Malaysia welcomes value over volume as tourist spending surges in retail, dining, healthcare, says BIMB

KUALA LUMPUR (July 21): Malaysia is increasingly attracting higher-quality visitors who spend more on shopping, dining, accommodation and healthcare services, according to BIMB Securities. The research house recorded 10.7 million international arrivals in Malaysia as of May, up 1.1% year-on-year. An increase in visitors from countries like China, India and Indonesia represents a growing trend within the industry, highlighting a healthier and more diversified tourism base. "The key investment takeaway is to focus less on the number of tourists and more on where tourist spending flows," said BIMB in a note. The report also highlighted that the declining share of visitors from Singapore “reduces reliance on a single source market and enhances resilience against country-specific shocks”. BIMB reported that the consumer sector has been one of the indirect beneficiaries of Malaysia's strong post-pandemic tourism recovery, particularly across retail, food and beverage and selected consumer discretionary segments. The house attributed this to “Malaysia's attractiveness as a value-for-money retail destination amid favourable exchange rates”. As rates of international arrivals begin to moderate within the second half of the year, the house urged investors to shift their focus to where tourist spending flows, rather than the number of visitors alone. “Recent trends suggest Malaysia may be attracting a larger share of short-haul travellers with higher daily expenditure, indicating a shift from duration-driven spending towards yield-driven tourism receipts.” High-end retail, healthcare, integrated REITs named beneficiaries Shopping remains the largest tourism expenditure category at 36.1% of total receipts, followed by food and beverages at 15.9%, making retail destinations, consumer businesses and integrated real estate investment trust (REIT) assets among the primary beneficiaries of the Visit Malaysia 2026 campaign. Prime assets such as Suria KLCC, Mid Valley Megamall, The Gardens Mall and Sunway Pyramid are well positioned to capture this spending, said BIMB. Companies offering high-end and luxury retail such as Padini Holdings Bhd (KL: PADINI ) and Poh Kong Holdings Bhd (KL: POHKONG ) are direct beneficiaries of tourist shopping expenditure as concentration in major destination malls leaves the industry well placed to capture tourist spending. A significant driver of this shift is the growing medical tourism industry, which generated RM3.3 billion in revenue in 2025. The country welcomed 1.8 million healthcare travellers, showcasing strong regional demand and Malaysia’s increasingly competitive healthcare proposition. “Unlike conventional tourism, healthcare travel is predominantly need-driven and therefore less sensitive to economic cycles, making it a structurally resilient source of patient volume and earnings growth for private hospitals.” The Malaysia Healthcare Travel Council (under the Ministry of Health) developed the Malaysia Year of Medical Tourism 2026 (MYMT 2026) campaign dedicated to strengthening Malaysia’s branding as a world-class medical and wellness destination. The research house recognised that the MYMT 2026’s significance extends beyond branding as it creates a more integrated ecosystem involving hospitals, airlines, hotels, travel operators and government agencies, which should evolve this sector from a niche tourism segment into a strategic healthcare export industry for Malaysia. A key beneficiary within this sector is IHH Healthcare Bhd (KL: IHH ) as foreign patients make up an increasing percentage of the group's earnings mix, contributing approximately 15% of group revenue in the first quarter of 2026. Meanwhile, KPJ Healthcare Bhd (KL: KPJ ) also stands out as its extensive network allows the group to capture medical tourists beyond traditional hubs such as Penang and Kuala Lumpur. Overall, BIMB reiterated that sustainable earnings growth is likely to be driven not by the number of visitors entering Malaysia, but by the amount they spend once they are here.