GIVEN that statistics hardly lie, opposition-slant politicians with a penchant of having a bone to pick with Chinese and Indian nationals better wise up to the fact that these foreigners are significant contributors to the success of the Visit Malaysia Year (VMY) 2026, hence the country’s coffers.
This came about as both Chinese and Indian tourists have of late made their presence increasingly felt in Malaysia. In 11M 2024, for example, China has regained its position as the third largest source of Malaysia’s foreign tourists (11M 2023: fourth) behind Singapore and Indonesia.
“While 11M 2024 total tourist arrivals are still 7% lower than (pre-COVID-19) 11M 2019, 11M 2024 Chinese tourist arrivals are 4% higher than 11M 2019,” observed Maybank IB Research analyst Yin Shao Yang in a Malaysia tourism outlook.
“More encouragingly, 11M 2024 Indian tourist arrivals is a whopping 47% higher than 11M 2019. The continued growth in Chinese and Indian tourist arrivals has a lot to do with Malaysia granting 15-day visa free access to both nationalities in December 2023.”
Recall that Malaysia subsequently extended the visa-free access period for Chinese and Indian tourists to 30 days from 15 days in December 2024 till Dec 31, 2026 to facilitate VMY2026.
“Our conversations with the AirAsia group reveal that they still intend to expand their networks into second and third tier Chinese and Indian cities,” revealed the research house. “Malaysia Airlines and Batik Air Malaysia also expressed similar intentions.”
While it is unsure if the 2025 and 2026 tourism targets can be met, Maybank IB Research noted that it is “reasonably confident that there will be growth due to a combination of the Johor Singapore Special Economic Zone (JSSEZ) and arrivals of more Chinese and Indian tourists”.
“With Malaysia assuming the ASEAN chairmanship this year, we gather that more high yielding business travellers from both countries will visit Malaysia this year as well,” projected Maybank IB Research.
Earlier, the research house stated that if history were to serve as an indicator, Malaysia’s tourism industry upcycles begin not during the VMYs per se but the years preceding them.
“Although VMY2026 is a year away, we are already positive on the Malaysian tourism industry,” reckoned Maybank IB Research.
“Foreign tourist arrivals, tourism receipts and tourism receipts per capita historically start growing in the 2H of years preceding VMYs (i.e. 2006, 2013 and 2019). This is because tourism promotions historically commence six to nine months preceding VMYs.”
The government is targeting foreign tourist arrivals of 31.4 mil/35.6 mil and foreign tourism receipts of RM125.5 bil/RM147.1 bil for 2025/2026. Towards this end, it has set aside an eye watering RM550 mil for tourism promotion this year ahead of VMY2026, the largest in history according to Maybank IB Research’s records.
“We expect Chinese, Indian and domestic tourists to drive growth,” reiterated Maybank IB Research while recommending a “buy” rating on stocks Genting Malaysia Bhd, Genting Bhd, Psvilion REIT and AirAsia X Bhd for their exposure to Malaysian tourism. – Jan 16, 2025
Main image credit: Market Interactive
