Unpacking the Hajj dividend for Saudi Arabia’s travel and hospitality industries

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With pandemic restrictions imposed in 2020 fully lifted, a very large number of people were able to participate in Hajj this year, creating increased business opportunities for travel agencies, airlines and the hospitality industry in the Kingdom and the wider Gulf region. (SPA)
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With pandemic restrictions imposed in 2020 fully lifted, a very large number of people were able to participate in Hajj this year, creating increased business opportunities for travel agencies, airlines and the hospitality industry in the Kingdom and the wider Gulf region. (SPA)
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With pandemic restrictions imposed in 2020 fully lifted, a very large number of people were able to participate in Hajj this year, creating increased business opportunities for travel agencies, airlines and the hospitality industry in the Kingdom and the wider Gulf region. (SPA)
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Updated 01 July 2023
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Unpacking the Hajj dividend for Saudi Arabia’s travel and hospitality industries

  • When COVID-19 restrictions were imposed in 2020, just 10,000 pilgrims were permitted to travel to Makkah
  • With controls now lifted, 1.6 million people were free to take part, generating welcome business for airlines and hotels

DUBAI: Three years after the COVID-19 pandemic forced Saudi Arabia to impose strict travel restrictions, this year’s Hajj has given a palpable boost to the regional economy, with an estimated 1.6 million Muslims from around the world converging on Islam’s holiest sites.

The annual pilgrimage began on Sunday with the ritual of Tawaf Al-Qudum, when pilgrims dressed in white robes walk in a circle around the Kaaba, the stone structure at the center of Masjid Al-Haram, or the Grand Mosque, the most important mosque and holiest site in Islam.

With pandemic restrictions imposed in 2020 fully lifted, a very large number of people were able to participate in Hajj this year, creating increased business opportunities for travel agencies, airlines and the hospitality industry in the Kingdom and the wider Gulf region.




With the coronavirus emergency over, the annual pilgrimage is essentially back to normal. (SPA)

The number of pilgrims is significantly higher this year compared with the period during the pandemic. Only 10,000 people were permitted to participate in 2020, and about 59,000 in 2021, because of social-distancing rules.

Last year capacity was greatly increased but still capped at 1 million pilgrims. During that time authorities also imposed an age cap of 65 to protect older people, who were considered more vulnerable to the most severe symptoms associated with COVID-19.

Now, thanks to the success of the vaccines developed to combat the coronavirus and the lifting of travel bans and other restrictions, the annual pilgrimage is essentially back to normal and the Hajj economy is enjoying something of a post-pandemic rebound.

Through the combined efforts of the Kingdom’s flag carrier, Saudia, and budget airline flyadeal, more than 600,000 pilgrims were transported from domestic terminals to Hajj sites, Saudia Group said.




Saudia, the Kingdom’s flag carrier, and budget airline flyadeal combined transported more than 600,000 pilgrims from local airports to the holy sites this Hajj season. (SPA /File Photo)

The firm, which also operates Saudia Private Aviation in addition to Saudia and flyadeal, said it provided more than 1.2 million seats on its fleet of 164 aircraft, transporting pilgrims to and from more than 100 regular and 14 seasonal destinations, including Jeddah, Riyadh, Dammam, Madinah, Taif and Yanbu.

Just before Eid Al-Adha, the UAE’s flag carrier, Emirates, also added extra flights to cater to an increase in travelers. Ten flights to and from Jeddah, all operated using Boeing 777 aircraft, were added to accommodate Hajj pilgrims until July 7.

These extra Hajj flights were in addition to Emirates’ existing scheduled services to Saudi Arabia and were available to all travelers holding a valid Hajj visa. All passengers over the age of 12 were required to be vaccinated against COVID-19.

Emirates said there had been an increase in bookings for Hajj travel from Pakistan, India, Bangladesh, Indonesia, Thailand, Senegal, Ivory Coast, Mauritius and South Africa. The airline also added 34 flights to popular vacation destinations during the six-day Eid Al-Adha holiday.

Meanwhile, hotels in Makkah were fully booked as hundreds of thousands of Muslims descended on the holy city for Hajj.

