ISLAMABAD: Business people owning property in Makkah and Madinah catering to Haj pilgrims claim they lost SR3 billion this year because of a glut of accommodation in the two cities.
They claim that the oversupply of accommodation can be attributed to the irregular entry of certain companies in the two cities, and government construction of large hotels, Arab News reported.
The chambers of commerce and industry of Riyadh, Makkah and Madinah will discuss this issue at a forum in Makkah on Nov. 15, Al-Shareef Abu Rayash, chairman of the Makkah Chamber of Commerce and Industry’s real estate committee, told Arab News.
He said 30 experts would speak at the forum.
Abu Rayash said that four committees would petition the government to intervene. The situation was grave and could lead to further losses for them. He described the situation as a recession.
“Because of this, rents in Aziziah dropped from the previous SR7,000 per pilgrim to SR2,000. This is in addition to the launch of a prominent ministry’s project to construct 24 hotels in the Kudai area, apart from the current construction of a chain of hotels.”
He said individuals and endowment property operators would be forced out of the market if this situation continues.
The Haj Ministry’s plan not to increase the number of pilgrims in coming years would be another blow to the sector, he said.