Makkah hotels ‘not losing huge money’

An official from the Saudi Commission for Tourism and Antiquities (SCTA) has rejected claims that Makkah hotels are losing money this year because of the reduction in the number of local and foreign pilgrims.
Abdullah Alsawwat, executive director of the SCTA in Makkah, said: “Indicators are refuting information being passed around by workers in hotels about the huge financial losses in the sector.”
Alsawwat said the Umrah season was good this year. More than 5.3 million Umrah visas were issued, which meant a reduction of only 100,000 visas compared to last year.
He said the government was considering demands from hotel owners to reduce the value of their contracts or cancel them completely.
He said Makkah remains a promising city for the tourism sector and investors have operational and marketing plans to offset any financial crisis. “The SCTA is always working to develop tourism investment. It has opened 15 investment centers across the Kingdom,” Alsawwat said.
Officials at these centers guide investors to major tourism opportunities and discuss ways to make them successful. They also provide logistical and financial support.
“The SCTA encouraged a number of investors after the last market crisis involving (swine flu) to move gradually from leasing to owning property, or sign new deals to share ownership,” he said.
Alsawwat said there are 649 hotels with more than 135,000 rooms in Makkah. However, there are no accurate statistics about the location of many of these hotels.
He said plans to develop the sector in Makkah are based on the directives of Prince Sultan bin Salman, president of the SCTA. These steps include encouraging international companies to invest and employ Saudis.
A hotel owner said earlier that Makkah hotels were forced to accept the 20 percent reduction in contracts this year.
According to sources in the hotel sector in Makkah, around 90 percent of the hotels are leased. Many investors have not been able to keep up payments to hotel owners and are seeking a mediated solution, especially those with long-term leases.