The Economic Transformation Programme (ETP) is a strategic plan by the Malaysian Government to transform the tourism sector into a high-yield industry by 2020. It is vital to understand the perception of international tourists on the Government's initiatives in transforming the industry. Hence, this study aims to explore the international tourists' perception on transformation of the Malaysian tourism industry based on Malaysia's ETP. A practical insight of the characteristics of the Malaysian tourism industry development comparing to the neighbouring countries are provided. Survey data were gathered from a sample of 333 respondents. The findings revealed that affordable luxury, family fun, events, entertainment, spa, and sports, and also business tourism have positive impact on transforming the Malaysian tourism industry into high-yield. Thus, it is concluded that the direction of ETP is in line with the perception of the international tourists. ETP can drive the tourism sector to become a highyield industry.