Middle East crisis may hit Visit Malaysia Year 2026 targets

2026-03-16 - 12:04

Since US-Israel strikes on Iran began on Feb 28, more than 37,000 flights to and from the Middle East have been cancelled. (EPA Images pic) PETALING JAYA: The government’s Visit Malaysia Year 2026 (VMY26) campaign may take a hit from the escalating geopolitical tensions in the Middle East and a shift in global sentiment, said TA Research. The campaign’s ambitious target to attract 47 million international arrivals and RM329 billion in tourism receipts may be impacted by headwinds from rising geopolitical tensions in the region, the research house said in a note today. “The escalation of geopolitical tensions in the Middle East comes at a pivotal moment for Malaysia, coinciding with the launch of Visit Malaysia Year 2026. The campaign now faces mounting headwinds that could challenge its momentum,” it said. While VMY26 aims to position tourism as an economic stabiliser, risks such as geopolitical volatility, softer global sentiment, and inflationary pressures could constrain growth, particularly from long-haul and high-value markets, it added. TA pointed out that while Middle Eastern visitors account for only about 0.4% of total arrivals, or approximately 162,000 visitors, disruptions in the region’s airspace and transit hubs could indirectly reduce arrivals from Europe and other long-haul markets. “The potential shortfall of two to three million visitors is therefore not due to the Middle East alone, but rather from indirect spillovers. “Middle Eastern hubs serve as key transit points for European and other long-haul travellers, and disruptions or higher travel costs reduce arrivals from these high-spending markets,” it noted. For comparison, it said during the Iraq War in 2003, Malaysia recorded a noticeable decline in tourist arrivals, falling to about 10.5 million visitors in 2003 from to 13.2 million in 2002 — a drop compounded by the SARS outbreak — resulting in a 17.4% loss in tourism receipts. For Malaysia and the broader Asean region, the implications are tangible – reduced seat capacity, extended rerouting times, and upward pressure on airfares, it said. “Furthermore, travel advisories against non-essential travel to seven Middle Eastern countries — Iran, Iraq, Jordan, Kuwait, Qatar, Bahrain and the United Arab Emirates — have heightened uncertainty,” it added. Nevertheless, TA said strong regional demand from Asia — particularly Singapore, Thailand, Indonesia, China, and India — is expected to provide a stabilising buffer, while domestic tourism continues to underpin overall performance. Since the US-Israel strikes on Iran began on Feb 28, more than 37,000 flights to and from the Middle East have been cancelled, removing roughly 4.4 million seats from the market and stranding hundreds of thousands of passengers across the Gulf. The three hardest-hit hubs — Dubai, Doha, and Abu Dhabi — together handle about 90,000 transiting passengers per day and connect Europe to Asia, Australia, and Africa. With the strategic Strait of Hormuz closed by Iran, jet fuel prices have soared since the start of the conflict, resulting in huge increases in ticket prices, especially for international flights.