“The hotel occupancy rates in Makkah have reached 100 percent, such as at the Novotel Thakher Makkah Hotel,” Abdul Aziz Al-Aboudi, the CEO of Thakher Development Company, a real estate firm that focuses on the hospitality sector, told Arab News.

“This substantial increase in occupancy comes in contrast to the 80 percent rate observed during the last Ramadan.”




Hotels in Makkah were fully booked as hundreds of thousands of Muslims from the 2.5 million pilgrims who descended on the holy city for Hajj. (SPA)

In 2022, the occupancy rate was 60 percent, he added.

According to global property consultancy CBRE, occupancy levels in Makkah and Madinah increased by 21.2 percent and 18.5 percent respectively during the first quarter of 2023 compared with the same period the previous year. It attributed this increase to the lifting of travel restrictions and the beginning of Ramadan.

Al-Aboudi said the increase in visitor numbers had generated new business opportunities for the construction and real estate industries. His own company recently opened the Park Inn by Radisson and has obtained the necessary Hajj license for its operation, he added.

The annual pilgrimage is also a source of income for smaller businesses, including those who provide lodgings, transport and gifts. The increased footfall this year has meant higher prices.

IN NUMBERS

10,000 Pilgrims permitted to perform Hajj under pandemic rules in 2020.

59,000 Number of pilgrims permitted in 2021 after easing of travel bans.

1 million Cap on the number of pilgrims performing Hajj in 2022.

1.6 million Estimated turnout for the Hajj pilgrimage in 2023.

According to official data for 2019, the Kingdom generated approximately $12 billion in income from the 2.5 million pilgrims who came to Makkah and Madinah for Hajj that year, and the 19 million who visited for Umrah, another Islamic pilgrimage that can be undertaken at any time of the year.

“Religious tourism is the backbone of Saudi Arabia’s tourism and it will play a wider role in the future as well,” Turab Saleem, head of hospitality, tourism and leisure consultancy at Knight Frank, told Arab News.

“Madinah is increasing its inventory from 18,000 hotel rooms at present to 125,000 by 2030. Makkah as well is increasing its occupancy. Makkah will have more rooms than any other city in the entire Middle East, including Dubai. Both Makkah and Madinah will also play a key role in elevating religious tourism to a new level.”




Madinah's shopping centers and hotels are once again seeing a surge in customers since the lifting of pandemic restrictions. (SPA)

Hajj, underlines Saleem, plays a key role in Saudi Arabia’s tourism market.

He also points out how the economy for an increase in hotel rooms is not as challenging is the need to enhance the infrastructure to cater to the increase in Hajj pilgrims and expansion this year of the Hajj economy.

“Saudi is also observing how religious tourism can convert into leisure tourism,” he added.

“If someone or a family comes for a short tour then they can also take a trip to the Red Sea, AlUla or Riyadh.”

Airlines will also play a big role, adds Saleem. The new airline Saudi Arabia is launching, Riyadh Air will travel to over 212 destinations globally.

“It will do wonders for the country in terms of tourism, both religious and leisure,” he said.




Places as far as Jizan are expected to benefit from an influx of visitors as the Kingdom's religious tourism program goes in full swing. (SPA)

According to TV news channel Al Arabiya, in the weeks prior to Eid Al-Adha, Saudi authorities unveiled their largest-ever operational plan for Hajj season, for which they employed a record-breaking 14,000 staff and more than 8,000 volunteers, who were deployed on the ground to provide assistance for pilgrims.

Abdulrahman Al-Sudais, president of the General Presidency for the Affairs of the Two Holy Mosques, said: “The operational plan for this year’s Hajj season is the largest in the history of the presidency, after the end of the coronavirus pandemic and the announcement of the return of Hajj pilgrims in the millions, as per an integrated system of services prepared by the wise leadership.”

Since Vision 2030, the Kingdom’s development and diversification plan, was launched by Crown Prince Mohammed bin Salman in 2016, Saudi authorities have spent billions of dollars on efforts to make Hajj, the world’s biggest religious gathering, more secure, more accessible, and an easier and more streamlined experience.

Another aim of Vision 2030 is to increase Hajj and Umrah capacity to 30 million pilgrims each year, to the benefit not only of the local economy but to international businesses operating in Saudi Arabia.

