Penang is a favored tourist destination in Malaysia. It has got beautiful beaches and is also known as the "food paradise" of Malaysia. The local food is so well appreciated that the Time magazine recognized it for having the best side stall food among Asian countries. Tourists like visiting Penang. because they can choose from a wide variety of activities. They get to taste the delicious local food, there are satisfying opportunities for sightseeing, shopping and recreation. Some good malls include The Gurney Plaza, The Queensbay mall and the Komtar shopping complex. The area also has a great nightlife. In fact those who are planning to visiting this island can be assured of one thing that is, they will never be found wanting of interesting activities.

The capital of Penang is called Georgetown which is historically important and has been listed as a World Heritage site by Unesco. Penang has got some of the most beautiful beaches of the world which makes it Malaysia's most highly frequented island resort. The shoreline of the northern island has a long stretch of beaches. This area used to be very quiet and peaceful till a decade back, but now it is being rapidly developed. The whole stretch is spotted with luxury beach resorts, restaurants, and shopping centers. One can also find people indulging in various water sports on this stretch. Towards the north-western part of the island there is a fishing village called Teluk Bahang, this area leads to some secluded beaches like Muka Head, Pantai Kerachut and Teluk Kampi.

The local people of Penang Island can speak English very well so tourists do not face much communication problems. Accommodation is easily available as there is no dearth of hotels on this island. The prices of rooms usually vary across the year. The most popular areas include the Batu Ferringhi beach, the Gurney Drive and the center of the downtown.

The peak tourist season is during Christmas which stretches through New Year's Day and the Chinese New Year which generally falls on any day from the end of January to the middle of February. During this time of the year Penang Island is packed to the brim with European tourists.

Apart from tourism, the island is also a popular spot for electronics factories. Several MNCs have established their manufacturing units in the island, they include giants like Dell, Intel, AMD, Seagate and Motorola among others. This has also led Penang to be recognized as Cyber-City since 2004.