Prime Minister Abdullah Ahmad Badawi said today that a recent spate of street protests has hurt the tourism industry, with hotels and tour agencies reporting cancellations.

Last month, nearly 40,000 demonstrators calling for electoral reforms massed in the capital, and a week later, at least 30,000 ethnic Indians protested alleged discrimination by Muslim Malays who dominate the population.

Images of police dispersing the crowds with tear gas and water cannons and arresting scores of demonstrators were beamed around the world.

State news agency Bernama quoted Abdullah as saying the protests have hurt room bookings in the city's main tourist district of Bukit Bintang.

"If already 10 percent of the bookings are cancelled, it's a loss to the hotels," he said.

"Besides, I believe that the tour agencies and tour bus operators have also received cancellations," he added.

Second-largest exchange earner

Tourism Minister Adnan Mansor said on the weekend that the protests had impacted on tourism, but he was still confident of reaching a target of 20.1 million arrivals for the year.

"The ministry's special team had to work round the clock to provide accurate information to tourism offices overseas and foreign travel agencies," he told Bernama.

Faced with growing regional competition, the government spent RM200 million to promote "Visit Malaysia Year 2007" to boost the sector -- the nation's second-largest foreign exchange earner.

Although Malaysia's multiculturalism is a major selling point for tourism authorities, ethnic Chinese and Indians say they face discrimination by Malay Muslims, who make up 60 percent of the population.