The many faces of Jeddah

Harriet Sinclair explores Makkah’s main gateway and finds a business hub and leisure destination that is also trying to capitalise on the increase in religious tourism to Saudi Arabia.

Mention the hospitality market in Saudi Arabia and many industry experts will comment on the dramatic increase of inventory in Makkah, the year-round appeal of Medina and the overall growth in religious tourism — which global information publisher Euromonitor International forecasts will continue to rise by a compound annual growth rate (CAGR) of 15%.

But although religious tourism means big business in the Kingdom; Makkah and Madinah are not the only markets pulling in travellers — Jeddah’s proximity to the holy city, combined with its seaside-resort appeal and business market, make it a serious contender in the Saudi Arabian tourism stakes.

Although it is growing at a relatively modest rate — particularly when comparing the new additions to the city with the proposed inventory in Makkah — the market in Jeddah has remained buoyant over the last few years, thanks mostly to its connection to Makkah, and in part due to its reputation as the preferred holiday destination of Saudis wanting to escape the summer heat of Riyadh and other inland cities.

Gateway to Makkah
Jeddah also benefits from religious tourism as a secondary market — pilgrims visiting the holy city of Makkah have to travel through Jeddah to reach their final destination; meaning the city has long been able to seize the opportunities that hosting religious travellers provides.

“Jeddah is the gateway to Makkah and as a result of this privilege, the city is getting hajjis or pilgrims upon their arrival for a couple of days until their arrangements in Makkah are made,” says Golden Tulip area general manager for Saudi Arabia, Mohammad Dabbas.

“Jeddah also acts as a hub for groups to congregate and stay after their visit to Makkah. For example Malaysians and Indonesians can stay in Jeddah for up to 10 days after they leave Makkah, and because the King Abdul Aziz airport in Jeddah is the one all visitors to Makkah arrive through, Jeddah gets a share in the religious tourism business — people have no choice but to come through Jeddah if they want to get to Makkah,” he adds.

Pilgrims wanting to visit Makkah may have to come through Jeddah — with many choosing to stay in hotels there — but with the increasing number of rooms in the holy city, hotels in Jeddah risk losing some of the religious tourists who would previously have stayed.

Jeddah Hilton and Qasr Al Sharq cluster general manager Wolfgang Maier says: “In the past Makkah was undersupplied, so Jeddah was used for Hajj groups to do the daily pilgrimage, but the authorities are now trying to move away from this.

“Encouraging everyone stay in Makkah means that there are more hotel rooms coming online there and that is having an effect on hotels in Jeddah — especially during the Hajj season which normally runs for two weeks in November.

In the past Jeddah was full of Hajj groups and they are now going directly to Makkah, so as the holy city grows in terms of room availability, religious tourism in Jeddah will suffer,” Maier asserts.

In addition to the increase in inventory in Makkah, there is another planned changed to the holy city’s links with Jeddah — the Haramain high speed railway, which will connect holy cities Makkah and Madinah with Jeddah, via the new King Abdullah Economic City.

The railway — phase one of which is planned to be completed in 2012 — is expected to make it easier and safer for Makkah and Madinah’s four million-plus pilgrims to reach their destinations, as well as ease road congestion in the heavily-populated cities.

“The railway will be a major improvement for all the cities involved,” says Soraka Al Khatib, head of Jones Lang LaSalle Saudi Arabia, Jeddah Branch.

“It will help with pilgrimage and it will definitely help a lot with the hospitality business and the office market.

There will be good transportation and a lot of developments in Jeddah, but on the other hand there is also a lot of investment in Makkah — they are looking at not only expanding the infrastructure, but also the merchandising, if you will; creating enough interest in Makkah for people to spend extra time there,” he continues.

Despite the increase in rooms coming online in Makkah, it is unlikely that Jeddah will completely lose out on the religious tourism market — particularly with the expansion of the King Abdullah Aziz airport that will include two new terminals and the extension of the southern terminal— as it will remain a port for pilgrims, who also may choose to take advantage of Jeddah’s location on the Red Sea and combine a trip to Makkah with a coastal break.

