MAKKAH — Occupancy rates in hotels and buildings in Makkah have dropped by about an unprecedented 40 percent this Haj season, realtors and investors have said. They attributed the sharp decrease in occupancy to the 20 percent cut in the number of foreign pilgrims and also to the construction of a large number of buildings and residential towers approved without proper feasibility studies. Investors and hoteliers expect more than 125,000 hotel rooms to remain vacant during the entire Haj season unless they decide to accept very low rates. Investors and hoteliers accused Haj missions and foreign tourist companies of tampering with the market to obtain financial commissions. They said these companies took advantage of the decision to reduce the number of foreign pilgrims to revoke their contracts with the hotels without being questioned by any government or private bodies. Former chairman of the committee on tourism and hotels in the Makkah Chamber of Commerce and Industry Walid Abu Sabah said contrary to what government officials have been indicating, investors have incurred huge losses amounting to more than SR200 million. "Investments in the hotel sector in Makkah, which were more than SR100 billions have sharply dropped due to the 20 percent cut in the number of theforeign pilgrims," he said. According to Abu Sabah a large number of investors and hotel owners have reduced their rent by more than 50 percent. “As many as 125,000 hotel rooms will remain vacant during the Haj season," he added. He recalled that the Makkah Municipality had licensed about 6,000 buildings to accommodate pilgrims and said this has increased supply over demand. Abu Sabha said in view of the enormous reduction in rent, a number of Haj missions and foreign tourist companies have rescinded their contracts earlier signed with the hotels to accommodate their pilgrims. "Accordingly, investors and hotel owners have suffered immense financial losses," he added. He called for the formation of a neutral committee comprising government and private representatives to assess the financial damage done to buildings and hotels. Saeed Jameel Al-Qurashi, member of the board of directors of the Makkah Chamber of Commerce and Industry, said with the rapid expansion of accommodation projects in Makkah, supply has surpassed demand. The cost of accommodating a pilgrim in Al-Aziziyah District, which is close to Mina, has dropped to less than SR1,500 from about SR5,000 two years ago.
