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Business aspect of Hajj and Umrah, visa system, pilgrimage packages and facilitation

Hajj and Umrah business

Saudi Arabia is the top beneficiary of religious tourism in the world and is earning a significant part of its total GDP form the faith of Muslims. The Hajj and Umrah pilgrimage is a second major boost for the Saudi’s economy after Oil and petroleum reserves.

Every year, a large number of Muslims from different countries start their journey to Saudi Arabia for religious rituals and visiting the sacred places. This sanctifier worship by performing Hajj or Umrah pilgrimage depends on economic affordability where tourists can make a choice of their comfort level with finances. The Saudi government facilitates the guest pilgrims and is spending a bulk of money to further expand its holly business.

What is Hajj and Umrah?

Hajj is one of the five pillars of Islam that is obligatory once in life only for those people who are financially and physically capable with the exception of not creating any hardship for family with their absence. It’s a journey to the holy city of Mecca in Saudi Arabia whereby pilgrimage rite begins on the 8th of Dhul-Hijjah (name of Islamic month) and ends on 13th of this month.

In contrast to Hajj, Umrah can be performed at any time of the year and is known as “minor pilgrimage” to the city of Mecca. Unlike Hajj, Umrah is not obligatory for the Muslims rather it’s an optional act of worship that is highly recommended in Islam. It is believed that one can get forgiveness of all the sins by performing either Hajj or Umrah with sincerity and devotion.

Visa requirement for Hajj and Umrah

Umrah pilgrimage can be performed with different types of visas like tourist, work permit, business permit, or a specified Umrah visa etc. The Saudi government is facilitating international travelers with e-visas and different types of travel permits can be applied online. In addition to e-visa, there are several travel agents who are providing immigration services for pilgrimage.

For performing Hajj pilgrimage, the hajj visa is required that can only be applied through travels agencies that are approved by Saudi ministry of Hajj & Umrah. Unlike Umrah, the hajj is not allowed with other visa types and a complete hajj package along with travel permit is mandatory before traveling.

Hajj quota system

Muslim population in the world occupies a huge number with approximately 1.9 billion across the world. Every year, pilgrims who travel to Saudi Arabia are not just limited to Islamic countries rather they are also welcomed from other countries where Muslims have significant number. Saudi government is working diligently to expand the infrastructure in Makkah for accommodating a maximum number of pilgrims.

Saudi Arabia introduced a quota system for pilgrimage because of a colossal public interest for traveling to sacred destinations. The quota for all the privileged countries vary every year depending on Muslim population, demand for pilgrimage, safety and security, and some other adjustments by governmental authorities. A general rule to determine the quota system is “one pilgrim per 1000 people”.

The following table reveals the Hajj quota for different countries in 2023 whereby Indonesia, Pakistan, India, and Bangladesh remained the top stakeholders.

Countries

Quota

Countries

Quota

Afghanistan

13582

Nepal

543

Algeria

41300

New
Zealand

204

Australia

2090

Nigeria

95000

Bangladesh

127198

Oman

14000

Bahrain

2094

Pakistan

180000

Belgium

1499

Palestine

2988

Cameroon

4527

Palestinians
in Lebanon

679

Canada

1951

Qatar

1087

Chad

3997

Russia

25000

China

9190

Senegal

12800

Egypt

35375

Singapore

900

Ethiopia

19619

Somalia

5206

France

9268

South
Africa

2500

Germany

4125

South
Sudan

616

Guinea

4527

Spain

970

India

175025

Sri
Lanka

1585

Indonesia

221000+4421(Hajj
Officers)

Sudan

32000

Iraq

15252

Sweden

1182

Iran

87550

Syria

22500

Italy

1351

Tanzania

11476

Jordan

3622

Tunisia

10982

Kazakhstan

4527

Turkey

37770

Kenya

4527

Uzbekistan

10865

Kuwait

3622

Uganda

4871

Kyrgyzstan

6000

UAE

2820

Lebanon

2716

UK

12348

Malaysia

31600

USA

9504

Mali

6032

Venezuela

91

Morocco

15392

West
Africa

306

Myanmar

2173

Yemen

10981

How to buy Hajj package and cost determinants

The hajj package can only be availed through different authorized service providers or travel agencies. The Nusuk is a platform designed under the guidance of ministry of Hajj and Umrah that provides the hajj packages but these are limited to certain countries. The other and most common way of getting hajj package is applying through travel agencies from respective countries. The Saudi Arabia’s government gives hajj quotas to other countries with Muslim population and then different countries manage with its own way to allot the hajj offers.

