In line with the expansion currently underway at the Holy Mosque in Mecca, real estate investors expect the number of hotel rooms in the Holy City to exceed 160,000 by the end of this year (2015), noting that the room occupancy rate on regular days reaches 65% and rises to more than 95% during peak seasons. Sources report that this year’s pilgrims occupied more than 155 hotel rooms, accommodating over 800,000 pilgrims.
Furthermore, a number of real estate professionals and experts denied that the demolitions of properties near the Grand Mosque would affect the supply of lodging facilities. Khalid Al-Hassawi, an investor in the hotel sector, confirmed that the demolitions taking place in the central area have not affected the supply of lodging facilities, as the demolished buildings were mostly pilgrim housing and a limited number of hotels; in contrast, massive new buildings are now in operation with a capacity exceeding that of the demolished structures.
Regarding the decline in pilgrim numbers this year, Al-Hassawi noted that the impact is possible but varies from facility to facility; facilities that operated efficiently during the last Umrah season were not affected, as it was an exceptional season, and he expects the upcoming Umrah season to be much better than in previous years, given the coordination with officials at the Ministry of Hajj and the increasing capacity of accommodation facilities in the coming years.
A number of economic analysts and observers have predicted an increase in investment returns in the hotel and residential apartment sectors due to rising demand for hotel accommodations in Makkah, The current expansion of the Grand Mosque area will create greater investment opportunities, which means increased capacity in Makkah’s accommodation sector to meet the growing demand for hotel stays in upcoming seasons, especially given the anticipated rise in the number of visitors to Makkah, including pilgrims performing Hajj and Umrah, particularly after the completion of Makkah’s development projects, including the expansion of the Grand Mosque and transportation projects.
Given the limited space in the central area, investors and real estate developers have turned their attention to areas surrounding or near the central area, including the Ijaba area, which has become attractive to investors in residential and hotel projects due to its proximity to the holy sites and easy access via the ring roads, making it a preferred choice for many pilgrims and Umrah performers from both inside and outside the Kingdom.
