Published on : Tuesday, April 11, 2017
Arrivals to Saudi Arabia will reach the 20 million mark by 2020, as the religious tourism sector flourishes in line with increasing demand to join the annual Hajj pilgrimage, the most important religious event of the year in the Muslim world, according to consumer insight firm Canadean.
The company’s latest report finds that the Hajj represents a major tourism opportunity for both domestic and international stakeholders, particularly hotel groups and tour operators, as over two million pilgrims travel to Saudi Arabia in September to visit Islam’s holiest site in Mecca. This surge will help Saudi Arabia offset its recent losses in oil revenue, which accounts for 40% of the country’s GDP, with tourism contributing just 3.5% of GDP in 2015.
Gillian Kennedy, Analyst at Canadean, explains: “While the Hajj is an established ritual in the Islamic world, its importance as a tourism destination has been transformed in recent times. The Saudi government is investing heavily in new hotels and spending more than $ 13 million a year in renovations of historical religious sites. Specific landmark hotel openings in the pipeline include the Abraj Kudai hotel, which will be the world’s largest hotel with 10,000 rooms, built at an estimated cost of $ 3.6 billion.”
According to government statistics, tourist expenditure during Hajj season will increase by 30% over last year’s figures and reach $6.9 billion in 2017. The increase is expected after the Saudi government ended the limit on Hajj pilgrimage visitors as previous overcapacity incidents caused violent episodes amid serious crowding at the Hajj.
Kennedy added: “Despite previous incidents, demand to visit the Hajj continues to grow. With over three million visitors a year, tourist accommodations are witnessing a major increase in prices. With at least 40% of pilgrimage expenditure used for accommodation such as hotels or fully-furnished apartments, there are a plenty of investment opportunities with significant revenue potential emerging in the Saudi Kingdom. Already, 13 of Mecca’s 15 old neighborhoods have been rebuilt to make room for hotels and commercial spaces. One square meter of land in the area surrounding the Grand Mosque is currently valued at $122,350, resulting in much of the native population selling their property to the government or to real estate developers.”
The country will complete the following hotel projects in the coming years. This data is provided by TOPHOTELPROJECTS.
Hilton Al Ahsa: The hotel is now under construction and will be strategically located in the downtown area of Al Ahsa in an upcoming district surrounded by a growing number of residential, retail and commercial developments. The hotel will have direct access to the city’s main thoroughfares and also enjoy close proximity to Al Ahsa Regional Airport.
Hilton Al Jubail Corniche: The hotel, located on the Al Jubail Corniche, will be one of the few waterfront developments being built, adjacent to the upcoming marina and in close proximity to Industrial Zone 1, the city’s business hub. The hotel will be designed as a city resort to meet the requirements of the business and leisure tourism markets.