Walid Abu Sab’a, head of the committee for tourism and hotels at the Makkah Chamber of Commerce and Industry, said there has also been a decrease of 30 to 50 percent in the rent rates of hotels in the Central Haram Area during the current Haj season.
He attributed this mainly to the substantial increase in the number of new hotels and residential apartments that have been licensed to accommodate Haj pilgrims.
“In addition to this, there has been a steady decrease in the rent of hotels and residential buildings since last Ramadan,” he told Al-Eqtisadiah business daily.
According to Abu Sab’a, the fall in occupancy rates affected not only hotels in the central Haram area but also in outlying districts, mainly Aziziyah where a large number of hotels and residential buildings have sprung up in recent years.
“The decrease in occupancy rates was not restricted to hotels. This is also the case of a large number of residential buildings that secured licenses to accommodate Haj pilgrims in the districts of Aziziyah and Shisha as well as at the townships of Al-Bank, Satar Al-Lahyani and Al-Shawqiya,” he said.
Abu Sab’a noted the hotel occupancy rate in the central Haram area during the period from Dul Hijjah 1 to 14 last year ranged from 98 and 100 percent.
However, this year it fell by about 10 percent mainly because of the emergence of a number of new licensed hotels, he said.
Abu Sab’a pointed out that last year there were several hotels and residential buildings that failed to secure a license for accommodating pilgrims.
“Therefore, these buildings remained vacant throughout the Haj season. They have completed all the necessary procedures to obtain licenses well before the current Haj season,” he said.
The chamber official said hotels and residential apartments managed to earn huge revenues since the beginning of the current year due to an influx of Umrah pilgrims, and rent rates were also comparatively higher.
“But the rates began to fall after the peak Umrah season of Ramadan. Most of the operators of hotels and residential apartments were forced to lower their charges by up to 50 percent due to the stiff competition,” he said.
Abu Sab’a also drew attention to the fact that most Haj tour operators rent out hotels and residential apartments in the central Haram area only in the later phase of the Haj season because of the high rent.
“This is not the case for hotels and residential buildings in outlying districts. This is also another reason for a fall in rent in the area after the Umrah season,” he added.