Glen Carey and Mourad Haroutunian Mecca

THE BIGGEST religious gathering in the world is getting bigger for business.

The annual Hajj pilgrimage is spurring opportunities for companies such as the Saudi Binladin Group and Hilton Worldwide as the government in Saudi Arabia invests in new rail lines and airport expansions needed to meet the rising number of Muslim pilgrims to Islam’s two holiest cities.

“The arrivals we are seeing in 2010 are unprecedented in the history of Mecca,” said Shuja Zaidi, Hilton Worldwide’s vice-president of projects in Saudi Arabia. “Imagine the numbers when the transportation projects are completed.”

The Hajj, which started on Sunday, attracts more than 2.5 million Muslims from 160 countries to Saudi Arabia.

Saudi Arabia wants to develop its religious tourism industry as part of plans to diversify away from oil exports and to help reduce an unemployment rate as high as 43 percent for Saudis between the ages of 20 and 24.

The country plans to have 2 million tourism jobs within 10 years, up from 457 000, according to the Saudi Commission for Tourism and Antiquities.

Tourism revenue would grow 4.8 percent in 2010 to 66 billion riyal (R122.8bn) and rise to 118 billion riyal in 2015, data from the commission showed.

“There are a huge number of Muslims in the world, all of whom are required to perform Hajj once in their lives,” said Paul Gamble, head of research at Jadwa Investment in Riyadh.

“Tourism related to Hajj has the potential to be an important source of employment in the kingdom, so building the infrastructure to support this makes sense.”

A $5.3bn (R36.9bn) rail line linking the holy cities of Mecca and Medina with Jeddah was under construction and capacity at the Jeddah airport would rise to 30 million passengers by 2012 from the estimated 15 million this year, according to the General Authority of Civil Aviation.

Saudi Binladin won a 27.1 billion riyal contract to expand the King Abdulaziz International Airport in Jeddah, the official Saudi Press Agency reported on Sunday.

Hoteliers and property developers will spend as much as $40bn in Mecca within the next decade to meet rising demand for accommodation, Zaidi confirmed on Friday.

Accor, Europe’s largest hotelier, and Kingdom Holding, the investment company controlled by billionaire Prince Alwaleed, also have expansion plans.

“If you look at the infrastructure pipeline over the last several years, expanding facilities for religious tourism has been a big component of it,” NCB Capital chief economist Jarmo Kotilaine said yesterday.

King Abdulaziz Al Saud, the founder of Saudi Arabia, captured Mecca in 1924 and Medina in 1925 before officially establishing the kingdom in 1932. The two cities provided Al Saud with revenue from customs and religious taxes from visiting pilgrims and religious legitimacy as the ruler consolidated his power over the Arabian Peninsula.

The current monarch, King Abdullah, wants to make the economy less dependent on oil.

Saudi Arabia announced in August a $384bn, five-year spending plan, with the funds being spent on education, housing and transportation.

Tourism represented 3.6 percent of the kingdom’s gross domestic product (GDP) in 2009, with religious tourism accounting for as much as 1.5 percent of GDP, Gamble said.

Mecca needs 82 000 rooms with the number of pilgrims expected to double to 13.75 million by 2019, US-based Jones Lang Lasalle said in a report in June. There are 50 000 rooms in Mecca, or 40 percent of the kingdom’s room stock, and 20 000 in Medina, according to the Jones Lang Lasalle report.

Every devout Muslim who can afford it is supposed to perform a Hajj once in his or her lifetime. Many are struggling with the rising cost because of a dearth of rooms.

Egyptian Engi Nassar is spending 40 000 Egyptian pounds (R48 855) during her 11-day pilgrimage to Mecca and Medina, about half of what she would have paid had she not booked her own accommodation at the last minute.

“I handled the hotel on my own and got a special discount in Medina,” the general manager of Cairo-based Xpose Communications said earlier this month.

This year’s Hajj, which finishes this week, is set to beat 2009 in terms of pilgrim numbers, according to hoteliers and transport companies.

After obtaining a license in 2009, Saudi Alwafeer Air transported as many as 25 000 passengers during Hajj. This year, the number of passengers the company is expecting to lift is more than 60 000, according to Mohammad Bajaba, Alwafeer’s vice president of services.

The number of foreign pilgrims visiting Saudi Arabia to perform the Hajj in Mecca rose 11 percent to 1.8 million people this year, the Saudi Press Agency reported on Monday, citing Interior Minister Prince Nayef bin Abdualziz.

“Spending by pilgrims supports the consumption side of the economy,” said Saleh Al Suhaibani at Al Rajhi Capital. – Bloomberg