Sunday 27 Sep 2009
Swine flu: Umrah service providers counting the cost


MADINAH: Haj and Umrah businesses in the two holy cities of Makkah and Madinah have incurred financial losses of about $240 million as a result of swine flu fears, Asharq Al-Awsat newspaper reported Saturday.

The paper said the immense losses caused investors to sit together to discuss the possibility of dividing the losses among three parties: owners of hotels and furnished apartments, pilgrimage and Umrah companies and international operations companies, which are the most hard-hit.

“The available scenario for solution for the international companies is three fold: obtaining urgent assistance from the government to alleviate the losses caused by an unexpected situation, share losses with hotels and housing units or leave the market not only empty-handed but with heavy losses,” the report said, quoting Marwan Hafdhi, vice chairman of the Tourist Company for Haj and Umrah in Madinah.

He said the tourism economy in Madinah suffered serious damage as a result of swine flu, which kept many people, especially the rich, from coming to Saudi Arabia to perform Umrah during Ramadan.

“The 5-star visitors who spend money on VIP accommodation stayed away this year and thus caused hotel occupancy to drop to between 30-40 percent this year,” Hafdhi said.

He said financial losses were incurred by hotels, furnished apartments, the gold market, malls, supermarkets, retailers and small shops and this resulted in a huge economic slowdown.

In a related development, Walid Abu Sabah, chairman of the Hotel Committee in the Makkah Chamber of Commerce and Industry, dates the hotel crisis to last June when the H1N1 pandemic was announced. “Not only did foreigners from outside shy away from coming to the Kingdom for Ramadan, but also Saudis from the central, eastern and southern regions,” he said.

Ali Jaballah, the owner of Amjad Al-Salam Hotel in Madinah, said more than 300 hotels in the central area of the holy city incurred losses of more than SR400 million when their occupancy fell below 10 percent during Ramadan. “For hotels, Ramadan means half-pilgrimage. We have already lost this half and we do not know what will happen next,” he said, adding that they never experienced such a crisis before.



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