Makkah hotel room rates break records

Several tourism and commercial firms are taking advantage of high demand by leasing hotel rooms with views overlooking the Grand Mosque for up to SR70,000 (or in some cases, SR100,000) a night, operators in the hospitality sector recently revealed.
“These firms act as brokers by sub-leasing accommodation units to pilgrims and Umrah firms at extortionate and off-the-radar prices,” said Mansour Abu Rayash, head of the real estate committee at the Makkah Chamber of Commerce and Industry (MCCI).
“They are taking advantage of the fact that there are a limited number of rooms to compensate for low seasons at other times of the year and to cover yearlong operational expenses.”
“Pilgrims are conned into paying anywhere between SR30,000 and SR70,000 a night,” he said.
“No matter how you look at it, Makkah is the most expensive city for purchasing land and leasing out property during peak seasons. In Dubai, the cost of a hotel room can reach SR15,000 for the same level of accommodation and services.”
“Unfortunately, supervisory authorities cannot fine hotels that charge SR100,000 for a room in the central area,” said Abu Rayash. “They actually calculate prices based on the cost of land, construction and furnishing. Add to that service charges and profit margins and you end up with a price hitherto unheard of.”
“A hotel room in Makkah can cost anywhere between SR150 and SR100,000 a night depending on the location,” he said. “The city has witnessed a massive influx of pilgrims from inside and outside the Kingdom, particularly from the Gulf States, with the advent of the summer vacation.”
“This is in spite of the fact that authorities have limited the number of Umrah pilgrims in Makkah and Madinah to 250,000 per city.”
Expansion projects in the Grand Mosque, worth about SR400 billion, have contributed to price hikes since there are fewer places to stay.
“Hotels to the south of the Grand Mosque are limited to Jabal Omar Hotels, Al-Ghaleb and Al-Tawhid hotels and some a few buildings to the north,” he said.
There are an estimated 60,000 rooms in Makkah, but the majority of these rooms are very far from the Grand Mosque and most pilgrims do not opt for them. Most Umrah pilgrims end up going for the 4,000 rooms that are nearer to the central area.