Thursday 28 Mar 2024
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IN this age of the Internet, hotel operators have boundless avenues to promote their offerings to a large audience. At the same time, they can no longer escape user reviews and ratings.

Finding the right hotel, especially when the operator is unfamiliar, is like finding the right date, which is where online travel agents (OTAs) come in.

Typically, OTAs like Agoda, Expedia, Trivago and Booking allow users to search for hotels by location, price, amenities and ratings. From the generated search results, users can filter further via more specific criteria and reviews.

But users want more.

In 2012, California-based Hipmunk debuted a new search feature that rates hotels that are good for different types of travel: family, romance, business and adventure. And in recent years, one or two OTAs have wised up to the immense growth potential of the halal travel market.

With a global Muslim population at 1.6 billion, the halal-friendly hotel market is relatively untapped. Among the biggest markets at the moment are Turkey, Malaysia, Indonesia and Morocco.

Tech startups too have started looking at this market for opportunities. For example, there is the recently launched Muslim travel guide Irhal, which is in both Arabic and English and lists tourist attractions and shopping places in 90 cities around the world. It also indicates the nearest halal restaurants and mosques.

Tourists from the Gulf countries spend about US$40 billion every year, according to a recent study. With the region’s over 70% mobile penetration but lack of Arabic content, Irhal aims to become the must-have resource for all Muslim travellers.

Another startup seeking to play in the halal holiday space is Malaysia-based LagiSatu (lagisatu.com) — a search engine that is specifically for those looking for hotels that abide by Islamic principles.

For co-founders Faeez Fadhillah and Juergen Gallistl, this is their first business venture. As avid travellers themselves, they felt that the best way to encourage travel was to create an online meta search engine for hotels.

Faeez and Gallistl invested around US$200,000 in the site’s development, testing, research and the entire operation, including acquiring partners. In mid-2014, their enterprise received a RM500,000 grant from government agency Unit Peneraju Agenda Bumiputera.

“The process of engineering, initial testing and revising to the final product took about a year. During this period, we acquired more than 15 partners and integrated into the search engine an algorithm that sorts the results according to different criteria,” Faeez says.

Introducing MuslimStars

He claims that LagiSatu compares more than 650,000 properties in 83,000 destinations and that it has the largest database of rated hotels that adhere to Muslim requirements. Hotels can have their business listed and given MuslimStars by joining Lagisatu Business Listing.

Available on the web and mobile phones, LagiSatu searches multiple booking sites for information like hotel prices, reviews, descriptions and photographs. Users are given an overview of available hotels in a particular destination and can discover new prices for the same hotels and rooms by sending a search robot to multiple booking sites.

While there are other halal rating websites, such as Singapore-based CrescentRating, and general meta search engines, such as TripAdvisor, LagiSatu combines the two concepts.

Since it was launched in mid-2013, LagiSatu has rated over 10,000 businesses on a basis of 1 to 100 MuslimStars. Its system allows users to discover how halal-friendly a hotel’s facilities and services are via an algorithm that takes into account what is important for Muslim travellers, such as the availability of halal food and prayer facilities.

Faeez says LagiSatu’s aspiration was to address the needs of the Southeast Asian market, of which 40% is Muslim. MuslimStars was developed after they realised the importance of localisation, he adds.

Last December, LagiSatu launched its mobile platform, which is available in several languages, including English, Bahasa Malaysia, Indonesian, French and Spanish. According to Faeez, they will be collaborating with the Halal Development Corporation this year to accelerate MuslimStars.

The 29-year-old claims that hotels with MuslimStars have a booking conversion of 21% and see 74% more interaction.

The system was tested on 920 Muslims around the world to avoid cultural bias and 83% agreed that the criteria were very satisfactory to them. Some 93% said the very existence of a halal rating will influence their buying decision because, according to Faeez, “their needs are acknowledged by the hotels”.

“The overall concept is not a pure rating in the form of a number, but also a list of amenities and services that a hotel provides the Muslims, like a praying mat, halal food and so forth,” he adds.

A recent survey by CrescentRating sought to determine how Muslim tourists choose their holiday lodgings as well as the kind of services they want but which are unavailable. The survey found that, among others, Muslim travellers seek friendly service, halal food options, a central location, prayer facilities, a non-alcoholic environment, relevant amenities, shuttle service and separate recreation services for women.

The regional travel game

edGY_cs6_1056To grow and to be profitable, a business like LagiSatu must expand beyond Malaysia’s borders. Asia-Pacific is currently the world’s biggest regional travel market, accounting for bookings worth US$320 billion. Malaysians, however, frequently go on domestic holidays with the popular destinations being Kuala Lumpur, Langkawi, Melaka, Pangkor Island, Penang and Port Dickson, Faeez points out.

Internationally, there is great demand for travelling to such places in Asia as Lombok, Bali and Koh Samui. Demand for travel to South Korea and Japan is also high, as the surge in the fourth quarter of 2014 indicates.

“Recouping our initial investment is not our main concern now but trying to grow our user base and brand as quickly as possible. So, our income is focused on these areas. We are profitable but we plough back most of our profit into marketing,” explains Faeez. “We are looking to raise some funding, which we plan to use for product development, fuel regional expansion and build a strong team as we push LagiSatu into different markets.”

He says the plan this year is to increase LagiSatu’s presence in markets across Southeast Asia. The early signs are positive with destinations in Indonesia and Singapore seeing an increase in booking value, he adds.

Beyond regional expansion and addressing the hotel needs of Muslim travellers, LagiSatu wants to serve all their travel needs. The challenge in developing a travel product, explains Faeez, is in keeping abreast of the ever-evolving travel trends and technology and translating all of that into a user-friendly experience.

Since LagiSatu’s mobile app was launched in December, it has been downloaded over 12,000 times on various platforms. The company targets 100,000 downloads by the end of the year.

Faeez says the rise in mobile phone users accessing LagiSatu coincides with the Phocuswright report that says mobile phones will be the fastest growing travel distribution channel in the region with its value quadrupling to US$18.7 billion by this year.

Though the bricks-and-mortar agencies will always be an important part of any travel market, especially in Asia, more and more young and affluent travellers are making bookings online.

It is worth noting that price comparison rose to prominence with the introduction of cheap travel in the early 2000s. This created a market that offered numerous options and despite stiff competition, more sites are popping up to cater for demand for price comparison when travelling.

“The mobile phone market is relatively young in Southeast Asia with no clear dominant player, providing LagiSatu with the opportunity to tap it aggressively for the promotion of price comparison,” Faeez says.

And before the big guys come into the picture, LagiSatu is hoping to stake its claim, starting with Malaysia.

 

This article first appeared in #edGY, The Edge Malaysia Weekly, on March 2 - 8, 2015.

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