Holy cities facing huge shortage in hospitality sector

14 June 2010

If travel patterns persist, Mecca and Medina will see almost 14 million tourists annually

The holy cities of Mecca and Medina will need 50,000 new hotel rooms by 2020, according to the latest report from US-based property analyst Jones Lang LaSalle (JLL).  

If current tourism patterns persist, the number of annual visitors to Saudi Arabia’s holy cities will reach almost 14 million by 2020. And the 70,000 hotel rooms currently on offer in Mecca and Medina – 59 per cent of the kingdom’s entire stock – promise to fall desperately short of demand.

Even planned developments in the two cities – Mecca’s Jabal al-Kaba, Abraaj al-Bait, Al-Shamiyah, Jabal Omar and Medina’s Knowledge Economic City (Kec) – will only add an estimated 35,000 rooms.

Together, the number of hotel rooms available in the two cities could reach as many as 105,000 by 2020.

But the JLL report predicts that Mecca alone, which currently has 50,000 available rooms, will need to increase that number by 32,000 by 2019.

Some of the planned projects in the cities also raise questions about whether they will be able to serve their intended purpose.

Mecca’s estimated $1.3bn Jabal Omar, which will reportedly include 40 hotels, is scheduled for completion in the last quarter of 2013. But recent reports show that financing of the project will only be finished in September of this year (MEED 21:5:10).

Moreover, Medina, which saw 7.7 million tourists in 2008 and currently offers 20,000 hotel rooms, is planning to make available just 3,000 additional rooms by 2013.

Medina’s highest profile project, the estimated $8bn Knowledge Economic City, includes housing for 150,000 people and scheduled for completion in 2020, but is planning just 3,000 hotel rooms.

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