Malaysia tourism takes hit in wake of MH370 disappearance

Malaysia earns about 20 billion dollars a year from tourism. But in the wake of the disappearance of flight MH370, tourist arrivals -- especially from China -- have taken a hit as Malaysia endures a wave of negative publicity. Some believe the impact may spread to other sectors of the economy too.

This was supposed to be a banner year for Malaysian tourism. The government's Visit Malaysia 2014 campaign aimed to see 28 million tourist arrivals. Go to the campaign's website now and you get a pop up window expressing condolences for the families of those on board MH370. The incident has forced Malaysia to curtail its big tourism drive.

"I have already suspended all road shows in China out of respect for the families." Malaysia Minister Of Tourism Nazri Aziz said.

The minister says about 30,000 bookings from China have been cancelled. Many more may be choosing not to book in the first place.

"Compared with the statistics of last month, when the Spring Festival was just over, the number of tourists to Malaysia decreased by 40 percent." Shen Hongwen, chief product manager of China Youth Travel Service, said.

Last year was a lacklustre year for Malaysian tourism with visitor arrivals only growing three per cent. But the number of visitors from China shot up 15 per cent, making that country the third largest source of tourists here after neighbours Singapore and Indonesia.

The MH370 incident, coupled with the recent kidnapping of a Chinese woman at a coastal resort, have hurt Malaysia's standing in China.

"Frankly speaking, in the short term for time being, there is probably some negative impact on the tourism. However, I do believe for long term, it is going to recover soon." China's Ambassador To Malaysia Huang Huikang said.

Some analysts are also concerned that negative sentiment toward Malaysia could hurt sales of property to Chinese nationals, which had been growing fast. One Chinese-owned developer with major projects in the country's south near Singapore said they didn't rule out a hit to their sales.

But local property analysts believe the impact will be negligible. And the ambassador and tourism minister were at pains to stress that relations between the two countries remain close and cordial.