Boom in Muslim travel in Malaysia

PETALING JAYA: Muslim travel in Malaysia is forecast to have a GDP impact of US$3.6 billion (RM15 billion) by 2020, up 28.6% from US$2.8 billion in 2017, according to new research by Salam Standard.
The country will command a 22.7% share of Asean’s Muslim tourism market, attracting a total inbound Muslim traveller spend of US$4.4 billion by the end of the decade, the 'Global Economic Impact of Muslim Tourism and Future Growth Projection: 2017-2020' report reveals.
By 2020, the direct GDP of inbound Muslim tourism as a percentage of Malaysia’s total inbound tourism GDP, will increase to 20.8%.
The country currently receives US$600 million in direct tax contribution from the inbound Muslim travel sector, almost a quarter (24.4%) of the total collected in Asean, and this is set to increase in line with spending trends to US$400 million by 2020.
Malaysia’s outbound Muslim travel sector is booming too, with expenditure forecast to grow to US$4.8 billion by 2020, up from US$3.7 billion in 2017.
It is one of three Asian countries driving Muslim travel demand, with Indonesia, China and Malaysia collectively on track to contribute a significant 17% of total global Muslim outbound spend by 2020, more than Europe’s 15% by that date.
“The report confirms Malaysia’s significance as a major driver of Muslim travel in Asia,” said Faeez Fadhlillah, Co-Founder and CEO of Salam Standard and Muslim-friendly hotel booking portal, Tripfez.
“The surge in inbound spend reflects its status as an overwhelmingly popular Muslim-friendly destination, which is providing a huge boost to the economy by delivering significant GDP, tax and employment benefits and further increases projected.
“Malaysia is also home to a young and travel-hungry population, and this report highlights the opportunities for the country’s outbound travel industry – and destinations around the world – to target this audience with compelling Muslim-friendly travel offers.”
From a regional perspective, the GDP impact of Muslim travel in Asia is forecast to hit US$33 billion by 2020, up 27% from US$26.2 billion in 2017. The region will grow its market share of global Muslim travel spend to 22% or US$34 billion by the end of the decade.
Asia will directly employ 1.2 million in the industry by 2020, more than half the 2.3 million expected to be employed globally by that date, with 700,000 of those jobs in Southeast Asia, including Malaysia.
From a global perspective, the GDP impact of global Muslim travel worldwide is projected to reach US$183 billion by 2020, up from US$148 billion in 2017.
Asian countries such as Malaysia looking to capitalise on this projected growth should look at major source markets in and outside of region, said Fadhlillah.
“The Middle East generated the majority of global outbound spend (61%) at $62.2 billion in 2017, and this is expected to reach US$72 billion by 2020, with Saudi Arabia and the UAE forecast to contribute an impressive 41% of the total Muslim travel spend worldwide by that date,” he stressed.
“Within Asia, Indonesia and China, are the markets to watch – both are home to fast-growing and increasingly-affluent Muslim populations and they all want to travel.”
Malaysia had all the credentials in place to meet the needs of Muslim travellers, he said, the key was to market them well to each target country or audience and harnessing digital solutions would be crucial.
“The rise of young Muslim travellers, who are avid digital users, presents Malaysia with the opportunity to grow and develop its Islamic digital economy,” added Norhizam Abdul Kadir, Vice President, Growth Ecosystem Development, Malaysia Digital Economy Corporation (MDEC).
“As the agency responsible for growing this sector, MDEC is committed to creating an ecosystem in Malaysia, in accordance with the government’s national strategy to tap the potential of both the Islamic and the digital economy. We believe the Islamic digital economy will further contribute to the nation’s GDP and propel Malaysia to become a high-income nation.”