Rooms Hotels

Malaysian Hotels Target $126 Billion Muslim Tourism Market with Cultural Changes

Feb 26, 2014 1:00 pm

Skift Take

Hotels worldwide are learning how to serve a new kind of customers with cultural differences, but instead of attempting to offer everything for everyone, hotels should focus on a certain set of customers and make that experience flawless.

— Samantha Shankman

Report: Social Media Customer Service in the Travel Industry

 / Flickr

A Muslim wedding takes place at the Concorde Hotel in Kaula Lumpur, Malaysia. / Flickr


Indian businessman Abdul Jamil visited Malaysia for the first time this year, drawn by the idea of a vacation offering cultural sights and amenities tailored to suit Muslims.

“Everything is easy for a Muslim on holiday here and it’s easy to get halal food,” the 62-year-old from Chennai said this week at a park in Kuala Lumpur with his wife and two children. “It would certainly be good if there were more hotels with Islamic facilities. That would make me come back.”

The number of Muslim visitors to Malaysia has more than tripled to 5.5 million since 2000, outpacing a doubling in the numbers of tourists overall, government data show, and the country’s Hajj fund set up a Shariah-compliant hotel in the northeastern state of Terengganu last year. The worldwide Islamic tourism market will increase 52 percent to $192 billion by 2020, according to a 2012 report by New York-based researcher DinarStandard and Singapore’s Crescentrating Pte Ltd.

The prospect of luring more such travelers is behind a government push to draw up rules to tap an estimated $126 billion in Muslim tourist spending worldwide. Under proposals being drafted by the Islamic Tourism Centre, hotels will be encouraged to stop serving alcohol, prepare food according to religious guidelines and require men and women to use facilities such as swimming pools at different times, Director-General Zulkifly Md. Said, said in a Feb. 24 interview in the administrative capital of Putrajaya.

Major Market

“We are seeing increased interest from countries, especially in Asia, to become more Muslim-friendly,” Fazal Bahardeen, founder and chief executive officer at Crescentrating, an Islamic travel research company, said in a Feb. 19 interview from Singapore. “It is a very fast-growing major market, comparable even to the Chinese market.”

Travel-related companies in Southeast Asia’s third-largest economy have also been active in tapping funding sources that comply with the Koran’s tenets. Malaysian Airline System Bhd. raised 1 billion ringgit ($306 million) in a sale of sukuk with no set maturity in 2012. Issuance of ringgit-denominated Islamic bonds rose 62 percent so far this year to 9.5 billion ringgit, data compiled by Bloomberg show.

Some 71 percent of the stocks traded on the country’s stock exchange are regarded as Shariah-compliant.

The Islamic Tourism Centre, set up by the government to assist the tourism ministry, is working on the new guidelines with hotel operators, tour guides and travel agents, Zulkifly said. They are targeted for completion this year and compliance won’t be mandatory as they are intended to serve as a guide to hotels that want to be more Muslim-friendly, he said.

Alternative Destinations

The government estimates the number of Islamic holidaymakers in Malaysia will increase to 6 million in 2014 and 6.5 million in 2015, Zulkifly said. Muslims have been looking for alternative destinations since the Sept. 11, 2001 terrorism attacks in New York spurred a wave of “Islamophobia” in the west, he said.

“If Malaysian hoteliers and travel agents were to realign their marketing and readjust their in-house facilities, they will get the economic benefits that they are looking for.”

Some 5.5 million Muslim tourists visited Malaysia last year, compared with 1.5 million in 2000, according to figures from the Islamic Tourism Centre. Total arrivals climbed to 25.7 million in 2013 from 10.2 million in 2000, government data show.

Not Crucial

Indonesians topped the list of Muslim tourists in Malaysia in the first nine months of 2013, making up 40 percent of arrivals, according to data from the Islamic Tourism Centre.

Not all Muslims think it’s crucial to stay in Islamic lodgings though.

“It’s important for me that a hotel gives me the option to eat halal, but it doesn’t mean I won’t stay in a hotel that’s not halal,” 22-year-old Indonesian Desi Ardianti said last week at the Shariah-compliant Sofyan Inn in Tebet, Jakarta. “As long as you don’t choose what’s forbidden by Islam, it’s alright.”

Muslim tourist spending worldwide reached $126 billion in 2011, with travelers from Gulf Cooperation Council countries accounting for 37 percent of that, according to the DinarStandard report. Expenditure will grow by an average 4.8 percent a year from 2012 through 2020, more than the 3.8 percent forecast for all tourist spending, and will account for 13.4 percent of the total, according to the report.

The GCC comprises Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Bahrain and Oman.

GDP Contribution

Non-Muslim nations are also seeking to attract Islamic travelers. New Zealand and Japan have published guides on halal restaurants and Global Health City Hospital in Chennai obtained halal certification in 2012 to tap the Shariah-compliant medical tourism market. Hotel Grand Chancellor on Australia’s Gold Coast has a Ramadan lounge for Muslims holidaying during the fasting month, joining accommodations from Dubai to Turkey that offer amenities such as prayer rooms, and halal food.

Malaysia’s economy grew 5.1 percent last quarter from a year earlier, the fastest pace since the final three months of 2012, official data show. The yield on the country’s 10-year sovereign Islamic bonds fell 10 basis points, or 0.1 percentage point, this year to 4.3 percent, a central bank index shows.

Travel and tourism accounted for 15.6 percent of Malaysia’s gross domestic product in 2012, and this will rise to 16.8 percent by 2023, according to a report last year by the World Travel & Tourism Council in London.

Malaysian authorities are hoping people like 60-year-old Lebanese businessman Bassam Ghrawi will contribute to the forecast increase.

“At the Islamic hotels in Turkey, you can get a room with its own pool and that means that my wife and girls can swim as they please and we’re not surrounded by women in their bikinis,” Ghrawi, who owns a chocolate factory, said in a Feb. 25 phone interview from Beirut. “With a Shariah-compliant hotel, I’m in the right environment and I’m at peace.”

With assistance from Dana El Baltaji in Dubai. Editors: Andrew Janes and Sandy Hendry.

To contact the reporters on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net; Yudith Ho in Jakarta at yho35@bloomberg.net. To contact the editors responsible for this story: Sandy Hendry at shendry@bloomberg.net; James Regan at jregan19@bloomberg.net.

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