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Makkah hotel prices dive 150%

“The decline in occupancy rates of rooms this year is 15 to 20 percent."

Source : Arab news / 15 Jul 2013

A tourism official in Makkah has confirmed that the prices of hotels have undergone radical change and returned to their normal rates.

“We have witnessed a 150-percent decline in both the prices of hotels around the Grand Mosque and suites with direct views of the Kaaba,” said Fahad Al-Wethyiani, head of the Hotels and Tourism Committee at the Makkah Chamber of Commerce and Industry.

Development projects around the Grand Mosque will lead to the construction of massive hotels with tens of thousands of new rooms, he said, adding that these hotels will set the actual prices of hotels in the holy city.

“The decline in occupancy rates of rooms this year is 15 to 20 percent. Investors are now offering rooms at lower prices to the local market to muster a higher percentage of occupancy,” he said.

Al-Wethyiani said that the prices of hotels are now becoming low after many years, adding that foreign tourism companies and representatives of Haj service providers played a major role in creating a speculative market on the prices of hotels.

“The prices used to be more than SR180,000 for a suite with a view of the Kaaba during the last ten days of Ramadan,” he said, adding that the price has now decreased to SR70,000 for the entire month. “This represents a 150 percent decline,” he said.

He said: “Although there are fewer pilgrims this year, which has resulted in less profitability, I personally welcome the decision.” He added that this is not a personal issue, as development projects implemented by the Saudi government will benefit Muslims across the world, as well as Saudi Arabia’s private sector.

Saudi Arabia has so far spent SR100 billion to develop Makkah into a modern city with improved services to meet the needs of millions of pilgrims.

Development projects in the area of the Grand Mosque have culminated in a considerable number of construction and hotel projects, such as the Jabal Omar project, which will lead to the construction of two hotels every six months. “These will contribute to price stability and limit speculation on prices that led to the rise in prices witnessed in the past,” he said.

Hafez Al-Juhani, vice chairman of the Advisory Committee of the Saudi Commission for Tourism and Antiquities, agreed that prices have been high.“There is a drive to lower the prices of hotels between 20 and 50 percent,” he said.

“The number of visas has been reduced from 1.5 million to 500,000 because of the development projects. This has forced hotels to reduce prices,” said Al-Juhani, adding that the sector is expecting losses this year, something that has propelled the restructuring of plans and prices to attract local and Gulf pilgrims.

Saad Al-Qurashi estimated the losses to be SR450 million, according to surveys conducted during Shaban and Ramadan. “It is projected that losses will reach SR700 million in the Haj season,” he said, adding that these figures are not yet official.

He also said that the price of hotels came down 50 to 60 percent to attract domestic and GCC pilgrims who do not require visas.


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