilities and services of international standards at affordable prices, Sarawak actually has all the "ingredients" which are important as a health tourism destination in the region. 13

24 Therefore, this study is to investigate whether attitudes have significant effect to the level of residents support is Sarawak is to be a health tourism destination of choice among tourists to get treatment and health services during their visit to the state. 1.3 Research Objectives Research objectives of this study shall be based on the general and specific objectives as described below: General Objective The general objective of this study aims to examine residents attitudes influence the level of support for sustainable Health Tourism development. In this context, it is importance to get respondents feedbacks based on a self-administered survey questionnaire, which forms the basis for information and data analyses relevant for this study Specific Objectives Specific objectives of this study aims at identifying the relationships between residents socioeconomic and demographic attributes and their attitudes toward health tourism by focusing on Sarawak; though huge in term of land area but is sparsely populated and considered a small community where health tourism is in the development stage. Hopefully, by conducting this study; it is possible to find the predictors of residents attitudes and capture their current perceptions of tourism based on preconceived expectations and incomplete information about health tourism. 14

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