Malaysia’s tourism expected to improve in the second half of the year following stable YTD visitation figures

• Tourism slowed in the first five months of the year due to disruptions to air travel caused by the ongoing conflict in the Middle East. As of YTD May 2026, Malaysia recorded 10.6 million visitor arrivals, representing 1.1% year-on-year growth.
• In terms of source markets, while Singapore remains the top contributor of tourist arrivals, Mainland China recorded the highest y-o-y growth, at 21.4% as of May 2026.

Incoming new supply over the next three years is dominated by luxury openings

• The market is projected to see an addition of 1,384 new rooms in 2026, with all new openings expected to take place in the latter half of the year.
• The new hotel supply is concentrated in the luxury segment (60%) and is set to uplift Kuala Lumpur’s hospitality sector by pushing up average daily rates and raising the industry-wide price ceiling.

Following several years of exceptional occupancy and ADR growth, the Kuala Lumpur hotel market is maturing towards a more sustainable growth trajectory

• Despite a challenging and volatile global climate, the market demonstrated healthy resilience and growth, alongside a healthy volume of luxury supply.
• The Kuala Lumpur luxury hotel segment’s RevPAR increased by 2.6% in the first half of the year. This was driven by a 2.9 percentage point increase in occupancy, partially offset by a 1.6% decline in ADR.

Outlook: Kuala Lumpur’s MICE sector is poised for growth in 2026, with the Visit Malaysia Year 2026 campaign supporting the development of strategic growth areas

• In 2026, Malaysia’s MICE sector is poised for a landmark year, with a robust calendar of events set to drive significant high-yield tourism. The schedule is anchored by large-scale international trade shows, providing revenue opportunities for hotel operators.
• The outlook for the Malaysian hospitality market remains positive, with strong demand fundamentals underpinning projected growth in occupancy levels. This optimism is fuelled by strategic initiatives such as the ‘Visit Malaysia 2026’ campaign and a significantly enhanced calendar of MICE events planned for the year.