Malaysia’s Tourism Hit by Fuel Shock?

 

Malaysia’s tourism sector is bracing for a sharp jump in travel costs, with tour package prices expected to climb as much as 50 per cent. Surging fuel prices impact transport and operating expenses. Malaysian Inbound Tourism Association (MITA) president Mint Leong said the increase comes as the Middle East conflict disrupts travel flows and drives up global energy prices, compounding pressure on an industry already facing cancellations and weaker demand. If the situation (in West Asia) persists, tour package prices could rise by 30 to 50 per cent. 

Tourism sector felt the impact from early March, almost as soon as the Iran war broke out.  An estimated 2,800 tour packages were cancelled in the first week of the conflict.  Beyond cancellations, the sharp rise in diesel prices is emerging as a key pressure point, given that transport operators rely heavily on diesel, and so are facing surging operating costs.

 

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Renting a tour bus previously cost between RM1,040 (S$333.70) and RM1,205 a day when diesel cost RM3.04 a litre. The cost has now risen to between RM1,900 and RM2,200 – a nearly 83 per cent increase, with Malaysia’s diesel prices now at RM5.52 a litre. The spike is squeezing margins across the tourism value chain, from transport providers to hotels and F&B operators. Because tour packages are typically contracted months in advance at fixed prices, operators are unable to pass on the higher costs. Tourist buses, vans and ferries have been excluded from the national diesel subsidy since 2024, leaving those operators particularly exposed to price volatility. 

In the meantime, operators are exploring alternative strategies to mitigate disruptions, including rerouting travellers through China and tapping into regional demand. In 2025, Malaysia welcomed 42.2 million visitors, 11.2 per cent more than the year before. Tourism receipts came in at RM110.6 billion.  Building on this momentum, the country hopes to clock 47 million foreign arrivals and a record RM147.1 billion in receipts for the Visit Malaysia 2026 campaign. Industry groups say the combined impact of rising costs and falling demand is beginning to strain cash flow. 

Malaysia’s tourism sector relies heavily on advance bookings from long-haul travellers, particularly from Europe, North America and the Middle East, said Wong. However, geopolitical tensions and higher airfares have led to postponements, leaving gaps in expected revenue. The crisis is also exposing longer-term structural challenges within the industry.

Tourism operators affected, hotels will be impacted, restaurants will have less customers and all-related enterprise will go down. Has there been an urgency to address issues for tourism and the many other sectors? I don’t see it yet! The MOF and the Economy Ministry need to draw-up a “survival” plan soon! 

Reference:

Malaysia tourism hit by fuel shock; tour prices may jump 50%,  Tan Ai Leng, The Business Times, 30 March 2026