Inbound tourists to bring growth along for the ride

PETALING JAYA: Visit Malaysia 2026 (VM26) is expected to be a catalyst for sustainable economic growth as it aims to attract 47 million visitors and generate RM329bil in tourism receipts, analysts say.

MBSB Research said that the tourism sector upcycle will support job creation, lift local communities and position Malaysia as a destination for diverse and high-value experiences.

Last year, the local tourism industry was a key economic driver, contributing 15.1% to gross domestic product and generating RM102.2bil in receipts.

Inbound tourism expenditure contributed 52.1% of internal tourism consumption last year (2023: 49.1%), following five years in which domestic spending held the larger share, the research house said.

Tourist arrivals surged by 24.2% to 25 million last year with China’s tourists accounting for 11% of the figure, behind tourists from Indonesia at 14.9% and Singapore at 40%.

MBSB Research noted tourism receipts in Malaysia are primarily driven by shopping (36% of receipts) and accommodation (18.8% of receipts).

As such, the research house said it expects the transportation, hospitality, healthcare, and consumer sectors to materially benefit from the expected increase in tourist arrivals to Malaysia, with higher average occupancy rates, surge in medical travellers, and higher sales across fast moving consumer goods and discretionary retail.

“Corporate earnings will also be sustained by domestic drivers amid external uncertainty. The consensus expects annual earnings growth of the FBM KLCI at 6.4% next year,” the research house said in a report on VM26.

In terms of stock picks,MBSB Research said it believes Capital A Bhd and AirAsia X Bhd have much to gain from VMY26.

It noted Capital A is progressively reactivating its fleet of 220 aircraft with full reactivation targeted by end of this year.

“Capital A’s digital ecosystem, anchored by the Move app and BigPay payments platform, is expected to capitalise on cross-selling opportunities, dynamic pricing and customer engagement as travel volumes peak,” the research house stated.

AirAsia X is also positioning for growth and its plans to acquire new aircraft to extend its operational range with deliveries scheduled for the second half of next year.

Bus service operators like HI Mobility Bhd are another potential beneficiary from higher tourist numbers, it added.

Tourists spending will benefit companies like Fraser & Neave Holdings Bhd, QL Resources Bhd, Spritzer Bhd, Life Water Bhd, Padini Holdings Bhd, as well as mall operators like Aeon Co (M) Bhd and real estate investment trusts (REITs) like Pavilion-REIT, Sunway-REIT and KLCC Stapled Group.

Hotel operators like YTL Hospitality-REIT and Shangri-La Hotels (M) Bhd stand to gain from higher bookings from business and leisure travellers.

In the healthcare space, MBSB Research expects Malaysia Year of Medical Tourism 2026 to benefit operators like IHH Healthcare Bhd and KPJ Healthcare Bhd.