Hotels in Mecca are cutting room rates for stays after Ramadan as a reduction in pilgrim quotas and concerns about the Mers virus hit visitor numbers.
Saudi Arabia is expected to issue a similar number of visas for Haj pilgrims as last year as it continues renovation work on the Grand Mosque.
Last year, 1.3 million international pilgrims and 600,718 domestic pilgrims performed Haj, down from 1.7 million and 1.4 million respectively in 2012.
The Haj dates this year fall between October 3 and 9, but the season extends between September 20 to October 15.
In the kingdom, 282 people have died from Middle East respiratory syndrome, or Mers, since it was first detected in September 2012, according to a health ministry survey announced last month. As of last week, the number of confirmed cases was 688.
Tour operators expect about 1.5 million international and domestic pilgrims this year.
Haj quota cuts and fear of Mers have had a strong negative effect on the tourism industry, primarily affecting the religious cities of Mecca and Medina, and to a lesser extent the Red Sea city of Jeddah, said Rashid Aboobacker, a senior consultant with TRI Hospitality Consulting.
“Some of the luxury hotels are reporting a further decline in demand from independent travellers, such as wealthy individuals, this year presumably due to the Mers virus scare, which hit the country earlier during the year,” he said. “This year, hoteliers in Mecca are expecting further pressure. Although tourism operators had projected huge potential losses due to the government visa cuts, we believe the effect may have been lower due to the increase in Umrah visas during the off-peak periods,” Mr Aboobacker said.
During the first five months of the year, average room rates in Mecca were down by 10 per cent to 15 per cent compared with the same period last year, according to TRI data.
Haj quota cuts have resulted in significant losses, according to Khalid Saad Al Kalashany, the revenue manager of Mawasim Tours. The Mecca-based company organises Haj and Umrah tours.
“We sell the rooms for very low prices and we still have a lot of rooms empty that are not bought,” he said. “This year is poor, so we have had around 90,000 [Haj and Umrah] pilgrims.” That is down from 150,000 pilgrims last year for the operator.
Mers fears have also kept away pilgrims, especially those in the luxury category, he said
At the 700-room Mecca Hilton, rooms are available for 600 riyals (Dh587) at the beginning of September. The same rooms start at 1,950 riyals in October.
“There are a number of international and local chains of hotels that market competitive rates to attract business,” said Mahmoud Mokhtar, Hilton’s vice president of operations for Saudi Arabia.
Saudi Arabia had 35,587 rooms under development last month, which would eventually increase its overall room count by 60 per cent, says the consultancy STR Global.
International arrivals are expected to recover in 2016 when infrastructure improvements are completed, Mr Mokhtar said.
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