Saudi Arabia is desperate for its travelers to stay beyond religious duties
SAUDI ARABIA, which has been trying to wean the economy off oil, is actively trying to grow its leisure tourism sector as most tourism in the desert country involves religious pilgrimages.
The holy city of Mecca is largely responsible for Saudi Arabia’s tourism industry, receiving over three million pilgrims a year during the month of Dhu al-Hijjah in Hajj and around two million during the month of Ramadan in Umrah.
Saudi Arabia received 19 million international tourist arrivals last year.
While the numbers are great, it pales in comparison with the United Arab Emirates (UAE), home to the bustling Dubai and Abu Dhabi cities.
The UAE saw 20.7 million international tourist arrivals in 2017.
Of course, a couple of implementations and improvements have been put in place to entice leisure tourists including lifting its 35-year cinema ban, naming 25 new archaeological sites across the country, and issuing tourist visas for the first time (including for lone women).
Additionally, Saudi Arabia is planning to develop miles of unspoiled coastline on both the Red Sea and the Gulf Peninsula into new tourist hotspots as well. In particular, it wants to turn 50 Red Sea islands into luxury tourism resorts and build an entertainment capital to rival that of Las Vegas.
Efforts to push pilgrim travelers to stay beyond religious duties in Mecca are also in place to boost the number of international pilgrims to 30 million per year by 2030.
Last year, spending by pilgrims during the five-day Hajj season alone totaled at reached US$4.2 million, according to a research report cited in Asharq Al-Awsat. It is expected to reach US$5.6 billion by 2022.
However, 77 percent of Mecca’s retail supply is fragmented, comprising traditional souqs and line shops, while the remaining 23 percent are showrooms and shopping malls.
Because Mecca is under-served by malls due to a shortage of plots and high costs, many potential spenders up and leave as soon as their religious duties are over, opting instead to head to the nearby Jeddah.
Having identified the opportunity, the government, together with Saudi Arabia’s developers and retailers, are now aiming to triple Mecca’s shopping mall space by 2025.
Mecca’s shopping mall space is now expected to grow to 8.7 million square feet.
Jabal Omar Development Co., one of the largest real estate developers in the region, is already building homes and malls, and a project near the Grand Mosque that will include 38 hotels and some of the country’s largest malls.
Some of the world’s biggest hotels have also opened up or are under construction in Mecca, such as InterContinental, Hilton, Movenpick, Sheraton, Hyatt, and more. These are intended to fuel the holy city’s leisure tourism sector.
Meanwhile, Jabal Omar Development Co. chief executive officer Yasser Al-Sharif told a conference in Riyadh last year that revenue from pilgrims could rival and even exceed Saudi Arabia’s vast oil returns in the long term.
Oil is a commodity that can be substituted, he said, “pilgrimage is not.”