In Pakistan, for example, when hajj quota is announced, the government retains with some percentage of this allotment and remaining part is distributed among private travel agencies. Then, Pakistani residents submit applications either through government’s hajj scheme or private agents.

There are some primary factors that affect the cost of Hajj and Umrah. These cost determinants are accommodation, transportation, and food.

                                         

The travel agencies provide a variety of packages that include different types of hotel experiences. The prices of accommodation vary by depending on number of beds in a room, the distance from worship places, food availability, different facilities and overall quality of the living room. In Makkah and Madinah, there are plenty of newly constructed hotels where people can avail standard to most luxurious services.

The transportation is the second variable in Hajj and Umrah packages that carry much significance to determine the comfort level of pilgrims. Transportation includes airplane fairs, airport to hotel & hotel to airport transport, inter-city & intra-city travel, and travel between hotel to worship sites. Different packages offer different transport services and cost varies with different airlines, and travel options like private taxis, private buses, and public transport like train and buses.

The quality of food, variety, number of times in a day, standard of hotel, and types of food items are all the things that directly affect the cost of Hajj and Umrah. During pilgrimage, people belonging to different nationalities can easily avail their traditional food or the food of their choice. So, by depending on budget, pilgrims can select a range of food options with different Hajj or Umrah packages.

Note; Unlike Hajj, For Umrah pilgrimage it’s not mandatory to buy a complete package.

Number of Hajj and Umrah pilgrims

The strength of religious tourism keeps on surging with passage of time and to accommodate maximum number of pilgrims, the Saudi government is further increasing the facilities around the Kaaba (God’s House). The Saudi Arabia’s plan 2030 includes, building enough capacity for hosting 30 million pilgrims each year.

                            

The above chart depicts the number of Hajj pilgrims each year, including Foreign/external pilgrims and sum of external and domestic pilgrims i.e. total pilgrims. In 2020, because of COVID-19, the Hajj Ritual was limited to domestic Saudi residents and in 2021, only 58.7 thousand people could perform obligatory pilgrimage.

Apart from Hajj pilgrimage, the Umrah aspirants are even more in number that can perform pilgrimage at any time during the year. According to ministry of Hajj and Umrah, just in the holy month of Ramadan 2024, around 30 million people appeared in Umrah Pilgrimage.

Financial aspect of Hajj and Umrah pilgrimage

The significance of Hajj & Umrah, faith of Muslims, religious sites, and Islamic history are all the drivers that attract a massive number of people to visit Saudi Arabia. Every Muslim across the world has a wish to perform pilgrimage and for that they are ready to spend their life-time savings. This creates an opportunity for Saudi Arabia to generate money out of religious tourism.

Every Year, Saudi Arabia earns $10-15 billion from Hajj and $4-5 billion from Umrah services. According to Future Market Insights, the annual growth rate of religious tourism market is 7% and Saudi income may reach to $350 billion by 2032.

 

                                           

The economics of religious tourism has two wings, first is, state earning/Saudi Arabia’s earning that means the GDP generated by the country. The second wing is Governmental revenue i.e. the earning of Saudi Arabia through direct and indirect ways. The direct earning source of Saudi Arabia includes different agencies or institutions, for example, charging the visa fee, Saudi governmentally owned airline services etc. The second and major source of earning is collecting taxes from private businesses, for example, hotel industry, food sellers, transportation, and several other private companies that are operating business in the premises of Makkah and Madinah.

Saudi Arabia's expenditure and facilitation for pilgrims

Along with earning a massive amount of money out of pilgrimage, Saudi Arabia’s government is spending purposely on religious tourism in different ways.

  • Developmental projects like constructing new buildings to increase the capacity for accommodating more number of people, public transport, installation of advance technology, and other construction work for the comfort of people.

  • The maintenance of different things like mosques, Kaaba, renovation of buildings, technology, infrastructure, and lots of other facilities require the attention to stay longer and remain functional.

  • Saudi government subsidize food for pilgrims to make it easily accessible for all the religious tourists.

  • The heat strokes, respiratory infections, fever, heart attacks, and other health issues are evident during pilgrimage and government has established several health facilities where free health services can be availed especially during Hajj days.

The pilgrimage demand of Muslims across the world is exponentially increasing even with the upsurge in cost of Hajj and Umrah. The government of Saudi Arabia is further advancing to get maximum financial output by the religious craze of Muslims.

 

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