Companies involved in the hajj and umrah sector are expected to be active throughout the year as Makkah looks to achieve sustainability in all aspects, including financially, economically, and in human resources, Minister of Hajj and Umrah Mohammed Saleh Benten said on the second day of the Makkah Economic Forum 2019 on March 24.
“We are now in the golden era for the future of business. We aspire for sustainability in serving the guests of Allah. This is what we will see starting from next year,” said the minister.
The goal is to expand the scope of commercial activity in Makkah so that it is not only centred on the hajj season or Ramadan, Benten said.
He added that his ministry was working with several entities to achieve this, including the Makkah Region Development Authority and the Royal Commission for Makkah City & Holy Sites.
The minister said there was a misconception among businesses in Makkah, especially travel agents, that whoever gets involved with hajj will make easy gains – that they can earn quick profits and leave. “This idea needs to change,” he said.
Investors coming into Makkah will need to provide genuine services and look beyond seasonal work, and should have a roadmap for at least one or two years.
Speaking of the digital infrastructure underlying hajj and umrah, Benten said that while the ministry is the main point of contact for all pilgrims, the entire system involves more than 40 government agencies.
He said that one of the Vision 2030 goals was to facilitate the arrival of pilgrims to the kingdom. However, the current procedure for an individual to visit for hajj or umrah typically requires searching for an agency, handing over one’s passport to the embassy and a number of other steps.
“This part can be fully automated. Soon, we will announce instant electronic visas that will be issued after fulfilling all the requirements needed for performing hajj or umrah,” said Benten.
“If we look at Muslims around the world, those who can afford spending 15 to 20 days to obtain a visa are a limited category. We looked at the different segments in general and found that most people need to make decisions in a short period of time.”
Benten added that the ministry was soon going to launch a comprehensive “marketing platform” for all services available in Makkah as well as Madinah.
The platform, aimed at enhancing the pilgrim’s visit and the quality of services provided, will include hotels, accommodation providers, transportation options, and restaurants.
The adoption and development of tech- and digital-driven initiatives is driving one aspect of Makkah’s growth.
Over the past three years, the number of companies in Makkah province has grown by 24 percent and establishments by 14 percent, according to the Minister of Commerce and Investment Dr. Majid Bin Abdullah Al Qassabi. During this period, 259,994 commercial registers were issued to 39,423 companies and 220,571 establishments.
The Saudi Arabia General Investment Authority streamlined its processes in 2018 to support Vision 2030’s goal of increasing foreign direct investment from 3.8 percent to 5.7 percent of GDP. Investors can now process a new license in under four days instead of 53 days and renew a license in 30 minutes.
Makkah province ranks second after Riyadh in terms of total number of businesses, being home to 25 percent of total companies in the country and 23 percent of establishments.
“Makkah is a distinct region because of the high demand for housing due to population density. Nearly 8.5 million people live in Makkah,” Minister of Housing Majid Al-Hogail said during the economic forum.
In addition to being the fastest growing region in Saudi Arabia, Makkah is the only province that has three cities: Jeddah, Makkah, and Taif - a promising triangle with Vision 2030 and the goal to attract 30 million pilgrims, Al-Hogail said. He noted that most provinces in the kingdom have one city.
“We’re working with real estate developers on more than 53,000 housing units in Makkah Province. In terms of providing additional capacity, there is a lot of work being done with the Royal Commission for Makkah City & Holy Sites on infrastructure and the establishment of housing and districts that are not necessarily central, and on transportation that enables pilgrims to reach the Grand Mosque.”
With the economic movement in Makkah, Al-Hogail expects higher-than-average growth, driven from within the province and from other regions internally and externally. “We are working on initiatives that empower the private sector, which can be faster in keeping pace with this growth.”
According to Benten, one of the largely untapped opportunities in Makkah is the local manufacture of gift items and souvenirs. Pilgrims coming for hajj or umrah often buy gifts to take home, but these products, which include prayer mats, misbahas and fragrances, are rarely manufactured inside the kingdom.
This signals an opportunity for the manufacturing and retail sectors, he said.
“We have big factories for rugs which we can take advantage of, for example. Unfortunately, pilgrims leave with a large number of gifts with the label on them [showing they were not made in Saudi Arabia].”
The minister confirmed that work was ongoing to enable visitors to Makkah to travel around the province and elsewhere in Saudi Arabia.
With millions of pilgrims arriving in Makkah every year, many of whom have high purchasing power, the kingdom can capitalise on this opportunity for domestic tourism, which would increase hotel occupancy rates and benefit other sectors.
“We have finalised agreements with national carriers such as Saudi Arabian Airlines and Flynas. These airlines will have the ability to grant visas to people who meet the requirements, whether those looking for transit visas or those keen to spend time in the kingdom. These procedures took a great deal of effort and we are in the final stages of implementing them.”
Notable deals signed in Makkah’s religious tourism sector in the last three months
Agoda and Ministry of Hajj and Umrah
December 2018: Agoda and the Ministry of Hajj and Umrah signed an MoU to utilize Agoda’s technology, marketing platform capabilities, intelligence tools and resources, to support the kingdom’s vision to attract more than 30 million pilgrims by 2030. Agoda launched a new agoda.com/umrah for umrah pilgrims to access select hotels that have been certified by the ministry. The MoU was the first to be signed by the ministry with a global online travel agent.
|Oyo Hotels and Ministry of Hajj and Umrah|
January 2019: Indian hotel chain Oyo Hotels signed an MoU with Ministry of Hajj and Umrah to provide access to its technology that will help deliver a better hospitality experience to pilgrims. Oyo's OS technology suite will assist the ministry in managing inventory and procurement and will provide express check-ins and check-outs in accommodations. Under the agreement, Oyo will work on enhancing and auditing the standards for quality accommodations in Makkah, gradually upgrading more than 15,000 rooms. The hotel operator is one of the first Public Investment Fund of Saudi Arabia- and a SoftBank Vision Fund-backed company to start operating in Saudi Arabia. The company obtained its foreign investment license from SAGIA a few months ago and plans to invest $50 million in the kingdom.
|Huawei and Ministry of Hajj and Umrah|
February 2019: Chinese company Huawei signed an MoU with Ministry of Hajj and Umrah to develop smart technology. Under the agreement, the ministry will work with Huawei on smartphone app development, internet, and TV channels to raise the level of digital services and improve the experience of pilgrims. Smart Umrah technology will include digital transformation and infrastructure development, such as the construction of control rooms in Makkah and Madina’s pilgrim reception centres.
|Radisson Hospitality and Al Rajhi Investments|
February 2019: Radisson Hospitality signed two new hotels in Saudi Arabia: Makkah Al Rahma with 190 rooms, and Park Inn, Makkah Al Rahma with 150 rooms. Both hotels are scheduled to open in Q2, 2021. The new agreement extends an existing partnership with Saudi real estate company Al-Rajhi Investments.
|Mindsets and Mecca Region Development Authority||February 2019: Mecca Region Development Authority (MRDA) awards Mindsets, a member of the Beirut-based SETS Group, the contract to provide advisory services for MRDA. Under the agreement, Mindsets will help evaluate and prioritise projects and investment opportunities aligned with MRDA’s strategy for the Makkah region and Masha’er, among other areas of work|
(Reporting by Heba Hashem; Editing by Emmy Abdul Alim firstname.lastname@example.org)
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