Surviving the Ramadan slump

Traditionally a time when Muslims stay home with the family, how will Ramadan impact travel in the coming years?

With Ramadan arriving in the summer for the next five years Claire Malcolm looks at how the Holy Month is set to impact holiday sales

T he arrival of Ramadan on 1August this year — right in the middle of peak summer holidaying season — signifies the start of a potential five-year slump for the typically high- volume, high-margin summer travel period in the Gulf.

It’s a daunting prospect for travel agents across the GCC, reliant on leisure travel as a major profit driver. As Muslim travellers opt to either curtail their summer plans or to remain on home turf, travel agencies have been forced to revisit strategic plans and pull out all the creative stops in order to boost business over the crucial summer months.

Shifting travel patterns
But while travel agents acknowledge that the potential loss of revenue due to the ‘Ramadan slump’ is a major concern — there doesn’t appear to be any sense of panic in the air, as agents say Ramadan will signify a ‘shift’ in travel priorities, rather than a blanket wipeout.

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William Horsley, general manager, Al Futtaim Travel says he anticipates a 10 - 15 % loss in revenue over the summer holiday period, but is banking on a “late booking rush” over Eid break to offset this.

“The summer vacation period starts in June/July; so the majority of traffic is already planned and ticketed to ensure availability. However, the local population has postponed their leave, as in general Muslim travellers prefer to stay home during the Holy Month and this directly impacts our sales,” says Horsley.

Horsley also cites the shift in pricing policy by the major airlines, with the re-classification of the period to ‘shoulder’, rather than ‘peak’, as indicative of the need to re-strategise to maintain sales.

Vik Naidu, general manager, Al Rostamani Travel, agrees that Eid bookings will help to mitigate any summer slump: “The arrival of Eid and the great amount of travel done during this period tends to offset any slowdown incurred during the month prior.”

Naidu also anticipates that some Muslim clients will still want to take a holiday, despite it being Ramadan.

“Since Ramadan falls at the height of summer this year, we do still expect many of our customers to travel during this period in order to escape the heat. The UAE is very cosmopolitan and as such our client base is of a diverse nature, thus we do not anticipate any real loss of revenue during this time,” he adds.

Another Ramadan trend — extended trips — is highlighted by Dina Al Herais, vice president, Commercial Operations, Emirates Holidays. “Based on current enquiries, forward booking trends and feedback from the markets, we anticipate a change in the travel pattern in terms of departure date and duration,” she explains.

“The majority of GCC nationals and Arab expats currently travelling are expected to return back to their home countries by the end of July. However, we also see a minority of Arab nationals and non-Muslim expats who will take advantage of low season discounts and offers, and choose to have a longer vacation.

“There is also an increasing trend where some people — mainly couples and honeymooners — bring their holiday plans forward to avoid coinciding with Ramadan.”

Al Herais is cautious with her take on the market situation: “Overall revenues will not suffer, yet the seasonality trends will certainly look very different compared to previous years. This will require a lot of planning and forecasting. There will be more trips with shorter durations,” she predicts.

“This might put pressure on operators as the leisure destinations’ seasonality trends from a destination perspective will not change, so we will have to adapt.

“There will be opportunities in some areas and challenges in others. Having said that, it is all manageable and the only one true challenge that remains will be the difficulty to forecast in very late booking markets,” she elaborates.