Visa-free entry for Chinese and Indian travellers expected to boost visitor arrivals

• According to Malaysia Tourism data, Malaysia welcomed about 20.1 million international visitors in FY2023, or approximately 77% of visitor arrivals compared to 2019.
• Effective 1 December 2023, Chinese and Indian travellers can enjoy visa-free entry to Malaysia for up to 30 days. In a recent announcement by the Malaysia government, the visa-free period was extended until end-2025 for Chinese travellers.

Supply growth in 2024 expected to accelerate

• As of YTD June 2024, four hotels, representing 1,109 keys, had opened in Kuala Lumpur. Supply expanded by 2.3% as a result.
• For the remainder of the year, 2,787 keys from eight hotels are expected to enter the market. Assuming that all projects materialise, supply is expected to grow by 7.9% in 2024.

YTD trading performance exceeds 2019

• As of YTD June 2024, Kuala Lumpur hotels have registered a significant improvement average revenue per available room (RevPAR), as occupancy rose in tandem with higher tourist demand and ADR remained elevated.
• Hotel capital market in Malaysia was quiet in the second quarter as no major transaction completed.

Outlook: Significant investment makes for improved air connectivity

• The Malaysia Airports Group has made intensive efforts to enhance the country’s network connectivity, resulting in KL International Airport (KLIA) now serving 70 airlines, exceeding the pre-pandemic level of 69 airlines.
• The Malaysian Aviation Commission has predicted 2024 passenger growth to be between 10%–25% higher than 2023. Airlines’ filled seat capacity for 2024 showed a 13% increase over 2023, boosted by visa-free entry for Chinese and Indian passengers.