KUALA LUMPUR (Jan 16): Malaysia’s tourism industry upcycle has started ahead of Visit Malaysia Year 2026, and could bolster share prices of related companies in the next two years, said Maybank Investment Bank (Maybank IB).

History shows that tourist arrivals, total receipts, and receipt per capita start growing in the second half of the years preceding the national campaign, as promotions typically start six- to nine months earlier, the research house said in a note.

For the share prices of tourism related companies to appreciate, however, 2025 and 2026 would have to be free of major mishaps, such as aviation incidents and recession, the house cautioned. Further, company-specific issues have to be positive for the companies, such as lower jet fuel prices, it said.

Malaysia has set aside a record-breaking RM550 million for tourism promotion this year, ahead of Visit Malaysia Year 2026. This year, the government is targeting to welcome 35.6 million tourists, generating more than RM147 billion in receipts for next year.

Part of the initiatives to facilitate the campaign include extending the visa-free access for Chinese and Indian tourists to the end of 2026, and lengthening the duration they are allowed to enter the country to 30 days.

While the tourism targets are ambitious, “we are reasonably confident that there will be growth” from the influx of Chinese and Indian tourists, as well as measures under the Johor-Singapore Special Economic Zone (JS-SEZ), Maybank IB said.

“With Malaysia assuming the Asean chairmanship this year, we gather that more high yielding business travellers from both countries will visit Malaysia this year as well,” the house added.

For exposure to the tourism upcycle, Maybank IB recommends Genting Malaysia Bhd (KL:GENM), Pavilion Real Estate Investment Trust (KL:PAVREIT), and AirAsia X Bhd (KL:AAX). The house also has Genting Bhd (KL:GENT) on a “buy” call, though its exposure to Malaysian tourism is “immaterial”.

Domestic tourism is also growing in importance, as the government encourages Malaysians to tour locally during Visit Malaysia Years to augment the industry, Maybank IB highlighted. In 2023, domestic tourism receipts totalled RM85 billion, exceeding the RM73 billion generated from foreigners.

“Domestic tourism and foreign tourism are not mutually exclusive,” the research house stressed. “The former (domestic tourism) can bolster the latter (foreign tourism), and benefit tourism related companies.”

That could benefit Capital A Bhd (KL:CAPITALA), as foreign visitors travelling to Malaysia via AirAsia accounted for, at most, 20% of total passenger carried in 2019, Maybank IB said.