Abu Dhabi, United Arab Emirates (CNN) – Oil has added trillions of dollars to Saudi Arabia’s coffers for decades, but it’s a resource that will one day run out or lose price as the world turns to energy of choice.
Despite high oil prices, the kingdom knows this and has embarked on an ambitious task to diversify its revenue streams for a post-oil future. One such source is pilgrimage, an eternal monopoly that has a potential market of nearly two billion Muslims.
Shortly after King Salman bin Abdulaziz arrived in the force in 2015, Saudi Arabia announced a $21 billion allocation to expand the Grand Mosque in Mecca to accommodate another 300,000 worshippers. of a plan to diversify the Saudi economy until 2030.
“Unlike [the electricity sector], where Saudi Arabia has to worry about its long-term competitors, in the Hajj and Umrah box, it is guaranteed that they will have 0 festivals in perpetuity,” said Omar Al-Ubaydli, Director of Research in Bahrain. . Think tank founded in Derasat.
Muslims from around the world return to Saudi Arabia this week to carry out the annual Hajj pilgrimage after a two-year pause caused by Covid-19 restrictions. This is an opportunity for Muslims to fulfill an exclusive obligation, but also an opportunity for the economy. of the sacred cities of Saudi Arabia to have a good start.
The pandemic caused the number of Hajj pilgrims to drop to 1000 in 2020, but dropped to about 60,000 in 2021, when the Hajj was only open to Saudi Arabian citizens. This year, the kingdom allowed one million Muslims to perform the rites.
Experts say that with crude oil costs rising around $100 per barrel, generating billions of dollars per day, the economic benefits of the pilgrimage are marginal in comparison.
“Religious tourism in Saudi Arabia may not have the existing revenue-generating capacity of the oil and fuel sector, but the devoted importance of Mecca and Medina will never go away,” said Robert Mogielnicki, a senior fellow at the Gulf Arab States Institute. in Washington. ” It serves as a basis for developing the broader Saudi tourism sector and marketing it to a local, regional and foreign audience. “
The prospect of expansion is significant, says Steffen Hertog, an associate professor at the London School of Economics. Pilgrims could, for example, be encouraged to make larger trips to the countryside to stop at other devout sites or interact in recreational activities, especially the year-round minor pilgrimage to Umrah, where Hajj-related bottlenecks can be avoided, he said.
According to Mastercard’s most recent global destination cities index, Mecca attracted $20 billion in tourism dollars in 2018, Dubai alone.
Before the pandemic, pilgrimage revenues were expected to average around $30 billion a year and create 100,000 jobs for Saudis through 2022. It was at this time that the kingdom attracted around 21 million worshippers a year for the 10-day Hajj and Umrah pilgrimages, according to official knowledge cited via Reuters.
The number of pilgrims has declined particularly because of the pandemic, but the government is targeting 30 million pilgrims by 2030, which some analysts say is an ambitious figure.
The pilgrimage weighed on the government’s finances due to the charge of infrastructure and security, according to Hertog, but it brought a lot of money to the personal sector.
Mecca’s skyline around the millennial pilgrimage is replete with elegant skyscrapers that house Western hotel chains overlooking the Kaaba, the cube-shaped design Muslims flock to pray five times a day. overlooking the Kaaba, prices up to $4,000 for its luxurious suites for this year’s Hajj season.
But the government tried to get a piece of that pie. In two years, the Public Investment Fund plans to open the Rou’a Al Haram Al Makki allocation less than a kilometer from the Kaaba, with 70,000 new hotel rooms and 9,000 residential units. It is expected to contribute 8 billion rials ($2. 1 billion) to the Saudi economy. In a blow to personal overseas agencies that organize pilgrimages for Muslims in the West, the Saudi government announced this year a new booking platform that invites foreign pilgrims to sign and pay for the procedure directly through the new government-run formula called “Motawif. “
The formula is designed to streamline the application process, but has driven overseas agencies into bankruptcy. In the UK alone, the sector is worth around $240 million, and many Hajj traders are lately facing liquidation, according to the Independent newspaper.
The Saudi government responded to CNN’s request for comment.
The only risk to Saudi Arabia’s ambitions to capitalize on the pilgrimage “is the reduction of religiosity around the world,” Al-Ubaydli said. “But as long as Muslims continue to visit those places, they will constitute great economic opportunities for Saudi Arabia. “. “
CNN’s Nadeen Ebrahim contributed to this report