Performing Hajj can cost upward of $5,000 a person. It is one of the Five Pillars of Islam and every Muslim who is physically able and can afford it is obliged to participate at least once in their life.

 


Aramco, TotalEnergies and Saudi Investment Recycling Company to explore sustainable aviation fuel plant

Updated 50 min 38 sec ago
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Aramco, TotalEnergies and Saudi Investment Recycling Company to explore sustainable aviation fuel plant

  • The firms have entered into a Joint Development and Cost Sharing Agreement

DHAHRAN: Saudi Aramco and the Saudi Investment Recycling Company, or SIRC, have partnered with French firm TotalEnergies to assess developing a sustainable aviation fuel plant in Saudi Arabia’s Eastern Province, it was announced on Tuesday.

The firms have entered into a Joint Development and Cost Sharing Agreement.

“With demand for air travel forecast to grow, it’s becoming imperative to address aviation emissions through lower-carbon alternatives. This is where major global energy companies like Aramco and TotalEnergies can play a part, by collaborating to help meet this need,” said Amin Nasser, Aramco president and CEO.

“Addressing transport emissions requires a wide range of approaches and Aramco is pursuing a number of potential innovative solutions, as we seek opportunities to contribute to global emissions reduction efforts.

“We already have a well-established partnership with TotalEnergies and this new collaboration demonstrates our intent to explore ways to leverage our combined strengths, in this case with a view to establishing a SAF plant in the Kingdom with SIRC. As Saudi Arabia’s tourism and aviation sectors expand, this could potentially benefit both domestic and international airlines,” he added.

The project would aim to recycle local waste, such as used cooking oils and animal fats, to produce SAF, advancing Saudi Arabia’s Vision 2030 sustainability goals.

Announced during French President Emmanuel Macron’s state visit to the Kingdom, the initiative is the latest in increasing Saudi-French collaboration on clean energy.

Patrick Pouyanne, chairman and chief executive officer at TotalEnergies, said: “We are delighted to partner with Aramco and SIRC to study the production of SAF in the Kingdom. By leveraging our expertise, we can take a further step toward the decarbonization of air transport together. SAF is at the heart of our company’s transition strategy, as we strive to meet the aviation industry’s demand to reduce its carbon footprint.”

Further details will follow pending feasibility studies.

SIRC chief, Ziad Al-Sheha, added: “In keeping with our commitment to supporting the ambitious sustainability objectives of Vision 2030 and the Saudi Green Initiative, we have a keen focus on increasing waste conversion rates into renewable resources.”

“The new partnership to assess the feasibility of a renewable aviation fuels plant signifies a major leap forward in our mission; we also believe it will enrich and energize our efforts to lead the development of the Kingdom’s circular economy,” he said.


Saudi Green Initiative unveils $60m in new environmental projects at COP16

Updated 03 December 2024
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Saudi Green Initiative unveils $60m in new environmental projects at COP16

RIYADH: The fourth Saudi Green Initiative Forum began on Tuesday with the launch of five new groundbreaking environmental projects, valued at SR225 million ($60 million).

This announcement marks a significant step forward in Saudi Arabia’s ambitious environmental strategy, bringing the total investment in SGI initiatives to over $188 billion.

The new initiatives align with Saudi Arabia’s commitment to tackling climate challenges, focusing on reducing emissions, combating desertification, and preserving the Kingdom’s natural ecosystems. The announcement coincides with the 16th Conference of the Parties to the UN Convention to Combat Desertification, being held in Riyadh, and underscores Saudi Arabia’s growing leadership in global environmental efforts.

With 86 ongoing initiatives, the SGI is central to the Kingdom’s long-term vision of creating a more sustainable future. The program is focused on reducing emissions by 278 million tonnes annually and achieving net-zero emissions by 2060.

Saudi Arabia is also making significant strides toward its renewable energy targets, including plans to generate 50 percent of its electricity from renewable sources by 2030.

Since 2021, the Kingdom has planted over 100 million trees and rehabilitated 118,000 hectares of degraded land. By 2030, Saudi Arabia aims to restore 8 million hectares of land as part of its commitment to environmental regeneration.

