KUALA LUMPUR (Dec 8): Malaysia is likely to welcome more tourists this year than its population of 35 million, with the tourism boom potentially bigger next year, according to HSBC Global Research.

Tourist arrivals will be supported by stronger Chinese tourist arrivals, improving flight connectivity and the government’s ambitious “Visit Malaysia 2026” campaign, the research house said in its Malaysia, Truly Asia economics report dated Dec 8. 

"Malaysia is on track to easily exceed its 2025 tourism target of 31.4 million tourists, making it one of the few Asean economies to achieve its target," the report said. "We estimate the number of tourists is likely to exceed 40 million".

HSBC noted that Malaysia had welcomed over 28 million tourists as of August 2025, a 15% year-on-year increase, and had overtaken Thailand as the most popular tourism destination in the first eight months of the year. Tourism receipts had also already exceeded the 5% of GDP figure recorded in 2024, it noted.

"There is a noticeable increase of tourists this year visiting Malaysia’s historic sites in Penang and Melaka, discovering the natural beauty of Langkawi and East Malaysia, or taking a foodie tour to find the best Nasi Lemak and Char Kway Teow in mamak stalls," it said.

The bank noted that a third of Malaysia's visitors are day-trippers — mainly from Singapore, Thailand and Brunei — who usually cross land borders for the sake of groceries, shopping, services and food. This trend, the bank said, reflects a similar pattern of Hongkonger weekend shoppers going to Shenzhen.

The report also pointed to infrastructure improvements that will boost near-term and long-term prospects, including the Rapid Transit System (RTS) linking Johor and Singapore, slated to be operational by December 2026 and expected to “carry up to 10,000 passengers per hour in each direction”.

HSBC added that the number of mainland Chinese tourists is now 20% higher than in 2019, supported by the visa-free scheme, improved safety perceptions and stronger flight connectivity, with Malaysia’s direct flights to China currently 50% above 2019 levels and “well ahead of its regional peers”.

While Chinese visitors accounted for about 13% of Malaysia’s tourism portfolio in 2024, the travellers from that country that is roughly 3,512km (2,182 miles) away from Malaysia has contributed 20% of tourism receipts, indicating a higher per-capita spending, the bank noted.

Beyond 2025, HSBC said the positive momentum will be continued by the launch of the “Visit Malaysia 2026” campaign, which is being heavily promoted at the Kuala Lumpur International Airport and Shenzhen’s bullet train station.

The government is targeting a record 47 million tourists next year, supported by an allocation of over RM700 million in Budget 2026 for marketing, facility upgrades and tax incentives for tourism operators.

HSBC also noted the rise of “durian tours”, which have strong appeal among Chinese visitors, and the growth of “concert economics”, with Malaysia on track to host 450 concerts this year, injecting RM1.7 billion into the economy.

"If you haven’t already made travel plans for the holidays, perhaps it’s time to think about packing your bags for Malaysia?" the bank concluded.