The GCC’s booming religious tourism industry

Each year, for a handful of days in the middle of the last month of the Islamic calendar, millions of Muslims descend on Islam’s holiest city Makkah to fulfil one of the religion’s five pillars – obligatory for every physically and financially able Muslim man and woman at least once in their lives.

The month of Dhu al-Hijjah lends its name to the Hajj pilgrimage, which last year drew 2.4 million people to the birthplace of Prophet Muhammad (PBUH) to perform the series of rituals centred on the ancient city, the Masjid al-Haram and its unmistakable focal point, the Kaaba.

Arduous though it is, the spiritual rewards described in the Qur’an and Hadith are enormous for those who undertake the Hajj; and perhaps in keeping with the mercantile history of Makkah, there are today also huge economic rewards on offer as a result of the massive annual influx of visitors to the kingdom of Saudi Arabia.

The beating heart of the GCC’s religious tourism sector, Hajj and Umrah (which is a similar pilgrimage to Hajj but can be performed at any time of the year) are reported to bring in around $12bn in revenues – part of a wider tourism sector contribution of $22.6bn. The annual revenue of Hajj season alone is estimated at up to $6bn, with the pilgrimages contributing 20 per cent of the kingdom’s non-oil GDP and 7 per cent of total GDP.

With around 1.75 million of last year’s 2.4 million pilgrims arriving from some 168 countries abroad, it’s little surprise that this revenue comes largely from accommodation, gifts, food, travel and transport, tour operators and more.

And with Vision 2030 looking to boost the kingdom’s non-oil economy, Hajj and Umrah are in line to become an even more lucrative source of income for the country.

The vision aims to draw six million pilgrims to Hajj each year, as well as 30 million to Umrah. In May, Saudi’s minister of Hajj and Umrah Mohammed Salah bin Taher Benten highlighted the kingdom’s intent to invest in this ambition with plans to provide pilgrims with high quality services, electronic portals and new facilities for people of determination.

More than 80 government entities are coming together to bring these plans to fruition.

Last year, the Public Investment Fund (PIF) announced its plans for Rou’a Al Haram – a development company set to increase capacity for pilgrims and visitors to the Grand Mosque. The areas around the mosque, other holy sites in Makkah, the quality of services in the local hospitality sector and related commercial opportunities are all in line for special attention, with phase one of the development promising 115 new buildings, 70,000 extra hotel rooms, 9,000 residential units and 360,000 square metres of commercial space.

Rou’a Al Haram’s projects are set to generate new investment opportunities and create around 160,000 jobs by 2030, with an estimated annual GDP contribution of $2bn.

They could also help revive the city’s real estate market after softening of rents and sales prices in recent months, according to real estate company JLL.

“With the latest mega project being announced late last year, the Makkah market is likely to witness increased investment across all real estate sectors over the rest of 2018 and beyond,” says JLL’s head of research for MENA, Craig Plumb.

The economic reasons behind improving the Hajj and Umrah experience, and widening their capacity, are clear. More people with greater and easier spending opportunities will surely mean a spike in revenues. Indeed, according to Muhsin Al Sharif of the Committee of Real Estate and Investment, the growing demand for Hajj and Umrah combined with transport costs, retail spending and an increase in SMEs related to pilgrimage services could see revenues reach $150bn by 2020.

From flights to hotel stays, visa processing to eating out, there are many financial benefits to an increase in visitor numbers. Hotel costs routinely stand at more than $6,000, Hajj visas for return pilgrims are now more than $500, and thousands of shops will vie for attention as more people look to take away gifts and souvenirs.

This vast economic potential does not stop at Makkah, of course. As the closest transport hub, Jeddah – which held the soft launch of King Abdulaziz International Airport’s $7.2bn expansion in May – also enjoys the annual Hajj boom, and with the high-speed Haramain railway linking Makkah and Madinah via Jeddah, the benefits are extending out to other parts of the country. To prove this point, the new Al Faisaliah City project, which will run from the edge of Makkah out to the Red Sea, aims to attract 10 million annual visitors by 2050 – many of whom will be drawn by its proposed Islamic research centres.

The city of Madinah is another important stop for Muslim travellers keen to visit Al Masjid An-Nabawi (The Prophet’s Mosque) and other important sites from Islam’s earliest history. The new railway line will be instrumental in increasing the number of tourists to the city, bringing with them additional revenue.

Outside Saudi Arabia, the region’s most well known religious tourism destination is surely the Sheikh Zayed Grand Mosque in Abu Dhabi, which in 2017 attracted almost 5.8 million visitors – up from 5.2 million the previous year.

Its popularity is cemented by the fact that in 2017 travellers ranked it as the world’s second favourite landmark, according to TripAdvisor – behind Angkor Wat in Siem Reap, Cambodia. In 2016 it trailed to Machu Picchu in Peru, but both times outranked the likes of the Taj Mahal in India, Paris’s Eiffel Tower, and St Peter’s Basilica within Rome’s Vatican City.

As well as being visited by some of the world’s best known celebrities and public figures – singer Rihanna, Formula One champion Lewis Hamilton, and Queen Elizabeth II among them – practitioners of various faiths have either worshipped or toured the stunning mosque, benefitting the wider economy of the UAE’s capital city through hotel stays, retail spending and trips to other tourist attractions – not to mention employment opportunities.

Similarly, Sharjah’s Museum of Islamic Civilization is helping to drive tourism in the emirate, while across the border in Oman; the former religious centre Nizwa attracts a steady stream of tourists. Indeed, numbers are expected to increase in the coming months, with the Ministry of Tourism and developers Omran seeking to turn the 17th century Nizwa Fort into a leading tourism hotspot – one of many such projects across the sultanate.

Slightly more leftfield, Abu Dhabi may also soon be receiving tourists thanks to the Louvre Abu Dhabi’s highly anticipated showing of Leonardo Da Vinci’s $450m masterpiece, Salvator Mundi (‘Saviour of the World’) – a depiction of Jesus Christ dating from around 1500.

Read: World’s most expensive painting coming to Louvre Abu Dhabi in September

Speaking last year, shortly after the record-breaking sale of the artwork to Abu Dhabi’s Department of Culture and Tourism, the chairwoman of The Art Newspaper, Anna Somers Cocks, likened the appeal of Salvator Mundi to that of the Mona Lisa.

“The Louvre in Paris gets 7.2 million visitors annually and they estimate 80 per cent of them come to see the Mona Lisa in the first place,” she told UAE daily newspaper The National in December. “People will say ‘let’s go to Abu Dhabi to see this amazing museum and this amazing painting’”, she added.

It might be a very different type of religious tourism than the centuries-old Hajj and Umrah pilgrimages, but the pull of Salvator Mundi, Sheikh Zayed Mosque, the Museum of Islamic Civilization and others add up to a growing allure across the GCC for religious travellers.

For Saudi Arabia and the UAE especially, leveraging such popular destinations is proving a key factor in diversification efforts, bringing increasing blessings for the two countries’ coffers.