US,Israel-Iran war casts shadow over Visit Malaysia Year 2026, but industry shows resilience

Langkawi has been forced into survival mode as a war thousands of kilometres away ripples through Malaysia's tourism sector.

LANGKAWI: When the first wave of cancellations came in early March, Norhayati Abdullah thought it might be temporary. Instead, the small lodge owner in Langkawi has been forced into survival mode as a war thousands of kilometres away ripples through Malaysia’s tourism sector.

Norhayati, who runs Langkawi Country Lodge in Pantai Chenang, said she has recorded 58 cancellations since March 4, just days after US-Israel airstrikes on Iran triggered widespread disruptions to global aviation.

“Most of our European guests usually travel through Middle Eastern hubs to reach Malaysia, especially during the December to March high season,” she told Twentytwo13. “When flights were disrupted, they cancelled.”

While some travellers have found alternative routes via Istanbul or arrived from Asian markets, the uncertainty has weighed heavily on her business. A handful of guests have even extended their stay due to disrupted flight schedules.

But the longer-term outlook worries her more.

“We are concerned that the war may continue until June and beyond. Based on our experience during the Covid-19 pandemic, I decided not to take any chances,” she said, adding that she has scaled down expansion plans for three new guesthouses.

In a difficult move, Norhayati reduced her workforce from 40, including contractors, to just eight. “It is the only way to sustain the business if the situation drags on.”

Her predicament reflects broader anxieties across Langkawi, one of Malaysia’s key tourism destinations under the Visit Malaysia Year 2026 (VMY2026) campaign, which aims to attract 47 million visitors.

According to Eugene Dass, chairman of the Malaysian Association of Hotels (MAH) Kedah/Perlis chapter, member hotels in Langkawi have reported losses ranging from RM100,000 to RM800,000 in March alone.

“We have 37 members in Langkawi, and most cancellations involve travellers from the Middle East and Europe,” he said. “It is a setback after the severe blow we suffered during the Covid-19 lockdowns. We pray the war will end soon.”

The conflict’s impact has been amplified by its effect on aviation networks. Middle Eastern hubs such as Dubai, Doha and Abu Dhabi serve as key transit points for long-haul travellers from Europe, Africa and the Americas heading to Southeast Asia.

Mint Leong, president of the Malaysian Inbound Tourism Association (MITA), said the industry saw an immediate shock, with an estimated 2,800 tour package cancellations within the first week of the conflict, including about 800 from Iran on the first day alone.

Although cancellations have since stabilised, Leong noted that bookings remain tentative. “We are receiving enquiries for the second half of the year, but many are holding back from confirming until the situation improves,” she said recently.

Still, she pointed out that alternative routes, including increased connectivity via China, may help mitigate the impact.

Industry data suggests the turbulence is far from over. As of late March, nearly 2,800 flights were delayed and more than 300 cancelled across major Asian hubs, including Kuala Lumpur, Bangkok, Tokyo, Shanghai and Hong Kong. Kuala Lumpur International Airport alone recorded about 450 delays, affecting airlines across the board.

Despite this, Nigel Wong, president of the Malaysian Association of Tour and Travel Agents (MATTA), struck a cautiously optimistic tone.

“At this stage, we have not observed any significant drop in overseas tourist arrivals to Malaysia. Forward bookings remain generally stable across key markets,” he told a local media outlet recently.

However, he acknowledged that geopolitical uncertainty, rising travel costs, reduced airline capacity and broader economic concerns could influence traveller behaviour, particularly for long-haul trips.

“Regions closer to Malaysia, especially within Southeast Asia, are expected to remain resilient and may help cushion any slowdown from Europe and the Middle East,” Wong added, maintaining that the VMY2026 target remains achievable.

On the ground in Langkawi, the impact extends beyond accommodation providers.

Dr Baharin Baharom, general manager of Langkawi Ferry Line Ventures Sdn Bhd, said ferry operators are grappling with soaring diesel prices, which have more than doubled from RM3.20 to RM7.30 per litre.

Operators have reduced daily trips from five to three since March 25 to contain losses, even as passenger loads remain below capacity.

“We are running at a loss, but we remain committed to serving Langkawi. If diesel prices continue to rise, we may have to cut trips further,” he said, adding that a fuel adjustment mechanism has been proposed to the government.

The reduced ferry frequency has had a knock-on effect on other businesses.

Rosli Ahmad, chairman of the Langkawi Car Rental Operators Association, said domestic visitors, who form the bulk of his sector’s customer base, have declined.

“Travellers are worried about uncertainties, especially whether they can return on time. This may force them to extend their stay and incur additional costs,” he said. “All businesses in Langkawi are affected by this domino effect.”

In response, Kedah Tourism, Heritage and Entrepreneurship executive councillor Datuk Salleh Saidin said he has engaged tourism players in Langkawi, including ferry operators.

“In my view, one of the measures worth considering is increasing the diesel subsidy for ferry operators, alongside exploring appropriate forms of assistance, at least until the geopolitical crisis in the Middle East, which is driving cost pressures, subsides,” he said when contacted.

“I am confident that the Federal Government, particularly the Transport Ministry, does not take this matter lightly and is in the process of formulating the necessary measures.”

He said that for Langkawi, ferries are not merely part of the tourism offering; they are a form of public transport, a lifeline that connects the daily lives of island residents with the mainland.

“At a time when the world is facing various uncertainties, the domestic tourism sector holds significant potential for growth. Therefore, ensuring that access to Langkawi remains smooth and convenient is of utmost importance,” added the Kubang Rotan assemblyman.

Amid these challenges, the government has acknowledged the risks posed by the conflict to Malaysia’s tourism ambitions.

Tourism Minister Datuk Seri Tiong King Sing said several weeks ago that while the war has created headwinds, Malaysia’s diversified tourism markets provide a buffer against external shocks, adding that the situation remains manageable for now.

At the same time, he urged industry players to remain agile, diversify source markets and leverage emerging opportunities as global travel patterns shift.

Back in Langkawi, Norhayati is doing just that, adapting day by day while hoping for calmer skies.

“We’ve been through Covid-19. We know how bad things can get,” she said.

“This time, we just hope it doesn’t last as long.”