Sunday, 5 November 2017

Muslim Millennial travellers are the subsegment to watch

Muslim Millennial travellers are going to be a significant proportion of all Muslim travellers in future, with enormous purchasing power.
Muslim Millennial travellers are going to be a significant proportion of all Muslim travellers in future, with enormous purchasing power.

Fazal Bahardeen.
New research has found that Muslim Millennials are a key part of the “third billion” consumer segment that could shape the travel industry. The Mastercard-HalalTrip Muslim Millennial Travel Report 2017 (MMTR2017) has revealed the important role the next generation of Muslim travellers will play in the global tourism sector.

The research projects total expenditure from Muslim Millennial travellers alone to surpass US$100 billion by 2025, while the overall Muslim travel segment is estimated to reach US$300 billion by 2026.

Aisha Islam, VP, Core & Digital Products, Indonesia, Malaysia & Brunei Division, Mastercard, noted that the Muslim travel market has become one of the fastest growing segments globally, with Millennials a key subsegment.

"There are approximately 1 billion Muslims under the age of 30," she noted, describing the younger Muslim traveller's needs for greater choice, constant connectivity and space to practice faith-based activities. "When it comes to Mastercard, we are committed to delivering and developing the best solutions to serve this very important segment."

Mastercard has a Halal Benefits Program, halal-rated and halal-certified offers as well as global travel packages available for shari'ah-compliant cardholders, Aisha said.

Raudha Zaini, Marketing Manager, HalalTrip, a B2C platform for Muslim travellers, noted that Muslim Millennial travellers have a great deal of clout. She shared that:

- Six in 10 Muslims are below 30 years old, and 33% of all Muslims are in Gen Z

- Muslims have the fastest-growing population of any of the major religious groups

- Over a third (36%) of Muslim travellers in 2016 were Millennials

- By 2026, HalalTrip estimates that Muslim travel expenditure will reach US$300 billion, with a third of that amount - S$100 billion - to come from Muslim Millennial travellers.

Raudha also shared the three 'A's that Muslim Millennials want: authenticity, affordability, and accessibility:

- Muslim Millennial travellers prefer to do their own research when planning trips. They rely on social media and online reviews when planning trips

- They are budget-conscious but take many trips. They travel two to five times a year, with each trip planned one to six months in advance

- Besides being information-seeking, they are also information-sharing, and use social media heavily. They will share images and videos in real-time on platforms like Instagram and Facebook

- They differ from other Millennial travellers only in faith-based needs. They will use online prayer tools, and qiblah direction* apps, whereas older generations would bring a physical compass to determine the qiblah direction when they travel. They search online for halal food, and want recommendations for Muslim-friendly facilities.

- They want authentic halal ramen in Japan instead of Middle Eastern cuisine like kebabs and shawarma. They want to interact with locals.

Fazal Bahardeen, CEO of CrescentRating and HalalTrip said, "When you consider that the Muslim travel market is relatively young, these insights from this report give a clear indication where the tourism industry needs to focus their efforts.”

Forecasts for Muslim travel expenditure.
Forecasts for Muslim travel expenditure.

"The growth of the young Muslim market segment, which is increasingly affluent, signals a huge potential for the international market of Muslim-friendly travel-related products and services," he explained.

“Travel within this young generation of Muslims is booming as consumers with more disposable income seek more exotic experiences and far-flung destinations than their parents."

Bahardeen also pointed out that Muslim Millennials will grow rapidly as a highly lucrative segment in contemporary tourism as they will be entering their peak earning, spending and travelling life stage within the next five to 10 years.

"There is no doubt that all eyes from all parts of the tourism sector should be on this market which will drive spending on airfare, hotels and excursions,” he said.

Aisha said, “Millennial values are increasingly shifting away from the acquisition of goods toward 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.

“As the Muslim Millennial market continues to expand, there is no denying that they will be a key driver of growth for the travel industry. Service providers looking to tap into this segment need to understand their relationship with travel and what they value – such as authenticity, affordability and accessibility, as revealed in our research – while ensuring that they also cater to their faith-based needs and requirements.”

