An unprecedented second major aviation disaster in four months could further associate Malaysia with calamity in the eyes of travellers, putting the tropical destination's vital tourism sector at risk, observers warn.
A Tourism Malaysia advertisement promoting Kuala Lumpur is displayed behind commuters sitting at a bus shelter in Kuala Lumpur, Malaysia. Malaysian Airline System Bhd) is reeling from its second disaster in four months, sparking fears the airline may lead the country’s entire tourism sector into a tailspin. (Bloomberg photo)
Even before Malaysia Airlines flight MH17 was shot down Thursday over rebel-held eastern Ukraine in an apparent missile strike, Malaysian tourism was under a cloud following the March 8 loss of MH370 with 239 people aboard.
Malaysia's widely mocked response to the missing jumbo jet hurt the country's image worldwide.
With most of the passengers on MH370 Chinese, tourist arrivals from China - a key source of visitors on which Malaysia has pinned much of its hopes for further development of the sector - dropped in the aftermath.
While the circumstances of the two disasters are markedly distinct, perception is key in branding, and the latest tragedy is expected to complicate efforts to repair Brand Malaysia's image.
"Malaysia's competency and governance are not under the spotlight to the same degree as in MH370," Bridget Welsh, a Malaysia researcher at National Taiwan University, told AFP.
"This said, Malaysia Airlines and travel to Malaysia will be affected outside of Malaysia. The effects will not be as serious as MH370 but overall negative."
Some in the tourism sector, however, say any impact may be short-lived as discerning travellers will continue to be drawn by Malaysia's pristine rainforests and beaches, vibrant multi-culturalism and food scene and an overall safe and friendly environment.
Malaysia drew 25 million visitors in 2013 and 65 billion ringgit ($20 billion) in tourism receipts, according to official data.
Hopes were high for 2014, which the government declared "Visit Malaysia Year" with plans to ramp up international promotional efforts centring on its years-long "Malaysia: Truly Asia" campaign familiar to many in the region.
Goals of 28 million visitors and 76 billion ringgit in receipts were set.
Most visitors are day-trippers from neighbouring Singapore but Malaysia is targeting bigger-spending arrivals from the Middle East, Europe and particularly China.
Chinese arrivals have soared, hitting nearly 2 million last year - 7% of the total. But Chinese anger over MH370 caused arrivals from the country to drop 20% in April, according to the latest Malaysian figures.
A pedestrian walks past the Petronas Twin Towers as it stands illuminated at dusk in Kuala Lumpur, Malaysia. Malaysian Airline System Bhd, reeling from its second disaster in four months, plans to present a revival plan to its state-run parent Khazanah Nasional Bhd this week, amid reports the national carrier is likely near the end of its days as a publicly traded company. (Bloomberg photo)
The China Business News reported Monday that concern over travelling on Malaysia Airlines, a major feeder of visitors to the country, has crimped arrivals by more than 40% since MH370, citing figures collected from Chinese travel agencies.
"The crash of the Malaysia Airlines flight (MH17)... has deepened consumers' concerns over the carrier," the report cited an official with China Environment International Travel Service as saying.
The official added that MH17 had led to a "large number" of new Malaysia travel cancellations "because a lot of tourists no longer trust Malaysia Airlines' safety."
Malaysia's tourism ministry said in a statement it is "monitoring the market situation closely."
"International tourists are definitely going to be thinking twice, thrice about flying on Malaysia Airlines," said Jonathan Galaviz, a partner with the US-based travel and tourism consultancy Global Market Advisors.
Malaysia's image has not been helped by a wave of kidnappings and other deadly violence on the coast of Malaysian Borneo, normally popular for scuba-diving and nature enthusiasts. Bandits from the nearby Philippines are blamed.
While the country's flag carrier has taken a beating Tan Kok Liang, the vice-president of the Malaysian Association of Tour and Travel Agents, said agencies are hoping tourists will continue to visit the country on different airlines.
"Our outlook is that the average tourist will still want to come to Malaysia. The latest incident has got nothing to do with the safety of Malaysia and there is no reason why people will stay away," he said.
That seems to bear out with foreign travellers arriving at Kuala Lumpur International Airport after the latest incident, with most saying they were mostly unperturbed.
"Sadly there is a lot of scepticism about coming to Malaysia ... This is my first time. I came because I am attracted to its multi-cultural society," Alfred McDonnell, a 60-year-old American teacher, told AFP.