Last updated Monday, December 22, 2014 11:15am

GEORGE TOWN, Sept 18 —Locals seen taking pictures of a popular mural in Georgetown, Penang. Penang has seen a large growth in tourism, including domestic tourists to the island state. — K.E. OoiLocals seen taking pictures of a popular mural in Georgetown, Penang. Penang has seen a large growth in tourism, including domestic tourists to the island state. — K.E. Ooi While tourism is set to overtake the manufacturing sector as the state’s main economic driver, the future may not be as bright for cafe owners in the inner city of George Town,

More and more cafes and boutique hotels are opening up in the zone but that, ironically, may be the very source of the problem.

Association of Tourism Attractions Penang (ATAP) chairman Ch’ng Huck Theng agreed that tourism is slated to become the most important sector for the state with the increase in tourist arrivals.

“It is now the second most important industry for the state and at the rate of its growth, I won’t be surprised if it becomes the most important one,” he said.

He expects an eight to 15 per cent increase in tourist arrivals which will benefit all ATAP members and also the hospitality industry.

The Mugshot café co-owner, Jesse Tan, said new cafés are opening up at a very speedy rate, with two or three cafés being opened every few months.

“The tourism industry on the surface seems to be thriving so every one is opening a café to cash in but these few weeks, it has been very slow,” Tan said.

The mushrooming of new cafés has inevitably created stiff competition for the existing businesses that have been around for several years.

According to Mathieu Guegan, owner of La Boheme, everyone seems to think the café business is doing very well.

“Everyone thinks it is easy money but it is not because in the end, we actually depend on the locals for regular business, not just tourists,” Guegan said.

He too echoed Tan’s sentiments that the food and beverage industry within the heritage zone has slowed down these few weeks, possibly due to the fuel increase.

“Perhaps people are more cautious with their spending and eating out less,” he said.

Several other café owners noted that there was an increase in domestic tourists but this does not translate into business for them due to the growing competition.

“We can’t fight the big businessmen and big restaurants as they have more funds so we can only hope for the best in our own niche,” Tan said.

“Cafés are opening and also closing all the time,” Guegan pointed out.

Ever since George Town was inscribed as a UNESCO World Heritage Site in 2008, the Silicon Valley of Malaysia has become a major heritage and arts tourism site for tourists, especially from nearby Singapore and China.

No longer highly dependent on its manufacturing sector, the Penang state government is banking on the services industry which is growing rapidly due to the increase in domestic and international tourists.

Malaysian Association of Hotels (MAH) Penang chairman Mary Ann Harris confirmed that hotel rooms in Penang are fully booked most of the time and occupancy rate is also increasing.

In comparison to the first half of 2012, the tourism industry is better this year, she said.

While the occupancy rates in George Town had dropped to 66.57 per cent in 2012 as compared to 67.86 per cent in 2011, this year it increased to 67 per cent, she said.

The global economic crisis affected arrivals from Europe but it is the domestic tourists and those from the region such as Singapore and China that are keeping the industry up this year.

“George Town is now the main tourism site for the region and we are getting more domestic and Singaporean tourists who make up about 50 per cent of the tourist arrivals,” Harris said.

About 48 per cent of the foreign tourist arrivals are still from the traditional market of Australia, the Middle East and UK, she added.

This translated into a rapidly growing services and hospitality industry in the state, especially within the heritage zone.