Builders flock to Mecca to tap into pilgrimage boom

Thu Jun 9, 2011 4:24am EDT
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By Praveen Menon and Jason Benham

DUBAI/RIYADH (Reuters) - The Saudi holy city of Mecca is proving to be the exception to a Middle East property downturn, as more and more pilgrims flock to Islam's holiest city and fuel a hotel construction boom.

The more than 2.5 million pilgrims who flock to Mecca for the annual Haj pilgrimage, a duty for every able-bodied Muslim who can afford it, are witnessing a transformation of the city's skyline with luxury hotels, high-rise residential blocks and cranes now overlooking the Grand Mosque.

"Mecca has now come of age," said Shuja Zaidi, vice president of projects and general manager for Mecca Hilton & Towers in Saudi Arabia.

A forest of high-rise buildings just next to the Grand Mosque is emerging, built by Saudi developer Jabal Omar and costing more than $5.5 billion, where Hilton and others will open 26 new hotels and add 13,000 more rooms.

"But there's no doubt that these rooms will also be fully occupied," said Zaidi. "The simple growth of the Muslim population more than justifies the expansion."

A total of more than 6 million pilgrims enter Saudi for Haj and Umrah pilgrimages each year.

The expected spending spree by the government and developers in Mecca and the second holy city of Medina is valued at some $120 billion over the next decade and at the present there are $20 billion of projects underway in Mecca alone, according to Banque Saudi Fransi.

Marriott International Inc and Hyatt International have also announced plans to manage and operate hotels built by Jabal Omar.   Continued...

<p>Muslim pilgrims circle the Kaaba at the Grand mosque in Mecca, during the annual haj pilgrimage, November 19, 2010. REUTERS/Fahad Shadeed</p>