Local leisure
Described by JLL’s Al Khatib as “an entertainment city”, Jeddah’s beaches, shopping centres and restaurants attract Saudi families wanting to escape the heat of Riyadh in the summer, people on weekend breaks, and religious tourists wanting to spend a few extra days in the Kingdom.

“In Jeddah, we see mainly Saudis moving within Saudi Arabia — so it is very focused on local, internal travel,” Al Khatib explains.

“Locals moving around Saudi Arabia are a big part of the hospitality industry here. Where Jeddah differs from other markets in the Kingdom, such as Riyadh, is that it really concentrates on the religious and leisure tourism, where Riyadh is much more focused solely on corporate business,” he adds.

The mixture of business, leisure and religious tourism means that Jeddah has a varied market that doesn’t rely on one single element.

“Jeddah, being on the coast of the Red Sea, has a mix of people coming purely for leisure — either weekenders; holiday makers, especially during the school holidays; and divers who come to Jeddah for diving trips or instructors who bring diving students to Jeddah to learn,” says Golden Tulip’s Dabbas.

Tourists may be visiting Jeddah for leisure purposes, but what characterises the leisure market in the city is that it caters predominantly to internal travellers.

Hilton’s Maier confirms: “In the summer, Jeddah is a favourite place for the Saudis to spend their holidays — getting out of the dryer, hotter climate of Riyadh and heading to Jeddah, which is on the Red Sea and has beach facilities and a slightly lower temperature.

“It is almost exclusively Saudis who come exclusively for tourism. Saudi Arabia is not a country for tourism in the same way the UAE is; you need a visa to come in here and KSA has its hands full with religious tourism. So tourism here has a different definition.”

Visa regulations have an obvious impact on tourism in Jeddah; given the restrictions on international travellers, it is unlikely that the city will ever see a big influx of visitors from overseas.

But, says Rosewood Corniche managing director Hans-Peter Leitzke, the visitor restrictions are not as complicated as people imagine — and people visiting Jeddah for business are unlikely to encounter any problems with entry to the Kingdom.

“Visas are not really a problem or an issue as long as you plan your travels accordingly,” he says.

“Things have been simplified — you can apply online and it is all automated — but obviously you still can’t be spontaneous and suddenly say ‘I want to go to Saudi Arabia today’,” he adds.

“But I think it has become easier to obtain a visa because of the automation, so I think more people would consider travelling here because it has made it better.”

Seasonality
In addition to the onslaught of local leisure tourists looking to escape the heat, Jeddah witnesses an influx of government and corporate business in the summer months.

“Jeddah also has some government business,” explains Maier. “The king is here for about three months every year and he normally takes the business with him — it is a long tradition that the king of Saudi Arabia and his cabinet move to Jeddah during the summer months and go to Makkah in the Ramadan period.”

As many businesses already have offices in Jeddah, seasonal relocation is relatively easy for those looking to relocate when the King moves away from Riyadh for the summer period.

“Jeddah is still a major business hub for a lot of Saudi corporate companies,” explains Dabbas.

“Many businesses used to have their main headquarters in Jeddah, although over the last decade the majority of them moved to Riyadh, being the capital. However, the city remains an important location for corporate business, and for government related diplomats because most of the consulates are represented in Jeddah as well,” he adds.

From the variety of visitors Jeddah boasts, its unique selling point to hoteliers is its diversity — it captures a piece of the religious market, has a healthy base for business tourism, and is one of the few places in Saudi Arabia to attract any form of leisure guests.

“There is currently growth in the tourism business in Jeddah because the government is preparing more infrastructure than ever — now the King Abdullah Aziz airport is under expansion, they will hopefully have 40 million passengers coming through the airport when it is finished,” says Dabbas.

“This, as well as the improvement of the visa process for Saudi Arabia, will have a positive impact on the hotel business in Jeddah, and this will encourage other developers and investors to put more in to the hospitality industry and travel business here,” he concludes.