KUALA LUMPUR, March 30 — Some Malaysian travel agents were immediately impacted by the Iran war with an estimated 2,800 cancellations of tour packages in the first week itself.

Malaysian Inbound Tourism Association (MITA) president Mint Leong said 800 of these cancellations were from Iran on the very first day of the conflict, while an estimated 2,000 were from other regions in the first few days.

“When the war started, we straightaway received cancellations from tourists from Iran — immediate drop by about 800 tourists from Iran,” she told Malay Mail, noting that this is usually the peak period for Iranian tourists visiting Malaysia.

Leong said the conflict had resulted in flight cancellations at airports in the Middle East such as Dubai, Abu Dhabi, Doha and Muscat in Oman; pointing out that these are transit hubs for passengers flying to Asia from Europe, the Americas, Africa and Russia.

“So due to the war, we not only lose tourists from Iran, Middle East, we actually lose tourists from all over the world,” she said.

MITA has about 1,000 active members with about 70 per cent being travel agents, with 30 of these travel agencies taking the biggest hit as they focus on tourists from Iran and the Middle East.

“They need to explore new markets for them to survive, because they don’t know when they are going to come back,” she said, referring to these particular agencies.

She said travel agents cannot rely on Malaysians to make up for the loss in business from overseas tourists, as local travellers tend to travel independently and only use tour agencies for trips such as those sponsored by companies.

Enquiries coming in but future travel to Malaysia still on hold

Leong said MITA members have not received more cancellations after the initial impact, but noted tourists are currently only making new enquiries and not snapping up travel packages.

“Those who already planned their trip and wanted to come to Malaysia in March and April, those have already cancelled. Now, we already started to get enquiries for the second half of the year, but this is only stuck at enquiry, so they are still monitoring the situation — whether the war will end or not,” she said.

The week after Hari Raya Aidilfitri is usually the peak season in Malaysia for Middle East tourists, but Leong said enquiries from such tourists has been “quite slow compared with the past year”.

“Some of our agents are getting enquiries for June, July, and August which is summer holidays, also from the Middle East, but all only stopped at enquiry only, there is no confirmation,” she said, indicating reasons such as concerns over flights, safety and the ongoing war.

Leong said tourists from Europe and Russia can bypass the Middle East, by using alternative transit hubs such as China to fly into Malaysia.

“Because for the past few years, our minister has been helping the industry open up the routes from China. Nowadays we have more than 400 flights direct from China to Malaysia, for many cities in China,” she said.

Cost challenges for tourists and tour operators

With airlines imposing higher fuel surcharges and airfares amid rising fuel prices, tourists coming into Malaysia may have lower spending power and may spend less.

For example, a visitor may opt for a four-star or three-star hotel instead of a five-star one after paying for more expensive flight tickets, she said.

She said this might affect Malaysia’s Visit Malaysia Year (VMY) 2026 targets of 47 million international visitors and RM329 billion in tourism revenue.

Lower tourist numbers would also affect the remaining 30 per cent of MITA’s members, who operate tourism-related businesses such as restaurants, homestays, retail outlets, event companies, transportation, and attractions.

With the rise in diesel prices since the Middle East conflict began, Leong said MITA is mulling a 30 per cent hike in transport charges for tourists, as tour buses and vans use diesel.

She said MITA may also urge the government to give diesel subsidies to tour operators with vans and buses.

The weekly retail price for diesel has increased in Peninsular Malaysia from RM3.04 per litre before the Iran war (February 26 to March 4) to RM3.12 (March 5 to March 11), and to RM3.92 (March 12 to March 18) and RM4.72 (March 19 to March 25) and now to RM5.52 (March 26 to April 1). It remains capped at RM2.15 per litre in Sabah and Sarawak.

Malaysia’s international visitors’ arrivals to be cushioned by Asean, China, India 

Malaysian Association of Tour and Travel Agents (MATTA) president Nigel Wong, however, said there continues to be stable bookings for upcoming travel.

“At this stage, MATTA has not observed any significant drop in overseas tourist arrivals to Malaysia.

“There have been no widespread reports of cancellations or refund trends affecting inbound travel to Malaysia, and forward bookings remain generally stable across key markets,” he told Malay Mail.

Wong listed factors that may affect the number of international visitors to Malaysia in the current global environment, including:

• Geopolitical uncertainties and ongoing conflicts;
• Rising travel costs, including airfares and surcharges;
• Reduced airline capacity and limited flight connectivity; and
• Broader global economic uncertainty affecting consumer confidence.

“These factors may impact travellers’ decision-making, especially for long-haul travel, where costs and perceived risks are typically higher.

While noting that there could be fewer tourists from the Middle East and Europe in the near future, he said regions nearby such as South-east Asia could help boost tourist numbers.

Wong said the VMY 2026 target of 47 million visitors “remains achievable” at this point, having noted that regional markets are “expected to remain resilient and may help cushion any slowdown” from Middle East and Europe.

“Malaysia is in a favourable position both geographically and geopolitically, and continues to benefit from strong regional connectivity,” he said when explaining why the VMY target is still viable.

“Asean remains a key source market, while China is showing steady recovery with increasing flight capacity. India is also emerging as a high-potential market, contributing positively in terms of visitor numbers and spending,” he added.

With MATTA having more than 2,300 active members now, Wong said these members do not only offer services for inbound tourism or overseas tourists coming into Malaysia, but offer a broad variety of services including for travel out of Malaysia.

“While some specialise in inbound tourism, many are also involved in outbound travel, ticketing, and other related services. This diversification enables the industry to remain resilient and adapt to shifts in travel demand,” he said.

Impossible to predict long-term impact 

Aviation analyst Brendan Sobie said “it is inevitable there will be a drop in tourists flying into Malaysia”, especially from non-Asian regions such as the Middle East and Europe.

“Malaysia is heavily dependent on the Gulf hubs as Kuala Lumpur has limited long-haul flights compared to other hubs such as Bangkok and Singapore,” the founder of aviation consultancy firm Sobie Aviation told Malay Mail.

“For example Kuala Lumpur has only about eight daily flights to Europe but had about 17 to the Middle East before this crisis, including about 10 to the main hubs in the UAE or Qatar.

“In comparison, Singapore has about 28 daily flights to Europe but only about 11 to the Middle East, including nine to the main hubs in the UAE or Qatar,” he said.

While tourist demand from other regions may be able to help make up for the shortfall in tourist arrivals in Malaysia from those regions “to some extent”, he said “it’s not possible to entirely fill this void”.

“It’s impossible to predict the impact beyond the short-term. No one knows how long this disruption will last or how quickly the Gulf hubs will be able to recover. We don’t know yet if there will be long term implications or the extent of the impact beyond one month,” he said.