david smith, engaging w the halal agenda ihmc 2010, day 1 session 2

Global Futures& Foresight

David SmithGlobal Futures and Foresight

Ihmcbrunei 2010


You MarketingP

oliticalEconomic

Market

Fin

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Compl

ianc

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Legal

EnvironmentalS

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Technological

Translate Futures thinking and insight into Strategy and Action

Strategic Marketing

Drivers of change

Strategic Foresight


Today Future


Today FutureTomorrow


Five Mega Trends

1. Globalisation Global business, new economies, local CSR

2. New consumption patternsMoral economy, new and informed consumers

3. Changes in the world of work Winning the war for talent

4. Energy and resourcesTowards sustainable business

5. Climate change and environmental pollution

Finding solutions

http://csr-news.net/main/2008/08/04/megatrends-and-the-future-of-corporate-social-responsibility/


Changing influence

http://www.gspip.com/_files/download/CH_engl_GS07352_Fly_Next11_24.pdf

Source: Goldman Sachs Global Economic Group


Economic Growth – Next 10 Years

• BRIC economies:– Deliver 40% global growth by 2018.– 30% global GDP, China makes up 18%.(1)

"We now conceive of China challenging the U.S. for number one slot by 2027.

This is around 10 years earlier than when we first looked at the issue.“

Goldman Sachs economist who coined the BRIC concept told Reuters on June 9th 2009

(1) Ernst & Young in December 2008 forecast/ Goldman Sachs June 9th 2009 forecast


Global population growth

www.watchblog.com Source: Population Research Bureau www.prb.org

The global population is expected to rise from 6.5bn in 2005 to 7.7bn in 2020 and 9.6bn in 2050


Changing world populations


Population Growth by Continent


Islamic Population

• The world population will increase by 2.5 Billion from 2005 to 2050• Muslim countries will contribute 1.75 billion (70%). • In 2005, Muslims represented 24% of world population. • This will rise to 33% in 2050 and 37% by 2100.

http://www.freeworldacademy.com/globalleader/population.htm


Changing religious composition

• Residents of Muslim faith will account for more than 20% of the EU population by 2050.

• Already does in a number of cities. US's Migration Policy Institute

• 70% of Muslims over 55 felt that they had as much in common with non-Muslims as Muslims.

• This fell to 62% of 16-24 year-olds.

Policy Exchange

http://www.telegraph.co.uk/news/worldnews/europe/5994047/Muslim-Europe-the-demographic-time-bomb-transforming-our-continent.html


Supply and Shortages• Global energy demand

up 55% by 2030.

http://www.voanews.com/english/archive/2009-03/2009-03-19-voa33.cfmhttp://www.shepwedd.com/news/industry-news/view/303/report-warns-of-uk-energy-shortage-by-2012/goto.php?url=/services/practice-areas/pensions/

http://upload.wikimedia.org/wikipedia/commons/thumb/d/d6/Nuclear_power_plant.svg/446px-Nuclear_power_plant.svg.png


Depletion of resources

• Tensions over water heightened by 2015, in Middle East, Sub-Saharan Africa, South Asia and Northern China

• India uses up/pollutes groundwater by 2020

• Bio-fuels compete with food for land/water.

One year of food or a tank of SUV fuel.

• 2oC temperature increase means a 12% to 20% fall in global food production by 2100.

• By 2050 we will be 9.6bn but eat like 13bn.

• Global agriculture output must double in the next 30 years to sustain population growth.

World Bank estimates

According to Stanford University and Lawrence Livermore National Laboratory researchers

Unabated climate change could cost the world 5% of GDP/year; if more dramatic predictions come to pass, the cost could be more than 20% of GDP.

Warming of 5.2o Celsius by 2100American Meteorological Society’s Journal of Climate May 2009 .


Supply and Shortages - Water

Red = Extreme Scarcity, Orange = Scarcity, Yellow = Stress,, Blue = Abundant, Dark Blue = Surplus

http://www.grailresearch.com/pdf/ContenPodsPdf/Water-The_India_Story.pdf 2009


Recessionary strategies

• Market Share• Mergers and Acquisitions• Cost reduction• Efficiencies• Agility • Innovation• New Products & Services• New distribution• New business models• New participants

http://news.icm.ac.uk/wp-content/uploads/image/552-1215523032.jpg


Winning Strategies

“The winners will be the companies who knew how to identify opportunities in the

downturn.”Jim Davis, chief marketing officer, SAS

19331930 1932


Winning Strategies

“It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.”

Steve Jobs, Co-Founder, Chairman & CEO, Apple


Winning Strategies

“Great work comes from insight. … Insights are going to come in so many different ways.”

