by Theleaders | June 26, 2026 1:40 pm
KUALA LUMPUR, June 26 — Malaysia’s tourism slowdown is expected to reverse in the second half of 2026, with international visitor arrivals forecast to surpass pre-pandemic levels by year-end despite a mid-year dip blamed largely on disruptions caused by the Middle East conflict, according to BMI, a unit of Fitch Solutions.
In a report released yesterday, BMI forecast Malaysia would receive 27.97 million international tourist arrivals this year, representing a 5.1 per cent increase from 2025 and 7.2 per cent above the 2019 pre-pandemic benchmark.
The upbeat outlook comes even as May arrivals slipped 3.3 per cent year-on-year to 2.6 million visitors, marking the third monthly decline of 2026. Year-to-date arrivals reached 10.6 million, up 1.1 per cent from the same period last year.
“Based on the first five months of arrivals data, we believe the slowdown is cyclical rather than structural,” BMI said.
The research house attributed the softer performance to weaker arrivals from the Middle East and Europe after conflict in the region disrupted air travel, pushing up fares and affecting long-haul demand.
“We see this weakness as the product of temporary factors, chiefly the Middle East conflict, elevated airfares and disrupted flight routes, rather than any lasting erosion of Malaysia’s appeal as a destination,” the report said.
BMI noted that although visitors from the Middle East account for only around 0.4 per cent of Malaysia’s total arrivals, the conflict had a much wider knock-on effect after more than 37,000 flights to and from the region were cancelled and jet fuel prices climbed sharply.
The disruption also affected major Gulf transit hubs such as Dubai, Doha and Abu Dhabi, weighing on European and other long-haul markets that rely on those connections.
The weakness, however, was partly offset by continued strength from Mainland China.
BMI said arrivals from China rose 21 per cent year-on-year in the first five months of 2026 to 1.87 million visitors, supported by Malaysia’s visa-free policy for Chinese nationals, which has been extended until December 31, and improved air connectivity under the Visit Malaysia 2026 campaign.
It said sustained growth from China, together with government efforts to boost tourism, meant “the structural recovery remains intact even as near-term momentum has eased.”
Looking ahead, BMI expects arrivals to rebound over the June-August period before reaching another seasonal peak in December.
“Given the first five months of data, we forecast that arrivals will regain momentum over the remainder of 2026, with a pronounced pick-up across the June-August period and a further seasonal peak in December,” it said.
“On this profile, we forecast that full-year arrivals will reach 27.97mn, an increase of 5.1 per cent y-o-y and 7.2 per cent above the 2019 pre-pandemic benchmark, confirming that the softening through Q2 2026 represented a pause rather than a reversal.”
BMI said the recovery would depend on airfares and flight schedules returning to normal as Middle East-related disruptions ease, alongside continued demand from China.
It warned that renewed escalation of the regional conflict or a sharper-than-expected slowdown in European travel remained the biggest risks to its forecast.
Source URL: https://theleaders-online.com/report-malaysia-tourism-to-rebound-h2-2026-from-middle-east-conflict-disruption-arrivals-set-to-top-pre-pandemic-levels/
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