However, the tourist board says the influx of travelers from the Middle East in the month of March - up by 8.6 percent compared with a year ago helped compensate for the downturn.
"The highest performer during the period was the Middle East, which registered an increase of 80.6 percent in comparison to 2007", a tourist board statement said.
The country's deputy tourism minister Faizer Mustapha says the Middle Eastern market is promising with strong diplomatic ties and higher flight connectivity to the country.
"The Middle East market has been very lucrative. We have got 80 percent growth in this quarter vis-Ã -vis other markets and it’s the market with the highest growth," Mustapha said.
"We are going to give specific focus on this market and Iran is also a potential market.