Laura Lang, CEO, Digitas USA, March 2008


Global Trends1. Global instability 2. Volatile worldwide

economy 3. Globalisation 2.0 4. Global warming 5. Energy, water and

talent shortages 6. Bio continues to grow 7. Ageing societies8. Unretirement 9. Work-life blend10. Growth if Islam11. Wealth, health and

happiness12. Urbanization

11. Declining trust12. Cult of celebrity 13. Individualization14. Age of brands15. Social applications 16. Technological

convergence17. Video everywhere18. VOip & ipTV19. Virtuality20. Nano technology21. Digital 24/7 lifestyles22. Cashless society 23. Mobility & convenience24. Rise of the robots


The mother of invention


Halal Markets

• Travel• Tourism• Hospitality• Portals• Web sites• Banking• Insurance• Investments• Capital Markets• Development

• Real Estate• Transportation• Warehousing• Industrial Parks• Health• Cosmetics• Fashion• Shopping• Theme Parks• Food


Halal Markets

• Global Muslim consumer market is estimated at:– US$ 2.7 trillion today– US$ 30 trillion by 2050.

According to a research study conducted by

JWT and AMR in 2009

http://www.brandrepublic.asia/Media/Featuresarticle/2009_05/Feature-Reaching-a-billion-muslims/35695

http://www.schemamag.ca/shop-halal-t.jpg


Islamic Travel & Tourism

• As a concept, Islamic tourism has three main components.1. The revival of Islamic cultures and

the spread of Islamic values.

2. Economic benefit for Islamic societies.

3. Deepening Islamic self-confidence, identity and beliefs.

http://www.staff.uni-mainz.de/alhamarn/Islamic%20Tourism%20-%20paper%20for%20BRISMES%202004.htm


Outlook

"In this ever-changing world, individuality of choice is important to the traveller and some guests seek to reflect the values they hold in the accommodation they choose."

http://www.arabianbusiness.com/press_releases/detail/17309?ln=en


Future Developments• We will see the concept of Islamic

hospitality start to mature around 2010. • Muslims want to travel the way everybody

else does. – Eg: It is about knowing that the food will be

Halal without having to ask.

• For observant Muslims, everything will be comfortable and familiar, with no need to feel embarrassed about making special requests.“(Naseem Javed, president of US branding consultant ABC Namebank International)

• Demand will be particularly strong from Gulf family groups.

http://www.meed.com/uae/specialreport/2008/05/islamic_hospitality_sector_emerges.html

http://www.razabio.com.my/images/halal.jpg

2008


Increased intra-regional travel

• Saudi Arabia visitors trendsetters in 2009.• 68,000 Saudi visitors came to Malaysia last year.• Contributed RM495.7m(US$155 m) to the economy.• Stayed 10.6 nights and spent RM6,430.8

(US$2,009.6) in Malaysia.

• Turkey has also positioned itself as a destination. • 1m tourists from Middle East visited Turkey in 2009• GCC growth up by 16.45%. • Attracted

– 9,000 Kuwaitis,

– 15,500 Saudis,

– 27,000 Moroccons last year.

http://halalmedia.my/2010/05/halal-tourism-flourishes-thanks-to-islamophobia/


Malaysian Tourism 2009.

“Tourist arrivals to Malaysia outstripped expectations in 2009.”

• 21.51m tourists - January-November 2009,

• Up 7.6% year-on-year

• October and November up 14.3% and 11%

• 9% fall forecast by government - start of 2009

• Malaysia did well to withstand the lack of consumer demand for global tourism during a difficult year.

• "Malaysia Tourism Report Q1 2010" report


Middle East Population AgeAgeing

•Bahrain 29.4 33.6 40.9•Egypt 24 27.2 36.1 •Iran 24.8 30.8 40.6•Jordan 23 25.8 37•Kuwait 25.9 33.8 40.1•Lebanon 27.8 31.5 40.2•Oman 19 27 37.2•Qatar 31.7 33.9 41.9•Saudi Arabia 21.4 25.7 36•Syria 20.7 25.4 37.1•Turkey 28.1 31 40.7•UAE 28.1 33.5 40.3•Yemen 16.6 18.8 27.7

Country Average Age Average Age Average Age Today 2020 2050


And we’re living longer lives

Human life expectancies have the potential to reach 500, or possibly even 1000.

“The first person to live to 1,000 might be 60 already”

Dr. Aubrey de Grey B.A., M.A. and Ph.D., University of Cambridge, Cambridge, UK. Born 20th April 1963 -


The Map Changes Weekly


US$ 3.76 Trillion investment by 2020

170 million Tourists by 2020

Capacity for 320 million extra passengers by 2012Over 900 new hotels offering 750,000+ rooms by 2020

900+ new aircraft by 2027

Middle East Travel and Tourism


Drivers encouraging Halal


Increasing Halal Travel & Tourism

• More than 1.6 billion Muslims globally.