The five new initiatives, led by Ma’aden, the Morooj Foundation in partnership with the private sector, and Tanmiah Food Co., will bolster efforts in afforestation, biodiversity conservation, and land rehabilitation. These projects are expected to plant millions of trees and mangroves, scatter 300 million seeds, and help reduce air pollution across the country.

According to a press release, these initiatives align with the broader Saudi Green Initiative goals, including the protection of 30 percent of the Kingdom’s land and marine areas by 2030.

Other notable conservation achievements include the successful rewilding of endangered species, such as the recent birth of four cheetah cubs — the first in Saudi Arabia in over 40 years — under the National Cheetah Conservation Strategy, it added

The continued focus on environmental restoration is integral to Saudi Arabia’s broader vision of safeguarding its natural resources and biodiversity for future generations.


Airbus opens regional headquarters in Riyadh

Updated 03 December 2024
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Airbus opens regional headquarters in Riyadh

RIYADH: Airbus has officially opened its new Regional Headquarters in Riyadh, reinforcing its long-term commitment to Saudi Arabia and the broader Middle East.

This expansion marks a key milestone in Airbus’ efforts to enhance its commercial, defense, space, and helicopter operations in the Kingdom and the region.

The new HQ highlights Airbus’ growing involvement in Saudi Arabia’s aviation and aerospace sectors, where the company has been active since the 1970s. Airbus currently employs over 350 people in Saudi Arabia, with 30 percent of its workforce being Saudi nationals. The company aims to further boost local talent development and technological expertise.

This move aligns with Saudi Arabia’s regional headquarters program, which offers incentives such as a 30-year corporate income tax exemption, withholding tax immunity, and various support services for businesses.

Eid Al-Qahtani has been appointed as the president of Airbus’ Riyadh-based regional headquarters. With more than 20 years of leadership experience — including his previous role as head of operations for Airbus Helicopters in Riyadh — Al-Qahtani will focus on strengthening partnerships with governments and stakeholders, as well as driving new business in the region.

Wouter Van Wersch, president of Airbus International, praised the appointment: “We are privileged to have Eid Al-Qahtani leading our operations in Saudi Arabia. His deep understanding of the country's goals and his proven leadership in the region make him the ideal person for this role.”

Earlier this year, Airbus signed an Industrial Participation agreement with Saudi Arabia’s General Authority for Military Industries, supporting the Kingdom’s Vision 2030 objectives.

This collaboration includes technology transfers and initiatives for industrial localization, such as SAMI Airbus Aircraft Maintenance Services — a joint venture between Saudi Arabian Military Industries and Airbus.

Al-Qahtani expressed his enthusiasm: “I am honored to lead Airbus from our new headquarters in Riyadh. Saudi Arabia is a strategically important market for us, and we are committed to supporting the Kingdom’s long-term goals while nurturing the next generation of aerospace leaders.”

Saudi Arabia’s efforts to attract international businesses are paying off. The Kingdom has already surpassed its 2030 target of 500 regional headquarters, with 540 international companies now established in Riyadh, according to Minister of Investment Khalid Al-Falih.

“Investors are coming not only for our vibrant market but also to explore the broader region,” he said.


Saudi Arabia a key player in global energy transition, says IRENA chief

Updated 03 December 2024
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Saudi Arabia a key player in global energy transition, says IRENA chief

RIYADH: Saudi Arabia is set to deepen its collaboration with the International Renewable Energy Agency to advance sustainability initiatives, according to a senior official. 

Speaking to Arab News on the sidelines of the UN Convention to Combat Desertification COP16, Francesco La Camera, director-general of IRENA, stated that Saudi Arabia is a key leader in transitioning away from fossil fuels, thanks to the Kingdom’s Green Initiative. 

He also highlighted global progress in renewable energy, noting that last year saw a record increase in capacity, driven by advancements in green hydrogen and sustainable biomass.

“We are working on signing an agreement with the GCC countries, so we will see when we will be ready. We will announce that we are working more closely with Saudi Arabia on our topics and our area of interest,” La Camera said. 