With approximately 1 billion Muslims under the age of 30 and representing 60% of the population in Muslim majority countries, the younger Muslim population is where the opportunity lies when it comes to travel. By 2030, Muslims are projected to make up 29% of the global population aged 15–29.

CrescentRating estimates that more than 30% of Muslim travellers in 2016 were Millennials with another 30% 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.

According to the study, KSA, Malaysia and Turkey are the largest outbound travel markets (editor's note: outbound travel refers to the traveller's country of origin) for Muslim Millennials in Organization of Islamic Cooperation (OIC) countries. Germany, the Russian Federation and India rank as the top three outbound travel markets for Muslim Millennials in non-OIC countries.

The study also shed light on the travel motivations, habits, needs and preferences of the Muslim Millennial segment.

·         Among the Muslim Millennials surveyed, in addition to travelling for leisure and holiday purposes (93%), they travel to experience local cultures and heritage (63%) and to visit friends and relatives (43%).

·         The majority of Muslim Millennials are avid travellers – they travel between two to five times a year (46%) and for an average of four to six days per trip (41%).

·         Muslim Millennials are cost-conscious travellers with the majority spending on average between US$101 to US$500 per expenditure component (flights, accommodation, meals, shopping, and a miscellaneous category) for each trip.

·         Respondents surveyed showed a preference for free and independent travel (72%), as they value flexibility and control during their trips. Muslim Millennials are tech-savvy, confident and comfortable with planning their own trips using online resources. Only 5% opt for fully-packaged tours.

·         The majority of Muslim Millennials said they spend between one to six months to plan a trip (61%), researching extensively and reviewing a variety of traditional and online sources prior to travelling.

·         The top 10 most visited destinations among Muslim Millennials were Malaysia, Indonesia, Japan, Thailand, Australia, Singapore, the UAE, the UK, the US and India.

·         Cost of flight and accommodation, safety and terrorism concerns, and the availability of halal food were the top three influencing factors when Muslim Millennials plan their travels.

·         When it comes to food choices at a destination, Muslim Millennials rated affordability, authentic halal options of local specialties and authentic local specialties as the top three most important considerations.

Panelists at a subsequent session on the Muslim Millennial at the Halal in Travel – Asia Summit 2017 conference spoke of marketing to Millennials.

From left: From left: Razy Shash, Co-founder, 2Stallions Digital, a digital media agency, moderator, technology; Nabil El-Shafeay, Global Head of Partnerships, BeMyGuest; Mamoun Hmedan, MD, Wego Middle East, North Africa and India; Atikah Amalina, Educator, social activist and influencer and solo traveller, The Tudung Traveler; and Aliza Kim, TV and social media personality.
From left: From left: Razy Shash, Co-founder, 2Stallions Digital, a digital media agency, moderator, technology; Nabil El-Shafeay, Global Head of Partnerships, BeMyGuest; Mamoun Hmedan, MD, Wego Middle East, North Africa and India; Atikah Amalina, Educator, social activist and influencer and solo traveller, The Tudung Traveler; and Aliza Kim, TV and social media personality.

Nabil El-Shafeay, Global Head of Partnerships, BeMyGuest, a distributor for tours, activities and attractions, said that visits to mosques are trending in the Middle East. "Travellers care a lot about Islam. They look for something more unique, something to complete their faith," he said, listing learning about the culture of their destination as an example. "Halal food is a must right now but they looking for something different."

Mamoun Hmedan, MD, Wego Middle East, North Africa and India, said that the company had shifted to focus on the needs of Muslim Millennials in the last year. "Muslim travellers are looking for new destinations that can cater to their needs," he said, calling the trend "beyond shawarma".

"They need interaction, they're adventure seekers as well. We are adding filters in the product (so visitors can) look for hotels with mosques nearby."

Atikah Amalina, Educator, Social Activist, Influencer and Solo Traveller, The Tudung Traveler, 
said that it is important and very useful to identify niche markets that can be directly catered to. "That conversation needs to be had," she said.

"People need more content, more influential tools, not only on social media but also (mainstream) media to inspire people, to tell them where to go," Nabil agreed.