• Set to double in the next 4 decades.

• Halal tourism is 10% of global travel market.

• Halal tourism will increase in developing or Muslim-dominated countries worldwide,.

• France and Belgium consider banning burqa.

• Middle Eastern tourists stay away and opt for Muslim-majority holiday destinations.

• Void filled by progressive Muslim countries and other holiday destinations.

• Malaysia sees a steady increase of Middle East tourist over last 5 years.

– 280,000 visitors from the Gulf in 2009– An 8% increase over 2008.

http://halalmedia.my/2010/05/halal-tourism-flourishes-thanks-to-islamophobia/


Halal friendly tourism

• Religious tourism to Saudi

Arabia generates $7bn a year.

• To grow 20% to 2020.

• Increasingly affluent Arab

population under 21.

• Halal-friendly travel is one of the

industry's fastest growing market

segments.

http://www.ameinfo.com/231843.html

http://www.geotourismturkey.com/img/heritage-tours-dome-of-selimiye.jpg


Opportunity or threat

• For tourism professionals in Egypt, there is no room for hesitation, even when faced with the possibility of developing a potentially lucrative industry.

“Our doors are closed to Islamic tourism. We are not an Islamic destination and that is an area of tourism in which we have no interest,” stated Siham Soliman.

http://www.lesafriques.com/en/egypt/islamic-tourism-an-egyptian-nightmare.html?Itemid=35?articleid=0156

http://www.destinationbride.com/files/regions/egypt.jpg


Drivers

• GCC economies and their wish to diversify away from hydrocarbons.

• The rise of Islamic Finance Institutions (IFI’s)• The rise of CSR and trend to ethical investing.• Increasing Middle East spending power.

– World Travel Organisation estimates a $12bn-a-year outbound GCC leisure travel market.

• Increasing regional mobility in the Middle East and many new airports.

• Simplification of visa issuance between D-8 countries (Iran, Egypt, Pakistan, Bangladesh, Indonesia, Malaysia, Nigeria and Turkey)

• Closer integration of the GCC.http://www.ameinfo.com/images/news/4/43964-Dirhamscropped2.jpg

http://www.staff.uni-mainz.de/alhamarn/Islamic%20Tourism%20-%20paper%20for%20BRISMES%202004.htm


A different type of traveller?

• Gulf residents are some of the most travelled people on the planet, with 80% ravelling to at least two countries in the past year.

– 81.51% in the Gulf visited between 2 and 10 countries in the previousyear.

– 25% visited between 6 and 10 countries.

• Culture, sightseeing and comfort for the family are the most important facets of a vacation for Gulf travellers.

• 78% say - time with the family and cultural offerings of their chosen destination far outweighed considerations such as partying or participating in active sports.

http://www.arabianbusiness.com/research/travel-survey-report/feature/518390-gulf-residents-worlds-most-travelled http://www.arabianbusiness.com/research/travel-survey-report/feature/518243-family-culture-vacationers-priorities

Source: ArabianBusiness.com Travel Survey 2008.

http://eshop.krisinternational.net/images/gulfair_logo.jpg


Halal compliant hotels

• World’s first Shariah and Halal compliant chain of international hotels.

• US$ 2 billion to improve their branding in the Middle East.

http://halalmedia.my/2010/01/halal-awakening-for-the-middle-east/

http://www.hotelchatter.com/files/admin/almullahospitality.png


Halal Hotel Ratings

• Crescentrating – Singapore based -caters to the Halal-conscious traveller.

• Introduced its Shari'ah-compliant services.

• Over 100 hotels are users.– 3 in UAE, – 4 in Qatar,– 1 in Bahrain,

• Hotels in China, Malaysia, Indonesia and Singapore have also signed-up.

http://www.ameinfo.com/231843.html

"We are seeing massive growth within this market segment and it was something we needed to be part of. To cater for demand, we have developed our very own rating system and website for travel based on a set of Halal-friendly criteria,"

Fazal Bahardeen, CEO and Member of the Board, Crescentrating.


Halal web 2.0 – Irhal.com

• Irhal.com – “to go away” • Top destinations and places

to stay, eat and shop.• Lists of halal restaurants in

Paris, Beijing, New York.• Muslims can now choose to

stay in more culturally sensitive accommodations.

• Listed hotels have restaurants that serve halal food, segregated swimming pools and prayer rooms alongside conference facilities.

http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100424/BUSINESS/704249904/1005


Halal web 2.0 – HalalTrip.com• In March 2010, Karim Saad launched

halaltrip.com out of Vienna.

“The roots of tourism aimed at Muslims began not in the hospitality industry but in the financial world”Chiheb ben Mahmoud, the senior vice president Jones Lang LaSalle Hotels for the MENA region.