He added: “Just to give you an example now, ACWA Power is a Saudi company, but it is the elite company for decentralization. They invest in 12 different countries, and this is something amazing, and this is an effort also outside the country to work for the energy transition, providing water in a country that stresses all this.” 

The IRENA director-general stressed the importance of all nations, including Saudi Arabia, to increase efforts, with the expectation that updated national climate contributions will be submitted before February 2025. 

“Everyone has to do more, so we expect to see also the national climate contribution to be presented before February 2025. We also hope that our presence at COP will allow us to have more discussion and to increase the level of engagement of Saudi in the work of IRENA,” La Camera said. 

He added: “We think that, inevitably, Saudi is a leading country on all of this. It has the potential. It has the resources. It has the leadership to go faster and scale in the energy transition.” 

La Camera also outlined a strategy to address the structural challenges hindering the deployment of renewable energy at the speed and scale required to meet global energy and climate goals. 

The focus is on overcoming infrastructure barriers by creating interconnected, flexible, and balanced grids that can support a higher integration of renewable energy. 

This is where regional collaboration comes in, which is essential to achieving this objective. 

“I emphasize the role of the infrastructure. We need groups that are interconnected, flexible, and balanced to allow more renewables. Regional collaboration is crucial,” La Camera said. 

During his keynote speech at the Saudi Green Initiative, La Camera spoke about the need to design the market in a way that is more favorable for renewables. 

“We need to strengthen the capacity of the distribution to deal with this through a system that is more distributed instead of centralized, and also the need to reskill the personnel that is moving from the fossil fuel to the renewable area,” he said. 

La Camera concluded the interview by highlighting IRENA’s long-term planning efforts, which are essential for aligning financial investments with the needs of the renewable energy sector. 


Land degradation driving global instability and forced migration, warns Saudi envoy at COP16

Updated 03 December 2024
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Land degradation driving global instability and forced migration, warns Saudi envoy at COP16

RIYADH: Forced migration due to land degradation is a global challenge that needs to be tackled, according to Saudi Arabia’s climate envoy. 

Taking center stage at COP16 in Riyadh, Adel Al-Jubeir described the phenomenon as a driving force behind security crises, highlighting food, air quality, and biodiversity as areas of concern. 

Addressing delegates, Al-Jubeir painted a stark picture of the cascading impacts of degraded land, calling for unified global action to halt the alarming trend.

“Land degradation impacts every single human being,” he said, linking the loss of productive land to the displacement of millions and the destabilization of entire regions. “When people cannot grow food, they migrate. This migration often leads to tension and conflict in the receiving areas, creating a cycle of dislocation and violence.” 

The figures are sobering, with 100 million hectares of land lost annually — an area the size of Egypt — while the global population continues to rise, intensifying pressure on diminishing resources.

Al-Jubeir emphasized that addressing land degradation is a matter of environmental urgency and a cornerstone of global security. “This is an issue that touches every aspect of our lives — food security, national security, migration, air quality, and biodiversity,” he said, urging nations to collaborate on solutions to reverse degradation and restore the Earth’s ability to absorb carbon.

The discussion was further elevated by Ibrahim Thiaw, executive secretary of the UN Convention to Combat Desertification, whose address highlighted the profound human toll of land degradation.

“People do not migrate because they want to; they do so because they have no choice,” he said, he described how the loss of fertile land compels millions to flee their homes. 

Thiaw drew a direct line between environmental degradation and global displacement trends, citing data showing that up to 7 billion people could be affected by droughts by 2050. He linked 40 percent of interstate conflicts to disputes over natural resources, underscoring the link between environmental collapse and geopolitical instability.

His solution was clear and direct: land restoration. “Investing in land restoration is investing in keeping people safe at home,” Thiaw said, adding: “It is about giving them the dignity to produce food, educate their children, and live securely without being forced to migrate.” 

He called on global leaders to prioritize sustainable agricultural practices and ecological restoration, noting that these investments could break the cycles of forced migration and conflict.

The intersection of environmental sustainability, migration, and security presented at COP16 has underscored the need for urgent, united action. 

With Saudi Arabia championing this agenda on the global stage, and as negotiations proceed over the course of the next two weeks, the focus now shifts to translating bold commitments into tangible outcomes that safeguard communities and ecosystems worldwide.