The online Muslim-friendly or halal travel booking segment continues to be underserved by scaled-up competitors, leaving three well-known OTAs in the sector optimistic about their own prospects. However, they believe that one day, a big OTA such as booking.com is bound to arrive.
In the United Kingdom, HalalBooking’s hopes of becoming a unicorn have still not been dashed even though it has only met just 5.2% of its valuation goal.
The start-up announced in 2015 that it intended to be worth $1 billion by 2018. But a small funding round last year has put its valuation at $52 million.
Notwithstanding, HalalBooking’s head of marketing, Ufuk Secgin, has doubled down on the ambition.
“We haven’t achieved it yet,” he told Salaam Gateway, “but we are confident that we will achieve it in the next five years.”
HalalBooking, founded in 2009, claims to be the biggest global online travel agent for Muslim-friendly travel. It was on track to end 2019 with $30 million in bookings and spent last year adding new destinations to a portfolio of more than 1,600 properties.
A series A round, which closed in December, raised $2.5 million, but to achieve its desired billion-dollar valuation, the start-up will have to seriously ramp up its fundraising efforts. To this end, Ufuk confirmed that a series B round will take place later this year or in early 2021.
“We are profitable, we are growing regardless of investment and our mission is just to grow faster,” he said.
“This year will be important in terms of further growth so we can demonstrate to potential investors that we are continuing along our growth path. We can expand even further with more investment.”
To fuel this growth, HalalBooking plans to invest heavily in marketing, and spend on R&D to develop new features, like an upcoming swimwear filter that will narrow down searches to properties that allow burkinis in their swimming pools.
While there are other halal travel booking services, most of these operate on a local or regional level, believes the marketing chief.
“There is no one really who is serving the global halal market like ourselves. Most of them lack the technology—they are far behind us in terms of technical capabilities.
“We do not see anyone at the moment who is really seriously attacking this market.”
Malaysia-born Tripfez may well contend HalalBooking’s claim.
Tripfez was founded in 2013 and in May 2016 raised $750,000 in a seed round led by China VC Gobi Partners. In 2018 it merged with HolidayMe when the UAE-based company raised $16 million in a series C round, also led by Gobi Partners.
The merged entity is a bigger proposition than HalalBooking, although it doesn’t reveal any financials.
However, while Tripfez continues to focus 100% on halal travel, the bigger HolidayMe platform it’s part of does not position itself specifically as a halal OTA although being based in the Middle East has made it attuned to the needs of Muslim travellers.
HolidayMe’s competitive advantage over HalalBooking is its umrah business line, which comes up against a big name mainstream OTA that recently entered the space. In December 2017, Singapore-based online travel booker Agoda launched a dedicated section for umrah travel.
With this as a sign, Tripfez anticipates an established conventional name to expand into halal travel.
“There is a huge gap in the market,” co-founder Faeez Fadhlillah told Salaam Gateway, adding that differing expectations of what constitutes a halal establishment in competing markets have led to a level of fragmentation in the segment. This complication, in turn, has put off would-be market entrants.
“Overall, competition shows that there is a lot of demand to grow into, otherwise they would not venture into the halal sector. They know it’s a huge market and demographic that they have not tapped.”
The youngest of the three, Rihaala, a booking engine for Muslim-friendly travel that allows customers to hand-pick flights, hotels, excursions and transfer, is planning its strike.
It launched in May 2019 stating its intention to become the “world’s leading halal-friendly travel provider within a very short timeframe”.
Owned by UK Muslim-friendly travel specialist Serendipity Tailormade, it is “close to finalising fresh investment”, according to founder Nabeel Shariff.
“Our Rihaala proposition has been met with very positive vibes. The objective is to nail down our investment plans to take Rihaala forward, and then it’s really about getting the message out there about Rihaala,” he told Salaam Gateway.
A decade on from opening Serendipity, Nabeel believes awareness of Muslims’ needs has been growing in the travel industry, though the products available have not evolved sufficiently.
“The product options are very limiting. There is certainly demand there, but whether the supply can meet that demand is still up for discussion,” he said.
Like HalalBooking, Serendipity has been working with hotels and hospitality chains to help them improve their services for Muslims. Before a property would commit to investing on a women-only swimming pool, for example, it would need to be confident that it would be financially worth it.
“That discussion hasn’t happened with a lot of properties. When you mention halal, hotels can get scared that you are shutting out non-Muslim guests. They think you have to do one thing or the other,” Nabeel added.
It is only a matter of time before a big name in online travel, such as Booking.com or Expedia, will enter the halal segment even more fully than Agoda, he believes.
“I don’t think it is too far away. These companies do acquire start-ups whose market they aren’t reaching. I wouldn’t say this year, but in the next 3-5 years, we could see something like that.”
Aiming to fatten substantially over the next five years, HalalBooking’s leadership hopes its unicorn valuation will come at a time when a Booking.com, Expedia or Agoda finally decides to muscle into halal travel.
Its marketing chief Ufuk Secgin is convinced the 11-year-old start-up will be the top prospect for an established platform to show its largesse, pressing HalalBooking to drive its growth further and faster.
“At the moment they are not investing in this market, but sooner or later they will smell the coffee and see that there is a $230 billion Muslim travel market. It’s far too big to ignore,” he said.
“By the time they start looking into it we will have grown further. We would be an interesting proposition for a takeover by those giants because of our market dominance, our technology expertise and, most importantly, because of our customers and our halal content, which we will develop continuously.”
(Reporting by Richard Whitehead; Editing by Emmy Abdul Alim [email protected])
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