Mamoun shared that his company is looking at virtual reality as a marketing tool and spoke highly of using influencers as a marketing strategy. "People are obsessed about social media generally," he said. "Influencers are 4x better than any other digital marketing channel we had used before. (They're promoting Wego) through experiences versus us talking about Wego," he said.

Aliza Kim, a TV and social media personality, said that her approach with fans had evolved over the years. She had begun with sharing more personal experiences but realised that her followers genuinely wanted to contact the same places and visit them, so now provides more details for destinations. Her needs are geared towards helping her followers live vicariously through her travels, interviewing imams in mosques for example.

"You have to look at the influencer's personality, who their followers are. A lot of my followers are conservative," she said. "You have to uphold the influencer's image as well. I'm usually teaching fiqh (فقه, Islamic jurisprudence) and shari'ah to new Muslims – you have to align proposals with the person, what they do and their followers."

Aliza listed visits to mosques and interviews with local imams and local communities as must-dos on her travels. "I look for things that can tell a story," she said. "I want to talk to refugees."

"My trips have to be 100% shari'ah-compliant, prayers must be on time**," she added.

Atikah has a different focus, and is more of a storyteller who is also known as a spiritual traveller, she shared. "(It's about) stories about experiences and interactions with people," she said. "People hunger for real experiences, real emotions, real struggles."

Atikah also stressed that Muslim Millennials, while already a subsegment, is very varied. "Do not fall into the trap that it is a generic group," she said, pointing to herself as an example. "I'm a Muslim Millennial traveller but also a solo traveller, and I'm also a solo female traveller, that's a subsegment of a subsegment. There are different needs and sensitivities."

Aliza further cautioned against stereotypes that traditionally-dressed hijabis are unwilling to try new things. She spoke of a fellow traveller with a full-face niqab who swims with sharks, and being interested in zipline activities herself.

Atikah recommended tweaking marketing language and looking at universal values. "From outside looking in it can look daunting especially if you are not Muslim yourself," she said. "Most Islamic values are universal values. It's just about your copywriting, to say that we are catering for your values, not to take an arm and leg out to accommodate the Muslim traveller.

"We're all human. We need to eat, we need to sleep, we need to have fun experiences. How do you cater (to these with) services in just the language that you use?"

Aliza said that the industry should look earlier in the sales funnel. Her plans for a destination begin with looking at Instagram feeds and sending direct messages through Instagram, looking for example for places where she can pray. "By the time I get to the AirBnB I am just like a normal traveller," she said. "I don't need you to go out of your way, I just want to be normal and have amazing experiences."

Nabil concluded, "The Muslim traveller is just like any other traveller but we look for more to complete our soul. We want to be comfortable. If there is a mosque near to where I am staying I prefer to go there. If there is local halal food I want to try it and comment on it."

Mamoun concurred. "I want the most comfortable place, the most spacious place, but at the same time halal food is an important factor especially if it is good. I like to go personally to experience these places and see what's the difference between these Muslims and the culture from where I'm born."


Read the Mastercard-HalalTrip Muslim Millennial Travel Report 2017 report

Crescentrating also tracks other aspects of the Muslim travel market.

The Global Muslim Travel Index ranks 130 countries in terms of their Muslim-friendliness as travel destination, and projected that Muslims will spend US$4,300 billion in travel expenditure by 2026.

The Muslim Travel Shopping Index (MTSI) benchmarked 40 cities on how Muslim-friendly they are as a shopping destination. It also charts the behaviour of Muslim travellers in travelling, shopping and dining. CrescentRating has found that they spend almost US$26.1 billion on eating alone, based on 2014 figures. Bahardeen said that the MTSI will likely be revisited next year.

The Ramadan Travel Report 2016 looked at the next 15 years and how it will impact 15 destinations, while Muslim Business Traveller Insights 2016, introduced at the Halal in Travel event last year, showed that the market is worth up to US$23 billion in terms of expenditure.

Hashtags: #MuslimMillennialTravel, #HalalinTravel

*The qiblah shows the direction to face when performing obligatory prayers. Muslims pray facing the Ka'abah. There is no penalty for guessing the direction and getting it wrong but knowing its exact direction is always better.

**A good Muslim does not just pray the prescribed five times a day but also times them as close to prayer time as possible, or after each call to prayer.