Tourist arrivals expected to hold steady although visitors may cut spending and shorten trips, say experts
PETALING JAYA: Rising fuel prices are expected to slightly slow down momentum for the Visit Malaysia 2026 (VM2026) campaign, but the tourism sector is unlikely to be significantly affected.
Tourist arrivals are expected to hold steady even as visitors spending declines amid cost pressures, said experts.
Universiti Teknologi Mara tourism economics expert Prof Dr Mohd Hafiz Hanafiah said travellers are becoming more price-sensitive, leading many to shorten trips and cut discretionary spending.
“However, rising fuel prices are a structural headwind, not a collapse trigger.
VMY2026 can still succeed, but I deemed growth may be slower and more cost-sensitive, especially for domestic and regional markets where price elasticity is high.
“While arrivals may remain relatively resilient, spending behaviour will adjust downward.
”Mohd Hafiz warned of emerging risks if Malaysia’s cost structure rises faster than regional peers, saying that while the impact is currently even across countries, a real competitiveness risk could emerge in the near future.
“If Malaysia’s cost structure rises faster, especially in transport and basic materials, we may lose price-sensitive segments to Thailand and Indonesia, which already have strong value propositions.
“Good news, there will be growth in domestic and short-haul travel among locals.
This is consistent during earlier fuel shocks and the pandemic globally.
”He added that policy responses should focus on targeted and structural measures rather than broad subsidies.
“Support should be directed at tourism-critical segments such as transport operators, while efforts to strengthen domestic tourism campaigns like Cuti-Cuti Malaysia should continue.
“The focus must be on resilience, not dependency,” he said.
Mohd Hafiz said policymakers must strike a careful balance between managing fuel costs and sustaining tourism growth.
“Frankly, it’s not a trade-off but it must be policy alignment.
Tourism is a luxury item and we have other necessities.
“Fuel rationalisation is necessary, but if poorly timed, it can suppress travel demand indirectly.
The solution is phased and targeted subsidies, with emphasis on protecting tourism-critical segments.
“Malaysia needs to act fast. Destinations that adapt fastest will capture demand in any scenario, that’s what history tells us.
”Putra Business School Assoc Prof Dr Ida Md Yasin said fuel price shocks would push up inflation, increasing travel costs and weighing on tourism demand through more expensive air fares, road transport and overall holiday spending.
“This would have a knock-on effect on consumer behaviour, with travellers becoming more cautious.
“Higher transport costs could weaken tourism’s multiplier effect, as reduced visitor spending would affect retail, food and beverage, and other related services.
”Ida also stressed the importance of supporting domestic tourism, highlighting that Malaysia’s relatively stable fuel supply and pricing position the sector for a structural adjustment rather than a collapse.
“The tourism sector is likely to adjust rather than contract significantly, with demand gradually shifting towards domestic and regional travel amid rising cost pressures.
”Taylor’s University research cluster lead for innovative management practices Prof Dr Poon Wai Ching said Malaysia’s tourism sector is expected to remain broadly resilient despite disruptions in Middle Eastern oil and gas supply chains.
She said inbound tourism could even increase, particularly from the Middle East and China, as travellers shift towards stable and cost-competitive destinations such as Malaysia.
“At the same time, outbound tourism is likely to decline, especially to destinations affected by higher fuel costs and supply chain disruptions.”
