In a bid to diversify its petrodollar economy, Saudi Arabia has become a surprise contender for a slice of the Gulf’s tourism pie, and travel to the Kingdom is set to rocket over the coming years.
While the travel and tourism industry globally took a battering last year thanks to the economic downturn; there was one shining star. Thanks to the resilience of the religious tourism market, the industry in Saudi Arabia seems to have survived the storm surprisingly well.
According to a recent report by Business Monitor International, the Kingdom is expected to receive 12.91 million tourists in 2010, a figure which will grow 6.5 percent year on year. And Saudi’s Commission for Tourism & Antiquities (SCTA) has reported that revenue from tourism will increase 4.8 percent this year to reach SR66billion ($17.6bn), rising to SR118billion in 2015.
As the birthplace of Islam and custodian of the Holy Mosques in Makkah and Medina, which hold vital importance for Muslims seeking to undertake Hajj and Umrah pilgrimages, the potential for religious tourism in Saudi is huge. The current numbers still represent only a tiny fraction of the world’s 1.8 billion Muslims.
Around three million Muslims gather in Makkah each year to perform the Hajj, which takes place once a year and is one of the five pillars of Islam. The Saudi government has had to set a strict cap on the number of people allowed in, with visa quotas in place for all countries.
Umrah meanwhile can be undertaken at any time of the year. Ramadan is peak season, and with the Holy month arriving during the summer over the next few years, experts are anticipating demand for pilgrimage travel to rocket in the coming years.
Ziad Bin Mahfouz, CEO of Elaf Group – one of Saudi’s biggest travel and tourism companies, told ATN: “We have positive expectations for this year. Tourism for religious goals has become a vital sector for the Kingdom of Saudi Arabia and we anticipate a rise in the number of Hajj and Umrah pilgrims, with visitors from Egypt and Morocco predicted to account for the largest increases. Given these positive developments we expect our profits for 2010 to surpass last year’s figures.”
Meanwhile agents selling ‘pilgrimage packages’ to Makkah and Medina report a burgeoning demand for religious travel among their clients. Mohammed Al Rais, deputy managing director of Dubai-based Al Rais Travel said Ramadan saw demand peak: “During Ramadan we saw a huge demand from our clients to go to Saudi and we expect to see a lot more demand for the coming years, especially with Ramadan taking place over the summer holiday period. People don’t expect to travel on holiday during Ramadan but they all want to travel to Saudi for a pilgrimage.”
Building up the Industry
In order to try to accommodate the growing numbers of visitors to Saudi Arabia, the government is pouring billions of dollars into overhauling the infrastructure in the Holy Cities, as well as re-instating old heritage areas, and developing brand new tourism projects along the Red Sea coast.
Upcoming projects include the 444km-long Makkah-Madinah rail link, a $6billion system that will ferry pilgrims between the two cities, via Jeddah, in around 30 minutes. The current journey by road can take between four to five hours.
Madinah Airport is also currently undergoing a $2.4billion upgrade – a move that will allow the terminal to handle 12 million passengers a year; a four-fold increase on its current capacity.
Meanwhile, King Abdulaziz International Airport in Jeddah is undergoing expansion which will allow it to handle 30 million passengers by 2012 and 80 million when complete; plus there’s a new monorail system being built in Makkah to link the city centre with holy sites at Mina, Arafat and Muzdalifah, scheduled for completion in 2011.
A recent report by Jones Lang LaSalle stated that the planned developments will increase the potential number of pilgrims visiting the Holy Cities to around 13.75 million by 2019.
Outside of the Holy Cities ambitious plans include a $13 billion ‘tourist city’ in Al-Oqair, south of Al Khobar, on the east coast, which was announced earlier this year.
The luxury experience
One area that still needs serious attention is the hotel stock. According to Jones Lang LaSalle: “most of the existing hotel stock (around 50,000 rooms in Makkah and 20,000 in Madinah) is not of international quality and there is a clear need to increase this supply to accommodate the growing and maturing requirements of pilgrims undertaking Hajj and Umrah.”
International operators are beginning to realise the potential of Saudi’s burgeoning religious tourism market and are lining up to deploy their most prestigious upscale brands to the Holy Cities. Whereas once a pilgrimage might have been all about the sackcloth and ashes, nowadays it’s a rather different story and the industry is witnessing a rising demand for high-end travel.
“At the present time, Saudi is like Dubai was ten years ago – all the demand is for the five-star luxury hotel market,” explains Christophe Landais, managing director of Accor Hospitality Middle East which is pursuing an aggressive expansion plan in Saudi Arabia, with a plan to develop 15 new hotels in the Kingdom over the next five years.
Last month Raffles Hotels & Resorts opened its first Saudi property in the Abraj Al Bait complex, in Makkah – a seven-tower development directly adjoining the Grand Mosque.
Mohammed Arkobi, vice president and managing director of Fairmont Raffles Hotels International — Makkah, said the prime location means the hotel will provide a “unique and one-of-a-kind experience” for pilgrims. The ultra-luxury property features personal butlers and is described as a “new step in the hospitality sector in Saudi Arabia”.
More luxury hotels soon to follow at the complex include the Makkah Clock Royal Tower, a Fairmont Hotel; and Swissotel Makkah, due to open in 2011.