Malaysia Toursim Thrives Despite Airline Tragedies

Two airplane catastrophes put Malaysia on the map in a bad way in 2014. But they didn't hurt the country's tourism, and the higher visibility may even have helped: visitor numbers had their strongest growth in years.

For the past decade, Malaysia has run an elaborate campaign to market itself abroad as an ideal Asian destination, touting a multiethnic culture, lush rainforests and pristine beaches. Despite the effort to internationalize, its tourism industry still relies heavily on tightly-packed neighboring Singapore and in a renewed push the government had designated 2014 as "Visit Malaysia Year."

So when Malaysia Airlines Flight 370 went missing with 239 people on board en route from Kuala Lumpur to Beijing on March 8, it put the global spotlight on Malaysia and seemingly dealt a blow to its tourism strategy. A double whammy came four months later when a Malaysia Airlines jet was shot down over rebel-held eastern Ukraine, killing all 298 people on board.

Tourism, however, grew at its fastest pace since 2008.

Figures for all of 2014 haven't been released yet but the government's January-October data shows 22.9 million visitors, a jump of nearly 10 percent from a year earlier. That far outpaced 2.5 percent growth for the same period in 2013 and a 0.7 percent rise in 2012. The full year growth rates for those two years are close to the 10-month figures.

"The bad publicity has made Malaysia more well known to the world," said Jaya Kumar Sannadurai, vice president at Dayangti Transport and Tours. The overall effect on visitor numbers is probably marginal but being the center of attention "is an advantage to us in some ways," he said.

The strong growth in tourism came despite a sharp drop in visitors from China, which had 153 nationals on Flight 370. Many in China were angered by Malaysia's perceived mishandling of the tragedy.

The Malaysian government says satellite data showed the jet crashed into the southern Indian Ocean, but no wreckage has been found despite an exhaustive multi-nation search. Authorities believe the plane was flown deliberately off course, but are still investigating the cause of the disappearance.

Kidnappings since April of foreigners including a Chinese fish breeder and a Chinese female tourist from a resort in Malaysia's Sabah state in Borneo by Philippine gangs also put off tourists. All were released after ransom was paid. Sabah, a popular destination for scuba-diving and nature trails, is a short boat ride from southern Philippines, home to Muslim militants and kidnap gangs.

For January-October, Chinese tourists to Malaysia dropped by 11 percent or some 175,000 people. It remained Malaysia's third biggest source of visitors.

The aim of the Visit Malaysia campaign, with the endangered pot-bellied proboscis monkey as its mascot, was to lure 28 million visitors and 76 billion ringgit ($21.1 billion) in spending. Tourism is already Malaysia's second biggest earner of foreign exchange after manufactured goods.

The country might fall a little short of the 28 million visitors goal for 2014 but a high level of fully paid advance tour bookings and a quick change in marketing strategy by tourism officials helped keep the industry on a growth path overall.

Tourism Malaysia cut promotions in China and focused efforts on India and other markets after Flight 370's disappearance, said its deputy director-general Azizan Noordin. This helped to boost growth in all markets for the first 10 months of last year, except China and Taiwan, he said.

Arrivals from India, which is the 6th biggest source of visitors for Malaysia, were up 21 percent and the number of South Koreans visiting increased by 43 percent. There was also strong growth from Western nations such as the United Kingdom, U.S., Australia and Germany.

But it was Singapore along with Indonesia and Thailand that provided the mass market numbers, together accounting for about two thirds of total visitors.

"Our Southeast Asian neighbors helped to keep the tourist numbers up. We could have done better if it wasn't for the China market," said Hamzah Rahmat, president of the Malaysian Tour and Travel Associations.

Other tour and travel agents said the industry also benefited from a weaker currency in the last quarter of the year, making Malaysia more attractive to foreigners. Malaysia's ringgit depreciated by 10 percent against the dollar in the last four months.

Cheaper air travel and more numerous flights, primarily due to the expansion of low-cost carriers in the region, also helped drive tourism.

Since its two jet tragedies, Malaysia Airlines has lowered fares to help fill seats.

Malaysia has extended its tourism campaign, designating 2015 as "Year of Festivals" with a goal to attract 29.4 million tourists and 89 billion ringgit ($24.7 billion) in total receipts.

Azizan, the tourism officials, said Tourism Malaysia is working closely with China to mount more scheduled chartered flights flying direct to the country from China's second and third-tier cities such as Wuhan and Chengdu. He said Tourism Malaysia is confident of higher Chinese arrivals this year.

Last month, the government waived visa fees for Chinese tourists. Tour agents however, urged the government to allow two week visa-free travel for Chinese visitors to help the market recover faster.

"Regional travel is on the rise," said Joseph Francis Mariasosay Xavier from World Discovery Travel. "I don't think Flight 370 is a factor. People need and want to travel. It's more important to have the right infrastructure and pricing in place."