Reimagining Hospitality: A Digital and Sustainable Pathway for Visit Malaysia Year 2026

As Malaysia prepares for Visit Malaysia Year (VMY) 2026, the nation is poised to mark a major milestone in its tourism industry. With an ambitious target of attracting 47 million tourists and achieving RM147.1 billion in tourism receipts, VMY 2026 signals Malaysia’s determination to elevate itself as a premier global destination.
For the hospitality sector, particularly hotels, this presents a pivotal opportunity not just to tap into tourist demand, but also to accelerate digitalisation and sustainability — two powerful forces reshaping the structure of the global tourism landscape.

Malaysia’s tourism industry is experiencing strong momentum, with tourist arrivals jumping over 20% from January to May 2025. This increase is driven by effective government strategies, including the Visa Liberalisation Plan and technology-enabled and airline-led promotional campaigns. The country recorded 16.9 million international tourist arrivals during this period, a significant increase from the 14.1 million arrivals in the same period the previous year.

Travellers today seek experiences that go far beyond traditional comfort — they expect personalisation, seamless technology integration, and strong environmental responsibility. A World Economic Forum survey shows 86% of travellers aged 25–34 prefer sustainable travel options. Meanwhile, AI, big data, and smart systems are rapidly redefining how hotels operate, compete and connect with guests.

In 2024, Malaysia ranked behind Singapore and Thailand in the World Economic Forum’s Travel & Tourism Development Index (TTDI), especially in categories like sustainability, digital readiness, and environmental health. To move up in global competitiveness, Malaysia’s hospitality sector must advance decisively – not gradually – in both digital transformation and green innovation.

Digitalisation is transforming every touchpoint of the guest journey. From AI-powered chatbots managing reservations to predictive analytics anticipating guest preferences, technology is no longer optional—it is essential. Hotels that embrace digitalisation unlock multiple competitive advantages, including:

• Personalised guest experiences – Tailored room settings, dining recommendations, and curated itineraries based on past behaviour.
• Operational efficiency – Automation in booking, check-in/check-out, and resource management reduces manual workload and enables staff to focus on higher-value services.
• Data-driven insights – Analytics improve forecasting, accuracy, strengthen revenue optimisation, and deepen customer engagement.

In short, digitalisation enables hotels to deliver seamless, memorable experiences while optimising costs and strengthening competitiveness.

Alongside digitalisation, sustainability has emerged as a defining trend in tourism. Guests increasingly make booking decisions based on a hotel’s environmental commitments. Sustainable investments yield long-term benefits for both the environment and the bottom line, through:

• Energy and Water Conservation: Investing in renewable energy sources like solar panels and water-saving technologies can significantly lower utility costs over time.
• Waste Management: Composting food waste, recycling, and reducing single-use plastics can lower disposal costs and create new revenue streams.
• Enhancing Brand Reputation and Market Reach Attracting Eco-Conscious Travellers: A growing number of tourists actively seek out sustainable accommodations and experiences. By demonstrating a commitment to the environment, tourism businesses can attract this high-value and increasingly discerning market segment.
• Protecting Natural Assets: For destinations reliant on natural beauty, protecting ecosystems ensures long-term viability, such as a diving resort investing in coral reef restoration to sustain both the environment and its appeal.

The Malaysian Association of Hotels (MAH), in partnership with other organisations, has launched a new ESG Certification for hotels and resorts. This initiative provides a measurable checklist for properties to align with Malaysia’s 2030 vision for sustainable tourism.

Malaysia’s forward-looking New Investment Policy centres around ESG, in line with the nation’s commitment to carbon-neutrality by 2050 at the earliest. The Government has also strengthened its renewable energy agenda, targeting a 70% share of renewable energy in the electricity generation capacity mix by 2050. 

The tourism sector in Malaysia is already drawing strong investor interest. Between January and June 2025, approved hotel and tourism projects totalled RM736.5 million across 15 projects, creating 1,354 potential jobs —representing a 31% increase from RM560.2 million recorded in the same period of the previous year. These figures underscore investor confidence and the sector’s growth potential ahead of VMY 2026.

To support this momentum, the Government offers a wide range of incentives for hospitality players, including:

• Pioneer Status (PS) or Investment Tax Allowance (ITA) to encourage new 1-3-star hotel projects and expansion / modernisation / refurbishment projects in hospitality.
• Automation Capital Allowance to support adoption of Industry 4.0 technologies and automation.
• Green Technology Tax Incentives, expanded to cover projects such as renewable energy and electric vehicle charging infrastructure.
• Domestic Investment Accelerator Fund (DIAF) to support Malaysian-owned Small and Medium Enterprises (SMEs) and Mid-Tier Companies for ESG adoption.   

These measures ensure that investments in digitalisation and sustainability are not just visionary but also financially viable.

VMY 2026 is more than a campaign; it is a strategic platform to redefine Malaysia’s hospitality sector for the next decade. By embracing digitalisation and sustainability, hotels will position themselves as leaders in innovation while delivering the kind of experiences that modern travellers expect. Beyond immediate gains, these investments will enhance resilience, reduce long-term operating costs, and strengthen Malaysia’s reputation as a world-class, future-ready destination. 

As Chairman for ASEAN, Malaysia’s recent hosting of World Tourism Day 2025 and the 7th World Tourism Conference in Melaka, themed “Tourism and Sustainable Transformation”, underscored the nation’s commitment to ESG-driven growth. The selection of Melaka, a UNESCO World Heritage Site, highlights Malaysia’s unique blend of history, culture, and innovation, making it an ideal location to champion sustainable tourism practices.

The future of tourism is being shaped today. Hotels that act decisively to adopt digital and green solutions will not only capture the wave of demand in 2026 but will also future-proof their businesses in the face of evolving global trends.

Visit Malaysia Year 2026 offers the hotel industry a golden opportunity to showcase Malaysia’s readiness for the future of hospitality. The time to act is now because the hotels that move boldly today will shape the future of Malaysia’s tourism tomorrow.

To learn more, please reach out to the Healthcare, Education & Hospitality Division at https://www.mida.gov.my/staffdirectory/healthcare-education-hospitality-division/

[1] https://www.reuters.com/world/asia-pacific/malaysias-tourist-arrivals-up-20-jan-may-ministry-says-2025-07-22/

[2] https://www.reuters.com/world/asia-pacific/malaysias-tourist-arrivals-up-20-jan-may-ministry-says-2025-07-22/

[3] https://www.nst.com.my/news/nation/2025/07/1248380/malaysias-foreign-tourist-arrivals-204pct-jan-may-year#:~:text=2026%20BudgetMACC-6,Malaysia’s%20foreign%20tourist%20arrivals%20up%2020.4pct%20from%20Jan%20to,the%20same%20period%20last%20year.

[4] https://reports.weforum.org/docs/WEF_Future_of_Travel_and_Tourism_2025.pdf

[5] https://www3.weforum.org/docs/WEF_Travel_and_Tourism_Development_Index_2024.pdf

[6] https://www.hotels.org.my/press/35717-mah-and-partners-launched-new-esg-certification-for-hotels-and-resorts

[7] https://ekonomi.gov.my/sites/default/files/2023-08/National%20Energy%20Transition%20Roadmap.pdf

[8] https://www.mida.gov.my/why-malaysia/investment-statistics/