Kingdom to focus on Haj and Umrah for revenue

Kingdom to focus on Haj and Umrah for revenue

JEDDAH — Saudi Arabia will strengthen its Haj and Umrah service sector as part of a diversification strategy and reduce dependence on falling oil revenue.

Analysts have emphasized that Haj/Umrah is the second most important economic sector after oil and gas.

Economists consider Haj and Umrah as vital sectors with significant growth potential and ability to create more job opportunities for young Saudi men and women.

The tourism sector contributes SR85 billion to the gross domestic product (GDP) with Haj and Umrah providing a whopping SR45 billion.

With the completion of expansion projects at the two holy mosques in Makkah and Madinah, the revenue from the sector is expected to double.

Saudi Arabia currently receives nearly two million foreign Haj pilgrims annually. The figure is expected to reach 2.7 million by 2020.

It also receives more than six million Umrah pilgrims in nine months of the year. The figure is meager compared to the Kingdom’s potentials.

The tourism sector was instrumental in creating more than 100,000 jobs for Saudis within a short span.

Revenue from the tourism, Umrah and Haj sector is expected to grow by SR35 billion during the next five years through cultural, historical and medical tourism.

Abdul Ghani Al-Ansari, a member of the National Tourism Committee, emphasized the need to restructure the sector to make it a major contributor to the national economy.

There are 49 Saudi companies that are licensed to provide Umrah services. There are a similar number of Haj service firms in addition to 3,000 foreign agents. The total number of pilgrims who come for Haj and Umrah is estimated at between 7.3 million to 7.5 million, contributing SR57 billion to the GDP. This figure is likely to increase in the coming years, he said.

“The total capacity of hostels and furnished apartments in Makkah and Madinah is not fully utilized due to lack of good planning,” Al-Ansari told Okaz/Saudi Gazette.

Makkah can now accommodate 12 million pilgrims while Madinah can house only 230,000 visitors. “This shows there is big gap when we compare the two holy cities,” he pointed out.

He called for the establishment of a center to discuss revenues generated from Haj and Umrah.

He urged authorities to increase the number of Umrah service firms to more than 100 to bring more pilgrims from all over the world.

The Ministry of Haj can meet its annual budget on its own without any need to depend on government funds to implement its projects, he said.

Economist Abdullah Katib estimated the annual revenue from the Haj season at SR20-23 billion on the basis of the number of Hajis, which had fallen during the past five years as a result of expansion works at the Grand Mosque in Makkah.

“About 40 percent of this revenue comes from housing, 15 percent from gifts, 10 percent from food and the remaining from other services,” Katib said.

“As a result of ongoing expansion projects, the number of Haj and Umrah pilgrims is expected to increase by not less than 30 percent during the next five years. This demands construction of more hotels and housing units. This will enable the housing sector alone to generate SR9-12 billion during the same period,” he explained.

He said the annual increase should be balanced in order for the holy sites to accommodate the Hajis.

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Article by: saudigazette.com.sa