Islamic Inspection Service - SIILHalal

Airbnb may be one of those rare unicorns - a start-up that is actually profitable and planning to go public in 2020 - but it is yet to attract many successful halal copycats even though some believe its homeshare model might appeal particularly to Muslim travellers.

Perhaps the most prominent is now up for sale, according to its founder and chief executive. On December 4, Hadi Shakuur, an American hip hop artist and entrepreneur, announced on Facebook: “Looking to sell Muzbnb”, which opened for business in 2017.

Muzbnb describes itself as a “faith-based peer-to-peer online marketplace and homestay network which seeks to encourage travel, adventure and the building of a global community where Muslims feel comfortable and accepted while traveling.”

“Muzbnb allows Muslims the ability to host and book halal accommodations for leisure or business travel anywhere in the world,” it says about itself.

Take away the references to religion and the pitch could just as easily be describing the global leader in homestay accommodation.

When approached by Salaam Gateway, Hadi confirmed the sale but declined to be questioned about it, hence we don’t know his reasons for wanting to sell Muzbnb.

It is striking how few homeshare platforms, either online or accessed through apps, are available for Muslim travellers seeking halal alternatives.

Given Muslims’ specific requirements and the success of Airbnb, one might expect more to have launched by now, according to the founder of a service that invites bookings for halal homes and guesthouses.

“I’m surprised that it has been slow,” said Balqees Abrahams, chief executive of StayHalaal, a South African website based in Port Elizabeth.

“If we read some of the reports regarding the halal industry, how much growth there is and how much money there is in it, it is surprising. Muslims like to be able to control their environment when they rent accommodation, be near to mosques and halal food,” she told Salaam Gateway.

With a similar model to Muzbnb, StayHalaal is a low-volume site that rents out properties specifically to Muslim guests. Launched in 2010, it lists up to 40 establishments in South Africa and receives 10-15 enquiries per day during peak holiday season.

“A large global Muslim market that is underserved is definitely a good place to be in,” Abrahams added.

LOOKS GOOD ON PAPER

According to the latest State of the Global Islamic Economy report by DinarStandard, the Muslim-friendly travel sector is vast and filled with potential. It says that Muslim expenditure on travel in 2018 was $189 billion and the report authors expect this to hit $274 billion by 2024. This year, the report singles out “customised digital Muslim-friendly travel” platforms as one of its “hot sectors for growth” in 2020.

Yet despite this, halal homestays is not a category being embraced by venture capital firms that provide the funding for technology start-ups, according to Taraec Hussein, a vice-president at Gobi Partners in Kuala Lumpur.

Taraec's role is to identify fledgling companies in the digital Islamic market, or TaqwaTech, as Gobi calls them. He had earlier spoken to Shakuur about the Muzbnb sale but decided to pass on it.

“The proposition of a Muslim-friendly Airbnb just isn’t strong enough for us. Our view is that there are a lot of Muslims who do rent out their homes on Airbnb and [the platform] is mostly Muslim-friendly. For us, when we were talking to MuzBnB and other players, it just didn’t seem strong enough [for investment],” he told Salaam Gateway.

When it comes to the Muslim homeshare market, guests are not as concerned if an establishment’s fridge has previously contained pork compared to if the bathroom has a bidet, he said, pointing to research by Tripfez, a Muslim travel booking platform from Malaysia that was acquired by Gobi in 2016.

“Everything else was less relevant to a Muslim traveller. They also care about the availability of halal food,” said Taraec.

“Whether the pots and pans and fridge are pork-free or halal really doesn’t matter,” he added.

Another barrier for halal homeshare start-ups as they pursue funding concerns scale.

Airbnb is so successful because it offers properties all over the world, from small towns to global metropolises. Taraec believes a halal version would struggle to lure even a fraction of this number.

For Muzbnb, Salaam Gateway on Dec 17 counted 825 listings, 70 of which are in the United States.

“Let’s say if Airbnb did not exist, I think there would be greater potential for [halal homeshares] to grow. But you have a large incumbent that is well-funded, and if the proposition is not strong enough, there is no way you will compete with an Airbnb.

“If there was no Airbnb, sure, we could potentially play a risk-averse bet on these guys,” he added

This might go some way to explaining why Muzbnb, StayHalaal and Malaysian start-up Homs are all privately funded and have failed to secure venture capital cash.

NEW ENTRANT

Kuala Lumpur-based Homs, which launched in May and now lists some 800 establishments in its home country, hopes to attract investment through its scale and ambition.

Its founder, Mohd Shah bin Mohd Yusof, an airline pilot, assessed the paucity of global competitors prior to launch and decided he would employ a model based on scale that would take the app into other Southeast Asian countries.

“When I did my research, I was surprised because this halal tourism industry will be worth more than $270 billion and nobody had started this kind of app. That’s why I’m so delighted to be one of the first start-ups to be involved in this,” Mohd Shah told Salaam Gateway.

“People are either oblivious or they haven’t noticed the opportunity here because the halal tourism market is so huge. MuzBnB has been launched but it doesn’t look like it has worked out. Their number of hosts is very limited.”

Homs has five staff and the start-up has been funded by two close friends of Mohd Shah. Now he hopes to show venture capital firms that Homs has the reach to justify further investment.

In its first year, the app will focus on growing the number of its listings in Malaysia before launching in Indonesia, and its vast Muslim market, next year, followed by other countries in the region.

“I’m very confident that so far what I’ve planned and forecast has been steadily achieved at this stage,” Mohd Shah said.

“I don’t see any reason why Homs would fail because this is an untapped segment in the market. I hope for a day when I can do this full time. In the meantime, I’m still flying planes,” he added.

Source: Salaam Gateway