Makkah hotels see 40% decline due to drop in pilgrims, visitors

JEDDAH: Occupancy rates at hotels and furnished apartments in Makkah are no more than 60 percent in the central area around the Grand Mosque, and between 15 percent and 30 percent in other areas due to a sharp drop in the number of pilgrims and visitors.
Salem Al-Matrafi, an investor, says the number of hotel rooms in Makkah exceeds 250,000, but occupancy rates do not exceed 15 percent, noting that all hotels and housing for Umrah visitors are licensed by the General Authority for Tourism.
Abdullah Al-Omeiri, also an investor, says occupancy rates of furnished apartments from the start of the Umrah season until about one month ago reached 90 percent at hotels in the central region in Makkah, but this percentage has declined due to lack of issuance of visas from the Ministry of Haj. All units are licensed and provide top safety and security standards, however prices have decreased due to the declining occupancy rates compared to last year, he confirms.
As for problems facing the sector, he says the most notable challenge is the decline in the number of visas issued for Umrah and Haj, in addition to challenges brought on by Haj missions that rely on brokers and special agents, rather than allowing for rent to occur under the umbrella of the Ministry of Haj.
The chairman of the real estate committee at the Makkah Chamber of Commerce, Mansour bin Riyash, says the number of available rooms currently is 8,000 rooms for Haj housing, a number that is more than the number of pilgrims arriving in the Kingdom, especially after the reduction in pilgrims by 20 percent since 1432 AH. Current occupancy rates do not exceed 50 percent of available rooms, he says, noting that the issue does not lie in the certain conditions and controls for Haj housing, but rather in that the number of pilgrims arriving is far less than the size of the market.
As for services for housing of Umrah visitors, he says they are per the requests of Haj missions, and prices are set accordingly, with prices increasing or decreasing as per supply and demand and the proximity to the Grand Mosque and holy sites.
Regarding the increase in the number of rooms for Umrah visitors or pilgrims, he says he does not see any justification for the increase because the available rooms provide housing for about 2.2 million pilgrims, and any increase should be delayed until the number of pilgrims and visitors arriving increases.
He says the General Authority for Tourism and National Heritage, the real estate committee at the Chamber of Commerce and hotel owners are fulfilling their duties, but the numbers are not increasing, he said. As per approved plans at the Higher Committee for the Development of Makkah, the hope was that the number of pilgrims this year would reach around 2.4 million, but the numbers remain fixed at the rates in 1434 AH, he says.
Dr. Faisal Al-Sharif, head of the branch of the General Authority for Tourism and National Heritage, says the total number of licensed and classified accommodation facilities in Makkah amount to 893 facilities, including 491 operating hotels, 308 classified hotels, 72 operating housing units and 22 classified housing units. The total number of licensed hotels in Makkah is 780 hotels, of which 27 are five-star hotels, 104 are four-star hotels, 159 and three-star hotels, 97 are two-star hotels, and 491 are one-star hotels, he says. As for residential units, out of a total of 104 units, four are classified as 2rd grade units, 22 are classified as 3rd grade units, and 72 are classified as grade 1 or lower.

Al-Sharif says the number of hotel rooms is 157,868 rooms, which can absorb 1,894,632 Umrah visitors, while the number of residential units is 13,691 rooms that can absorb 164,328 Umrah visitors monthly. He confirms that the total number of rooms in hotels and residential units is 171,577 rooms, which can absorb a total of 1,058,960 Umrah visitors monthly.