KUALA LUMPUR, April 24 — The tourism market’s outlook has dimmed markedly after the recent missing Malaysian Airlines flight 370, according to a study by the Malaysian Institute of Economic Research (MIER).

According to the study of this year’s first quarter, the Tourism Market Index (TMI) fell by 24.5 points from the previous quarter to 115.8 points despite this year being declared as a Visit Malaysia Year.

“The Malaysian Airlines MH370 tragedy is also believed to be one of the factors that contributed to this fall when the number of Chinese tourists to Malaysia following this incident dropped considerably,” said the report released today.

The report noted that the tragedy had exacerbated the already slower travel season at the current time of the year.

However, MIER said that the positive underlying points were that the index increased by 0.3 points from the same period last year, and the index also managed to stay above the 100-point threshold.

MIER pointed out that the drop was caused by poorer readings in both the Hotel Operators Index (HOI) and Travel Agencies Index (TAI), which fell by 35.2 and 4.0 points respectively.

This comes as 45 per cent of hotels opted to raise their rates, while 60 per cent of the hotels suffered decline in gross margins due to low occupancy rates, said the poll.

Only 36 per cent of the hotels reported increases in occupancy, compared to 76 per cent in the previous quarter. A total of 39 per cent said that they suffered from “poor” occupancy.

But MIER said that the industry is expected to rebound in the second quarter of 2014, as campaigns by Tourism Malaysia are set to boost tourist numbers.

However, this enthusiasm is tempered by issue of safety and security, with more than 60 per cent of respondents troubled by petty crimes such as snatch theft and pickpocket.

The TMI is formulated from the responses to 12 questions in a questionnaire mailed to 600 hotel operators and tour agencies.

The questions range from topics regarding sales, occupancy, reservations, gross margins, promotions, prices, employment, and capital expenditure.

Tourism and Culture Minister Datuk Seri Nazri Aziz said in Parliament last month that Malaysia will temporarily stop promoting itself as a tourist destination, especially in China, as a mark of respect for the passengers and crew on the missing MH370.

According to Nazri, it would be hard to formulate a strategy to attract tourists while the plane is still missing, even though Malaysia has declared 2014 as Visit Malaysia Year 2014.

MH370 disappeared on March 8 after it took off for Beijing from Kuala Lumpur with 239 people on board; 153 of the passengers were Chinese citizens. It remains missing despite an ongoing multinational search.