Hospitality sector set to lose SR2.5 billion

Hospitality sector set to lose SR2.5 billion
Updated 08 October 2013

Hospitality sector set to lose SR2.5 billion

Hospitality sector set to lose SR2.5 billion

The Tourism Commission at the Madinah Chamber of Commerce and Industry urged for a solution to the losses incurred by the hospitality sector as a result of decisions recently taken by the Ministry of Haj.
Abdulghani Al-Ansari, chairman of the commission, said: “We will speak to the Haj minister regarding the authentication of operators’ contracts and issues requiring compensation.”
“Occupancy rates have fallen by 30 to 35 percent since Ramadan,” he said. “With the pilgrims’ quota having been reduced by 20 percent compared to last year, this year’s Haj season will bring in only 1.4 million foreign pilgrims. Similarly, 700,000 domestic pilgrims are expected to perform Haj this year owing to the 50-percent reduction rate in the number of locals performing the pilgrimage.”
This year’s Haj losses stand at SR 2.5 billion.
“This figure represents the amount that would have been spent by 1.54 million pilgrims coming into the Kingdom,” said Al-Ansari.
“I wonder why operators have to be at the receiving end of decisions affecting the hospitality market. The reduction in the number of pilgrims means that the income of leasers has come down and this will render the operators incapable of fulfilling their financial commitments,” he said.
The commission will recommend the creation of a “model contract” that protects the interests of those concerned.
The commission will also recommend to the Ministry of Labor and the Supreme Tourism Commission that the hospitality sector be treated like the rest of the contractor sector with regards to Saudization (nationalization) rates and categorization mechanisms.