AN ECONOMIC VALUATION OF REDANG ISLAND: TOWARDS SUSTAINABLE TOURISM IN SMALL ISLANDS

In Malaysia, the demand for island-based recreation is increasing rapidly, especially among foreign tourists. This study attempts to capture the non-market value of services provided by the ecosystem as a basis for arguing that island and beach resources in Malaysia are undervalued. Consequently, they are not considered seriously in decisions affecting resource use and allocation. This study estimates the economic value of Redang Island, using an environmental valuation technique - the Travel Cost Method (TCM). The recreational service flows of Redang Island, a popular destination located in the state of Terengganu, were estimated through the consumer surplus generated by the visitors during May and June, 2010. Annual consumer surplus per individual was estimated as USD747 (RM2,286) while annual total benefit was USD57.89 mil (RM177.24 mil). The relatively high value of recreation suggests that the recreational functions of beaches ought to be seriously considered in decisions affecting the allocation and use of such resources. Valuation of natural resources would therefore lead to better resource-management decisions in Malaysia.