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How are millennials influencing the Muslim travel market?

15 February 2019

The growing ‘Muslim lifestyle’ market no longer refers to purely halal food. It now includes tourism, fashion and financial services with online travel guides and shopping portals aiming to capitalise on the growing sector. Typically, a majority of the world’s 1.6 billion Muslims purchased goods and services from conventional suppliers. However, there is an increasing number of Muslims seeking religiously permissible consumption in sectors such as travel. According to Crescent Rating, there were approximately 126 million Muslim travellers in 2016 with the number expected to grow by nearly 30 per cent to 156 million by 2020.

The growing ‘Muslim lifestyle’ market no longer refers to purely halal food Click To Tweet

expected growth in number of muslim travellers

Muslim travellers are anticipated to spend USD 157 billion by 2020, according to Faeez Fadhlillah, Founder and CEO of Salam Standard and Tripfez (Muslim online booking site). This accounts for expenditure on Halal food, hotels, excursions & experiences, and shopping. The number is expected to rise to a further USD 300 billion by 2026. A majority of this growth is fuelled by millennial Muslim travellers from fast-growing economies such as Indonesia, Malaysia, Turkey, and Gulf countries. With 60% of the population in Muslim majority countries currently under the age of 30, the growing influence of technology and a desire to explore the world are just a few of the reasons young Muslims are fuelling the growing market. Crescent Rating estimates that more than 30 per cent of Muslim travellers in 2016 were millennials with another 30 per cent belonging to Gen Z – the demographic cohort after the millennials. Of 121 million Muslim international visitors in 2016, over 72 million Muslim travellers were either millennials or Gen Z.

Muslim travellers are anticipated to spend USD 157 billion by 2020 Click To Tweet

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total muslim international visitorsexpected spend by muslim travellers

Industry experts define the Muslim traveller market as a highly lucrative segment as millennial travellers are expected to enter peak earning, spending and traveling life stages over the next five to ten years. Millennials consumers are known to have significant disposable income and seek more exotic experiences.

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With approximately 1 billion Muslims under the age of 30 that account for 60 percent of the population in Muslim majority countries, the younger Muslim population is where the opportunity lies when it comes to the Muslim travel market.

 

According to MasterCard research, the top 10 most visited destinations among Muslim millennials were Malaysia, Indonesia, UAE, Turkey, Saudi Arabia, Qatar, Singapore, Japan, Thailand, Australia, United Kingdom, United States of America and India. Furthermore, they also found that a majority of Muslim millennials are avid travellers – they travel between two to five times a year and for an average of four to six days per trip. Muslim millennials are cost-conscious travellers with the majority spending on average between USD 101 to USD 500 per expenditure component (flights, accommodation, meals, shopping, miscellaneous) for each trip.

top ten visited destinations among muslim mellenials

 

Role of Asia and Middle East:

According to Salam Standard, the global Muslim travel sector has a projected GDP of USD 183 billion by 2020; showing a steady increase from USD 148 billion in 2017. As a result of this growth, the industry is set to directly and indirectly employ 5.6 million people globally. The Middle East has the second highest projected GDP impact from Muslim travel, amounting to USD 18 billion by 2020. The latter follows USA, with a GDP impact of USD 21.4 billion.

According to Salam Standard, the global Muslim travel sector has a projected GDP of USD 183 billion by 2020 Click To Tweet

projected gdp growth in muslim travel sectorprojected gdp impact by 2020

According to Faeez Fadhlillah – CEO and Founder of Salam Standard and Tripfez, “With the sector forecast to continue its strong growth trajectory, driven by Asia and the Middle East where young and aspirational populations and an increasingly-affluent middle class are hungry to travel the world in a faith-compatible way, savvy destinations and travel companies around the world can capitalise on this market’s untapped potential.”

UAE ranks highest globally in Halal tourism spending with an estimated USD 17.6 billion spent by UAE residents outside the country during 2017, according to a new report. Click To Tweet

According to Fazal Bahardeen, CEO of Crescent Rating and HalalTrip, new types of travellers are driving the growth of Muslim travel. Bahardeen states “We are definitely seeing the influence of a new breed of young travellers, millennials and Gen Z who are combining technology with a real desire to explore the world while still adhering to their faith-based needs. They will be the driving force for the next phase of growth. These younger travellers want greater choice, unique experiences and constant connectivity which can be seen with the growth of other Muslim lifestyle segments, such as halal food and modest fashion which link perfectly with the travel market.”

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UAE ranks highest globally in Halal tourism spending with an estimated USD 17.6 billion spent by UAE residents outside the country during 2017, according to a new report. New analysis from Dubai Chamber of Commerce and Industry also revealed that Saudi Arabia and Kuwait ranked second and third, respectively. Based on recent data from Mastercard and the World Travel & Tourism Council, Saudi tourists spent USD 16.1 billion in 2017, while Kuwaiti travellers spent USD 10.4 billion during the same period. The UAE was named as a destination of choice for Muslim travellers due to several key factors including its competitive business environment, wide variety of travel and tourism activities, advanced ICT readiness and world-class airport infrastructure.

ranking based on spending halal tourism in 2017projected growth in global islamic country

The opportunity

According to the Pew Research Center, the Muslim demographic around the world is expected to grow twice as fast as the overall world population between 2015 to 2060, reaching a projected 3 billion individuals. In terms of consumer spending alone, the global Islamic economy generated USD 1.9 trillion in food and lifestyle expenditure in 2015 with growth projection reaching USD 3 trillion by 2021.

With such huge potential, the term “Muslim travel” has been used very loosely across the tourism industry. There is a misconception that purely offering ‘Halal food’ makes a tourism entity ‘Halal Friendly’. As Enver Cebi, COO of HalalBooking.com explains: The concept has been used as a ‘term’ by all industry players without proper understanding and adoptability. This multi-billion dollar market is growing year-on-year but many still believe that Muslim tourism is all about people doing things like pilgrimages, religious tours etc. Halal tourism, however, is completely different. In reality, Muslim travellers go for regular holidays but are concerned that their basic religious needs are met.”

Muslim travellers tend to weigh in specific factors before reaching a firm decision on a travel destination. There should be facilities that allow for accessible prayer areas, restaurants & cafes serving certified Halal food, and toilets with provision for ablution. Most travellers will flock to social media or do extensive research on the web prior to embarking on their journey. At the same time, governments have an opportunity to help local businesses by offering prayer facilities and Halal food in public locations like airports, railway stations, and places of interest. Taiwan is cited as an example of a country actively working to meet this demand.

Like millennials around the world, Muslim millennial travellers will likely start their buyer’s journey on the web by searching for travel content. However, most mainstream sites such as Booking.com and Agoda don’t have dedicated listings for Halal-friendly establishments or significant insights on where Muslims might feel comfortable – a factor which is imperative for Muslim millennial travellers searching for the right hotel space. Research finds that 53% of millennials book through online travel agents and prefer not to opt for travel packages. In addition, Muslim millennial travellers focus on finding properties which are close to entertainment centres and public transport areas. Another trend that needs to be considered is that Muslim millennials also avoid travelling in the month of Ramadan as due to fasting, they are unable to explore and enjoy the destination properly.

Millennial values are increasingly shifting away from the acquisition of goods, going towards a focus on experiences such as travel. For Muslim millennials, travel is more than just a vacation – it is often viewed as an opportunity for personal growth and development, to seek new experiences and for bonding with family and friends

Millennial Muslims are more likely to spend money on businesses catering to them, but that means that the service must also meet expectations. If a hotel provides things like segregated swimming and gym facilities for women and men, it is more likely that this will attract Muslim travellers to stay at their accommodation.

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