Makkah leads Saudi pipeline
The Kingdom of Saudi Arabia recorded a rise in international tourist arrivals from 6.5 million in 2000 to over 18 million in 2014. Perhaps unsurprisingly, much of the increase was due to Hajj and Umrah travellers.
Hajj is one of the five pillars of Islam and it is obligatory for every Muslim to make the pilgrimage to the holy city of Makkah at least once in their lifetime, provided they can afford to do so and are healthy enough to travel and perform the rituals. In contrast to Hajj, Umrah isn’t mandatory and can be performed at any time of the year.
According to the latest STR statistics for the Middle East region, Saudi Arabia reported the most rooms under construction with 35,770 rooms in 81 hotels followed by the UAE with 26,989 rooms in 93 hotels. Makkah is leading hotel development in Saudi Arabia, with 24,133 rooms currently in the construction pipeline.
The number of people coming to Makkah to perform Hajj is increasing year by year and it is estimated that the number will increase from 12 million in 2012 to almost 17 million in 2025. It costs an average of $6,000 for an individual to make the annual Hajj pilgrimage and the religious tourism industry in Saudi Arabia makes up almost 3 per cent of the country’s gross domestic product (GDP). In 2012, the country generated more than $16.5 billion from revenues of Hajj and Umrah services.
The Ministry of Hajj and Umrah recently announced that Umrah pilgrims this year could reach up to 7 million, with more than 1.2 million coming from Egypt followed by more than 900,000 visas issued to pilgrims from Pakistan and around 655,000 visas issued to Indonesians. The Ministry noted that this year has already recorded a 5 per cent rise in Umrah pilgrims – a figure that is expected to soar 30 per cent by 2020.
In its recently published 'Vision 2030', Saudi Arabia’s leaders recognise the important role tourism plays in the endeavour to ready the Kingdom’s economy for the 'post oil' future. The government is encouraging the private sector to support Makkah and Madinah in their efforts to welcome even more religious tourists every year, but is also keen to increase tourism activities beyond the traditional Hajj and Umrah offerings, spreading the tourism spending to other parts of the Kingdom and tapping into the growing halal tourism market to cater to Muslim travellers worldwide, particularly those from the Gulf Arab states.
In Makkah and Madinah, demand for land currently considerably outstrips supply and hoteliers are faced with the options of building higher or looking at alternative locations. Many developers favour the first option.
The Abraj Kudai, forecast to open in 2019, will add 10,000 new rooms to the market and overtake the Venetian and the Palazzo complex in Las Vegas as the largest hotel in the world. Hilton recently opened its first Conrad property in Saudi Arabia in the heart of Makkah and is also set to add a Double Tree and two Hilton properties to the city’s market later this year, each with more than 800 rooms.
Other hospitality operators are favouring a different approach and are looking at alternatives further away from the central Makkah area.
Philippe Harb, the COO of One to One Hotels and Resorts, said: 'Religious tourism is extremely important for our growth in the KSA market, but the sheer density of developments around the Haram is pushing larger developments outwards. We have identified Al Aziziyah as a prime district for future growth and that’s where our Makkah hotels are located. We’re also investing in new properties in Jeddah, because it’s the traditional gateway to Makkah. Furthermore, we’re looking at offering our guests extended and all-inclusive packages for all our hotels in Saudi Arabia, so that they can explore other parts of the country before or after their Hajj or Umrah.'
The Carlson Rezidor Hotel Group recently opened a Park Inn in the city’s Al Naseem district and has another planned in Al Aziziyah.
A Holiday Inn and a Ramada Plaza are other recent additions to Al Aziziyah, which is located three kilometres east from the Masjid Al Haram. The city is building a new road to connect the two areas. The closest airport to Makkah and Madinah, Jeddah’s KAIA is undergoing expansion aimed at increasing the airport's capacity from 15 million passengers per annum to 30 million in 2013, 50 million in 2020, and 80 million in 2035.
The country’s rail network is also set for expansion joining a large number of other infrastructure improvements aimed at making it easier for domestic and international travellers to move around the Kingdom. The development of the Haramain High Speed Railway and the Makkah Mass Rail Transit System are a case in point.
The country’s government aims to create 370,000 additional direct jobs in tourism and the national heritage sector by 2020, reaching 1.2 million jobs. It has recently made it easier to obtain tourist visas and hopes that other hotel operators will follow the example set by Abu Dhabi’s Rotana, which started its foray into the Kingdom with one property in Makkah, but expects to add 1, 400 rooms to its Saudi inventory in the next two years with new properties in Riyadh, Jeddah, Dammam and Al Khobar.
By Martin Kubler