Malaysia’s tourism outlook clouded by global oil shock
The global energy crisis triggered by the US-Israeli war on Iran is casting a shadow over Malaysia's tourism ambitions
PETALING JAYA, Malaysia (MNTV) – The global energy crisis triggered by the U.S.-Israeli war on Iran is casting a shadow over Malaysia’s tourism ambitions for 2026, with surging jet fuel prices pushing up airfares, constraining flight capacity and raising concerns that foreign arrivals may fall short of last year’s performance.
BIMB Research warned that “Malaysia’s tourism outlook in 2026 is turning more challenging, with foreign arrivals likely to struggle to exceed 25 million” — well below the Visit Malaysia 2026 target of 47 million and down from 26.6 million in 2025.
“Escalating U.S.-Iran tensions pose a key downside risk through higher jet fuel prices, which are feeding into more expensive airfares, tighter flight availability and capacity constraints, especially on long-haul routes,” the firm said, adding that the impact would likely be felt across hotels, retail malls, bottled water producers and other tourism-linked sectors as softer arrivals translate into weaker footfall and spending.
Any upside from regional travel diversion is expected to be limited, the research firm said. However, a stronger ringgit — which had appreciated to RM3.95 against the U.S. dollar by March — should continue to support domestic consumption through better sentiment and more favorable exchange rates.
Malaysia’s primary tourist sources remain Singapore, China and Indonesia.
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