Lo, Songan and Mohamad, The Macrotheme Review, Winter 2013. 102 January 2013 Volume 2 Issue 1 The Macrotheme Review A multidisciplinary journal of global macro trends Rural Tourism and Destination Image: Community Perception in Tourism Planning May-Chiun Lo, Peter Songan, Abang Azlan Mohamad and Alvin W. Yeo Universiti Malaysia Sarawak, 94300 Sarawak, Malaysia, Email: mclo@feb.unimas.my Abstract Many studies on tourism have demonstrated that tourists and tourism industry players are the major contributors to a destination image in tourism industry. Considering the potential cascading effect that local communities can have on their destinations, previous researches may have underestimated the impact of communities’ power on destination image. The main objective of this paper is to hypothesize the impact of tourism on the local communities and destination image. Tourism impacts were conceptualized as five dimensional constructs to destination image. 297 respondents comprising of local communities from 34 rural tourism sites in Malaysia took part voluntarily in this study. Five hypotheses comprising the dimensions of social, economics, environment, cultural and communities’ value on destination image were developed. SmartPLS 2.0 (M3) was applied to test the hypotheses that comprised both tourism impact and destination image and subsequently bootstrapping was conducted to investigate the standard error of the estimate and t-values. Interestingly, the findings suggested that local communities were most concerned on the social impact and communities’ values on upholding their destination image. Implications of the findings, limitations of the study, and directions for future research were discussed further. Keywords: Rural tourism, Local Communities, Economics, Environment, Social, Cultural, Communities’ Value, Destination Image, Malaysia 1. Introduction Rural tourism is broadly defined by past researchers as tourism which takes place in rural areas, and is run by small firms own by families of the local communities which are often related to production of local agricultural products and local cultural activities (Dimitrovski, Todorovic, & Valjarević, 2012; Ghaderi & Henderson, 2012; Lane, 1994). Researchers in the past (e.g., Ghaderi & Henderson, 2012) have also defined rural tourism as consisting of certain common attributes such as the areas are of low population densities and only a small proportion of land are used and hence provide the tourists with an impression of space. The term rural tourism has been used interchangeably and synonymously with some other terms, e.g. eco-tourism, green tourism, agro tourism, and many others by researchers in the past. Rural tourism in Malaysia is commonly perceived as having large number of rural communities, in which each rural area is equipped with distinct and varied assets. Rural tourism