Exploring the $100b plus Muslim travel market
Rushdi Siddiqui (Participation Finance/Banking) / 3 August 2014
Travel is fatal to prejudice, bigotry, and narrow-mindedness. — Mark Twain
Michael Wolf’s book, ‘One Thousand Roads to Mecca: Ten Centuries of Travellers Writing about the Muslim Pilgrimage,’ can be said to capture the Muslim’s drive to travel. It all starts off with the desire at a young age to fulfil one of the five pillars of Islam, Hajj, with examples of explorers like Ibn Battutta, Ibn Jubair or even Malcolm X.
However, the $100 billion-plus Muslim travel market is not confined to Hajj/Umrah, there is a large and expanding leisure market, due to demographics, rising per capita income, lower cost of travel, etc, and it has certain rules of engagement. Thus, the Muslims, as a whole, represent a Brics ‘growth waiting to be tapped’ opportunity.
“Most of these (Muslim) holiday goers are not looking for a religious experience in their (travel) destinations. They are there to enjoy what most other tourists look to enjoy, like the culture, shopping, sightseeing and dining experiences; only without compromising their faith,” said Fazal Bahardeen, Founder and CEO, Crescentrating and HalalTrip.
After Global Islamic Economic Summit (GIES) in November 2013, in Dubai, it seems the Muslim travel market is being treated as a growth market asset class, including by non-Muslim countries, as they want to tap into the $137 billion market.
In 2014, Japan has aggressively rolled out the welcome mat for Muslims, and understands halal food, praying facilities, etc, are important preconditions to tap their consumer dollars. For example, the Japan Halal Summit 2014, to be held on August 4-6, supported by entities like SMIIC and sponsors like Emirates airlines, will have a Halal Tourism/Hospitality session and work-shop dedicated to Halal Travel between Japan and Indonesia.
Singapore based Crescentrating has been educating (rating system) and providing insights about the Muslim travel market place since 2009, and some of the interesting observations include:
• Muslim will be about 25 per cent of world population by 2020;
• Muslim travellers will spend $140 billion in 2014
• 50 per cent of Muslims are below 25 years;
• 53 per cent of Muslims travel as a family.
• The Muslim tourists expenditure annual growth rate is expected to be at 4.8 per cent through 2012-2020. Global expected average growth rate is 3.8 per cent for the same period.
• By 2020, Muslim tourists’ expenditure is expected to be $192 billion representing 13.4 per cent of global tourism expenditure.
• 70 per cent of the global Muslim traveller expenditure comes from 15 markets: Six GCC countries (account for 37 per cent), three SE Asia (10 per cent), Turkey/Iran (16 per cent), and four countries from western Europe (seven per cent).
• Faith Based Needs for Travellers:
• Must Have: Halal food services and prayer information and facilities;
• Good to Have: Water usage friendly washrooms and Ramadan (fasting) services and facilities;
• Nice to Have: No non-Halal activities and recreation facilities and services;
It’s both easy to understand and appreciate Dubai’s efforts to expand its tourist destination offering to include faith based tourism, as it already has ‘Halal friendly’ (HMH) and Shariah compliant hotels (Constella), Islamic banks, Muslim friendly malls, and so on.
But, what’s in the name?
Labelling Muslim travel
The Muslim travel marketing is starting to approach the inclusive argument of ‘form over substance.’ Islamic finance is under-going deeper internal debates on ways and means for international expansion, especially into non-Muslim countries. For example, UAE-based Noor Islamic Bank has become Noor Bank and Abu Dhabi Islamic Bank is slated to become Abu Dhabi International Bank for its international (non-Muslim country) expansion.
The Muslim travel market has been referred to as (1) Shariah travel, (2) Halal travel, (3) Islamic travel and so on. The common denominator here is that it appears to be exclusively about Muslim, yet that is not the direct intentions. For example, when Crescentrating started its operations in 2009, it referred the segment as ‘halal friendly travel,’ and now has settled on ‘Muslim friendly.’
More work, by way of extensive surveys and focus groups, needs to be undertaken as it still comes across as ‘secular exclusive.’ The term ‘family friendly,’ while generic and universal, has an appeal of being ‘ethical,’ as surely Islam/Muslims do not have a monopoly on the concept. Obviously, issues of pork, alcohol, music, movies, and co-ed swimming pools or gym needs to be addressed, as ‘western/secular’ families may/will find above not objectionable.
The spark of Muslim Travel market can be said to the Hajj/Umrah (faith based tourism?), and it has expanded to family based tourism (until we find a better term). The dollar amounts are in the tens of billions, and, those countries/cities, hotels (beyond dry hotels), universities, malls, restaurants, SMES, etc, that understand the Muslim travel market will expand their revenue base.
If you reject the food, ignore the customs, fear the religion and avoid the people, you might better stay at home.
— James Michener
The writer is a global leader and head of Islamic Economy and senior partner at Dinarstandard. Views expressed by him are his own and do not reflect the newspaper’s policy.
Originally published on www.khaleejtimes.com