Disappearance of flight MH370 ricocheted economic and diplomatic damages in the Malaysian tourism sectorPress release July 18, 2014 Malaysia tourism industry, tourism industry malaysia, malaysia travel industry
This report provides an extensive analysis related to the tourism demands and flows in Malaysia. It details historical values for the Malaysian tourism sector.
The travel and tourism sector in Malaysia is the sixth largest contributor to its economy. Having performed significantly well during 2009-2013, it was the tragedy of flight MH370 that has had far reaching implications on Malaysian tourism as a whole. The Malaysian tourism industry had taken a significant battering for the Malaysian Airlines flight saga despite the government’s effort to promote the country as a tourism hub for both leisure and business travelers.
This report: Travel and Tourism in Malaysia to 2018 highlights the high investment in the sector, extensive tourism promotions and infrastructure development in related markets that have been notably affected the domestic and international tourist volumes. Well known for its duty-free shopping, the tourist spend in the country was recorded at USD 6 billion in 2012 and USD 6.3 billion in 2013.
Impact of MH 370 flight’s disappearance
The disappearance of the flight MH370 along with the events that followed including the futile search attempts, remains one of the biggest PR disasters for Malaysia with far-reaching effects on the tourism sector, going to the extent of the country appearing callous in the face of human suffering. While many have defended the way Malaysia handled the crisis stating that the country was faced with an unprecedented set of circumstances, for the world at large, the perception about the country changed significantly.
Comparison of rates from more than 200 hotel booking sites has revealed that the tourism industry in Malaysia has been suffering the far-reaching effects of the mishap. Australians for instance, have already began rejecting Malaysia as a potential holiday destination, though in 2013, the country welcomed close to 500,000 Australian tourists alone, ranking it as the ninth popular destination globally. However, after the plane’s disappearance, searches for accommodations from this region dropped by a quarter. Chinese were found to have an even stronger aversion towards the location, with more than 30% cancellations, costing the country more than USD 31.3 million in just six weeks post the incident. Even key tourism events like the Malaysian Grand Prix, did not seem to help much in the country’s objective to increase its overall influx of tourists from 25.7 million to 28 million this year.
Domino effects of the tragedy
The Malaysian travel industry as a whole has been on the receiving end of this debacle, though it is the national carrier, Malaysian Airlines which faced the worst, with its shares having declined by as much as 10% since March 8th, the day of the disappearance. Market experts fear that with this disaster, both the country and the airlines are about to see inestimable damages especially to the tourism sector, which is the key bread-earner of the economy. Market experts however believe that travelers will overcome this fear in time, until which the country and its tourism sector need aggressive efforts to rebuild trust and reputation.
The long-term consequence of the tragedy is yet to be felt, as flight circumstances remain shrouded in mystery. Despite this, the total number of inbound tourist arrivals is expected to reach 29.8 million by 2018 recording a CAGR of 3% because of recent government efforts and increased aviation safety.
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Malaysia tourism industry, tourism industry malaysia, malaysia travel industry