Malaysia dropped one spot from 2015 to be placed 26th among 136 countries, although it improved on its overall performance from various indicators by rising from 4.41 points in 2015 to 4.50 in 2017.
Malaysia is ranked higher than Thailand in the Travel and Tourism Competitiveness Index 2017 by the World Economic Forum (WEF).
According to the report released on April 5, Singapore topped the table among the nine nations in South-East Asia with Malaysia second, followed by Thailand and Indonesia.
Globally, Malaysia dropped one spot from 2015 to be placed 26th among 136 countries, although it improved on its overall performance from various indicators by rising from 4.41 points in 2015 to 4.50 in 2017.
The report which is released every two years, said Malaysia's strong performance was attributed to its price competitiveness, strong air connectivity, and beautiful natural resources.
The WEF report engages leaders in the travel and tourism industry to carry out an in-depth analysis of its industries' competitiveness of 136 economies that account for over 98 per cent of the world's GDP.
The index measures a set of "factors and policies that enable the sustainable development of the travel and tourism sector", which includes international openness, prioritisation of travel and tourism, human resources and labour market, health and hygiene, and safety and security.
The report also said that Malaysia could become more competitive by further prioritising the travel and tourism industry via investing in the development of its cultural resources and business travel.
It added that Malaysia should address environmental sustainability and preserve its beautiful natural environment.
There were more than 25 million tourist arrivals into the country last year, contributing almost RM80bill in inbound receipts, according to the report.
Spain which had a score of 5.43 tops the rankings for the second time due to its unique offering of both cultural and natural resources.
It is followed by France, Germany, Japan and United Kingdom.
The WEF is a Swiss non-profit foundation that engages the foremost political, business and other leaders of society to shape global, regional and industry agendas.