Experts say escalating oil prices and disruptions to travel another blow to the industry just as quarantine-free travel returns to reality.
Dubai: After two years of strict travel restrictions, international borders are finally opening for quarantine-free travel, coinciding with Ramadan, but experts are questioning the Russo-Ukrainian War’s impact on those opportunities.
Russia’s invasion of its neighbour in late February has caused global oil prices to escalate and disrupted air travel as another blow to an industry already struggling from the impact of COVID-19.
Now experts wonder how the war will affect Muslim travellers’ plans.
While travelling during Ramadan is not traditionally a top priority, there is a growing trend to spend the holy month away, mostly to perform Umrah (visiting Mecca outside the Hajj festival); for leisure and to be with family.
“Muslims generally don’t wish to travel during Ramadan; however, we have seen a trend (emerging) – a small number that is slowly increasing. That was the context before COVID. The pandemic disrupted this trend, but it’s returning,” Fazal Bahardeen, founder and CEO of halal travel specialists CrescentRating and CEO of Halal Trip, told Salaam Gateway.
According to the Mastercard-CrescentRating Ramadan & Eid Lifestyle Report 2022 that surveyed 1,000 Muslims between January and March, only 23% said they were not planning to travel during this Ramadan.
Of those contemplating travel, 34% indicated their purpose as performing Umrah; leisure (22%) and to be with their children (21%).
“Muslims travelling to see family would put that as a priority over leisure and other types of travel, especially if it’s to a destination that has recently eased COVID-related restrictions. Therefore, I don’t see them changing their plans because of the (Russo-Ukrainian War) crisis,” said Reem El Shafaki, travel specialist and partner at DinarStandard, a growth strategy consultancy, and parent company of Salaam Gateway.
“What may be affected is travel for which flight routes require diversions to avoid Russian airspace, since the added mileage coupled with soaring oil prices may price out flights to some destinations,” she said.
Muslim spend on tourism almost doubled from $58 billion in 2020 to $102 billion in 2021 and is expected to grow 50% in 2022 to $154 billion, according to DinarStandard’s State of the Global Islamic Economy Report 2022.
See - Infographic SGIE 2022: Muslim-friendly travel
Air fares going up
Sojern, a US-based digital marketing platform built for travel marketers, indicates Middle East and Africa (MEA) travellers are booking more long-haul flights for the Eid Al Fitr holidays at the end of Ramadan on May 1 and 2.
“In 2021, the US was the most popular destination for Eid travel (from the MEA). In 2022 it is still the US, but the share of bookings has significantly increased, alongside Italy, which suggests people have more confidence with travelling further distances as we recover from COVID-19,” Stewart Smith, Sojern’s managing director, MEA, told Salaam Gateway.
However, these travel plans could be affected by the Ukrainian crisis given the higher oil prices and flight disruptions.
Bahardeen said Halal Trip had paused its tours and holiday packages due to COVID-19, but two months ago announced its first tour to Uzbekistan starting May 13. The tour had a maximum capacity of 40 people and was sold out within a month.
While he does not expect the war to affect travel to Uzbekistan from a location viewpoint, his concern hinges on significantly rising airfares. Between February and March 2022, the return flight price for one passenger travelling between the US and Uzbekistan climbed 50% to $1,800.
“It’s a huge concern, especially as we have pre-bookings for 40 people. When it comes to family reunions, especially in the last 10 days of Ramadan and Eid, travel could be affected if airline ticket prices continue going up – because it’s not just 5% or 10%; it’s almost a 50% increase (in the case of the US-Uzbekistan airfare),” he said.
Other modes of transport are also being impacted. In normal circumstances, road travel would have been cheaper where it is an option. However, with the current increase in petrol prices, the cost of long road trips can be close to air travel, even with the expected price increases in flights, said El Shafaki.
The Organisation for Economic Co-operation and Development (OECD) recently stated Ukraine’s Russian invasion could cut 1% off global economic growth this year and add 2.5% to inflation. These developments mean it will be expensive to travel and increases pressure on small businesses because of their operational costs, Sandra Carvao, chief of market intelligence and competitiveness at United Nations World Tourism Organisation (UNWTO) told Salaam Gateway.
“We have seen oil prices jumping to levels we haven’t seen in 10 years, so that will definitely have an impact on airline tickets. We also know airlines buy fuel in the futures markets, so if the situation continues, we will probably see (a bigger impact) in the long-run,” said Carvao.
Similarly, the Airports Council International (ACI) World expects increased oil prices to have a limited impact on air travel demand in the short-term, mostly because airlines are still fighting for passengers.
“If oil prices stay high (or increase further), in the medium-term (three to eight months) with most countries reopening and with the summer period in the Northern Hemisphere, the demand will increase and some airlines will likely start to pass the increase in fuel price to their customers,” Adam Zampini, director of communications and marketing at ACI, told Salaam Gateway.
Umrah and Hajj unaffected
However, Hajj and Umrah are the only Muslim travel markets expected to be minimally affected by the Ukraine crisis.
“People have wanted to do Umrah for a long time, so the demand will be there irrespective of developments and there are enough people who can afford it, whatever the price points. The same applies to Hajj,” said Bahardeen.
Naeem Patelia, founder of Travel Counsellors, a UK-based company specialised in halal and family-friendly travel destinations, noted people who intended to perform Umrah and Hajj travel were trying to fulfil their travel.
“We currently have a strong demand for Umrah from the United Arab Emirates and South Africa. This is also because people feel Saudi Arabia is a bit distant from Europe, so they don't anticipate any effects from Ukraine,” said Patelia.
However, he added travel has become more expensive for all destinations and quite a few travellers were shocked at current prices for Saudi Arabia and the airfare. Consequently, they were shortening their trip or settling for a different standard of accommodation to make the trip more affordable.
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