Each year millions of pilgrims from all around the world visit Saudi Arabia to perform the rituals of Hajj and Umrah at the country’s two major Islamic sites; Mecca and Medina. Last year 43.9% of country’s domestic trips were made to Mecca – making religious tourism the backbone of the travel industry in Saudi Arabia.
|Reflecting on the popularity of religious tourism, the government of Saudi Arabia has decided to invest in tourism as a means to reduce the economic dependence on oil. In recent years there have been investments in infrastructural improvements such as airports, railways and roads. In August 2012 the government announced its plans to improve the transport system in Mecca. The plan includes the construction of a metro system and a bus network and will comprise a total investment of SAR62 billion over a 10 year period.
The government has also recognised the need to look beyond religious tourism by investing in other domestic tourism facilities. Fronted by the Saudi Commission for Tourism and Antiquitites (SCTA), the government has authorised the development of 40 private museums, new roads to heritage sites and new airports. According to SCTA forecasts, domestic trips will grow to 128 million by 2019.
The latest figure from Timetric reveals a decline in inbound and domestic tourism, whereas total tourism expenditure increased. In 2011 the travel and tourism sector formed 2.3% of the nation’s GDP. The total number of domestic trips taken by residents decreased from 28.5 million in 2007 to 23.6 million in 2011 with a CAGR of -4.6%. While outbound trips increased at a CAGR of 16%, inbound tourism registered decline and posted a CAGR of 0.8%. The key reason for the decline in inbound tourism has been the effects of the Arab Spring, as visitors from North Africa and Middle East regions, who form a key component of the Haj pilgrims, took fewer trips. Despite a decline in both domestic and inbound tourism in 2011, total spending by inbound tourists increased with a CAGR of 23.08% due to a growing economy and higher disposable income.