“The idea was to provide investors with Sharia-compliant investment products in hospitality. There were those who wanted to invest in hospitality but did not feel comfortable because of the alcohol, as well as the general style of the product.”

http://www.thenational.ae/apps/pbcs.dll/article?AID=/20100424/BUSINESS/704249904/1005

http://www.halaltrip.com/images/ht_logo.jpg


Sharia Compliant Funded Hotels

• Rotana made Saudi Arabia a priority

• Goal of having a property in every major city in the country.

• Launched a SR2 billion (US$533m) Sharia compliant closed-end fund .

• To develop and own seventeen hotels and furnished apartments comprising 5,500 rooms target completion of 2012.

www.meed.com/uae/specialreport/2008/05/islamic_hospitality_sector_emerges http://www.wtmlondon.com/page.cfm/T=m/Action=Press/PressID=51http://www.abtn.co.uk/news/rotana-set-double-portfolio-2010

http://sherellejacobs.files.wordpress.com/2009/07/hajj-pic.jpg


Sharia Compliant Funded Hotels

• Al-Harameen Fund

• Joint venture AmanahRaya Bhd and

Capital Partners Holdings (Bahrain),

• Hospitality industry in Mecca &

Madinah.

"We see the provision of premier and

sophisticated accommodation, facilities

and related infrastructures in Mecca and

Madinah as a huge but untapped

market,”

http://www.halaljournal.com/article/4648/al-harameen-to-tap-hospitality-sector-in-mecca,-madinah

http://www.ameinfo.com/images/news/2/78182-Abraj_Al_Bait.jpg


Makkah Hospitality development

• Makkah to attract SR375 billion ($100 billion) in investment over the decade to 2018.

• International investment, mainly from GCC, is already impacting the Holy City in the form of:

– New skyscrapers– Shopping malls– Hotels– Timeshare apartments.

• There is minimal collapse in visitor demand.

"Investors are looking for a safe haven and Makkah is as close as you can get to a recession proof-market. Makkah will always have Hajj season and Umrah season," Imad Awad, Head of equity capital markets at NBD Investment Bank, The Weekly Mag.

http://www.arabianbusiness.com/523080-race-to-the-holy-city?ln=en&start=1http://www.magtheweekly.com/20/city.php


Halal Hospitality – Broad appeal

• Firms that comply with the Shari'a code point out that already many of their customers are non-Muslim.

• Jawhara Hotels, an alcohol-free Arabian Gulf chain run by the Islam-compliant Al Lotah conglomerate

• 60% of the clientele are non-Muslims, drawn by the hotels' serenity and family-friendly atmosphere.

http://www.time.com/time/magazine/article/0,9171,1898247,00.html

http://www.emiratesresidence.com/upload/full/d/d593e1a7ed549153acaa6f4544e2d73bs.jpg


A new ‘old world’ consumer era?

Source: Customer Faithful http://www.slideshare.net/nobblytanner/rising-trends-of-the-post-recession-consumer


Consumer Trust

• Consumers are looking to brands they can trust which aren’t necessarily market leaders.

• Opportunities for brands with real depth in their stories to step forward and take extra share.

“Would you pay more for this brand?”– Innocent drew a majority yes of 29%

– brand giants Coca-Cola (28%)

– Pepsi (12%).

Source: Marketing Week , March 2010 http://www.marketingweek.co.uk/trends/shift-in-values-turns-spotlight-on-pretenders/3010637.article


In a crowded 24/7 world

• Context

• Community

• Conversation

• Relevance

Gerd Leonard – Media Futurist


ForesightVision

Culture

Comms

Behaviours

Resources

Cycle

CapabilityValues

Foresight Integration

ELM

Group People Commercial


Today FutureTomorrow


Manager EntrepreneurLeader


Conclusions

1. Islamic tourism and Halal Hospitality is set to be a high growth market. 1% of world GDP

2. Choosing your positioning will be vital:

1. What standard of Halal tourism will you conform to.

2. What position will you take on sustainability in your offerings.

3. What will be the consequence on any existing tourist market.

3. What will attract:

1. Religious tourists to Brunei

2. Holidaying Muslims to Brunei

3. Muslim conference and event organisers to Brunei

4. Use one set of forecasts for planning.


Why now?

1. Global Repositioning:1. Populations

2. Economies

3. Political influence

4. Capital

2. Global economic recovery1. Innovation

2. Spending

3. New consumer values

3. Regulation


Imagine itIf you want to get ahead – you need to look ahead

[email protected]

+44 7932 408901

Thank you

www.linkedin.com/in/dasmith

www.thegff.com

davidsmithgff

david smith, engaging w the halal agenda ihmc 2010, day 1 session 2

Technology