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News Release


Infrastructure key to increasing religious tourism in Saudi’s Holy Cities

JLL MENA issues first real estate study on Holy Cities of Makkah and Madinah

​​​JLL MENA, the world's leading real estate investment and advisory firm and the largest in the Middle East, has reported that the Holy Cities of Makkah and Madinah are unique in the MENA region in that they are constrained more by supply and capacity constraints and not demand (which is effectively unlimited). JLL MENA’s Holy Cities report is the first report undertaken by a globally renowned firm on the real estate sector in the Holy Cities of Makkah and Madinah.
The major findings of this report are as follows:-
  • Unique markets – unconstrained by demand;
  • It is believed that the number of religious tourists could increase from 7.8 million to 13.75 million by Hijri year 1440 (2019);
  • This will lead to opportunities to expand the hospitality market with a total of 82,000 rooms required by Hijri year 1440 (2019).

Chiheb Ben-Mahmoud, Senior Vice President at JLL MENA Hotels stated “As Holy cities, Makkah and Madinah are absolutely unique in nature and this is the first report by a global firm that provides a holistic overview of the Holy Cities’ real estate market. We have seen regionally that, attention is being directed towards the Holy Cities and it has become essential to report on the major development plans being undertaken in these Holy Cities. The Saudi Government in particular has taken great strides to capitalize on the real estate in the both cities to better be able to accommodate a larger volume of pilgrims.”

The report states that “Given the significant movement associated with the Hajj, the prime constraint is imposed by the ground transport system rather than broader airport / seaport capacities or the ability to provide sufficient lodging capacity. Total (Hajj plus Umrah) visitors have increased from 5.3 million to 7.7 million over the past 5 years.”

“Our analysis of potential capacity constraints suggests that the total number of Hajj and Umrah pilgrims visiting Makkah and Madinah could increase to 13.75 million by Hijri year 1440 (2019).  The increased number of pilgrims will provide significant opportunities for additional hotel rooms in both Makkah and Madinah” said Chiheb Ben-Mahmoud.

JLL MENA expects the number of pilgrims performing Hajj to increase less rapidly than those performing Umrah due to the more concentrated timeframe of the Hajj. This ultimately means more significant capacity constraints, bottle necks and challenges involved.

A large number of initiatives are underway to alleviate the current infrastructure constraints to efficiently accommodate a larger number of pilgrims, which are estimated to reach around 13.75 million by Hijri year 1440 (2019). Although land ownership in the Holy Cities is limited to Saudi entities, there has been significant GCC and other foreign investment attracted to these markets in the form of Joint Venture agreements with Saudi entities. These include:

  • King Abdulaziz International Airport, Jeddah - expansion and upgrading, which will allow it to handle up to 80 million passengers per annum.
  • Madinah Airport - The General Authority of Civil Aviation (GACA) also has plans to upgrade the existing terminals and develop new facilities at Madinah airport. This expansion is designed to stimulate domestic tourism and increase the ability of pilgrims to travel to Madinah. The project is designed to increase annual passenger traffic from 4 million passengers in 2009 to 14 million by 2030.
  • KAEC Seaport - The terminal is being designed to handle up to 500,000 pilgrims during the Hajj season. It is proposed that pilgrims will be able to transfer onto the Makkah Madinah Railway at the KAEC station and reach either of the Holy Cities in less than 90 minutes.
  • Haramain High Speed Railway - The 450 km line will be fully electric, with train speeds of up to 320 km per hour being achieved. It is estimated that up to 50% of the pilgrims visiting the Holy Cities will use the proposed new train.
  • Madinah Station - The Madinah Railway Station will be a terminus station for the Haramain High Speed Rail. Current projections demonstrate that the station will handle 6.2 million passengers per annum by 2015.
  • Expansion of the Holy Mosque - The Haram has recently been significantly expanded so as to provide space to accommodate 500,000 pilgrims at any given time. A further major expansion is currently taking place to expand the northern plazas of the Mosque towards the Shamiya area.
  • Hotel Expansion - The stock of hotel rooms in Makkah could double over the next 10 years, with as many as 50,000 additional rooms proposed within the major new redevelopment areas. There have been far fewer new hotels announced in Madinah, with less than 3,000 additional rooms in projects close to the Holy Mosque expected to be delivered over the next 3 years.   

Among the major projects in Central Makkah for which master plans have been approved are:

  • Jabal Omar is one of the largest of these mega developments. The project is expected to deliver over 10,000 hotel rooms as part of the total built-up area of around 1.8 million square metres.  The master plan for this project has been amended more than once given the sensitive nature of the location close to the Haram.
  • Jabal Khandamah - This project covers 600,000 square meters of land to the east of Al Masjed Al Haram in Makkah. The development aims to replace the old buildings, streets and narrow alleys with high quality new buildings. The Khandamah project aims to become a pedestrian friendly city, with the total separation of pedestrians and vehicular traffic.
  • King Abdul Aziz Road is a 3.5 km development that is planned to re-develop one of the most densely populated areas in Makkah, to provide a mix of high quality hospitality, residential and commercial real estate.
  • Madinah Master Plan (Including Knowledge Economic City) - Madinah’s most prominent real estate project, Knowledge Economic City (KEC) is located approximately 5 km east of the Holy Mosque. It is a 480 hectare development with a projected built up area of 8 million sq m and a projected population of 150,000. The project will require investment of over USD 8 billion.

These infrastructure improvements are likely to result in a major increase in visitor arrivals to the Holy Cities over the next 10 years. The increased number of pilgrims and changes in their lodging requirements will provide opportunities for a major expansion of the hospitality market within these cities. 
“Our analysis of potential visitor arrivals suggests there could be demand for around 82,000 hotel rooms in the Holy Cities by Hijri year 1440 (2019). The major implications of this increased demand include leading international operators competing to deploy their most prestigious upscale brands within future hospitality projects in the Holy Cities. However, the extent to which these brands are in line with the current and future demand profile remains an open question.

The traditional budget hospitality concept does not seem to provide a straightforward or relevant alternative. The optimal hospitality model in the Holy Cities is yet to be reached in a context where investors and the Saudi authorities, are challenging the conventional vision” says Chiheb Ben-Mahmoud.