The holy city Mecca currently faces a shortage of plots for shopping malls and high cost, with many shoppers instead opting to head to nearby Jeddah, Colliers said in a report last week. But the ambitious plan to scale mall space to 804,000 square metre look to attract shoppers.
Saudi Arabia and its developers and retailers have plans to ring in tourism dollars by tripling shopping-mall space by 2025, a figure according to Colliers International.
The government intends to wean the economy off oil, redirecting attention to attracting the number of foreign pilgrims to 30 million per year by 2030, up from the seven million last year, Bloomberg reported. The sector currently makes up 20% of the kingdom’s non-oil economy, according to Oxford Business Group.
The holy city Mecca currently faces a shortage of plots for shopping malls and high cost, with many shoppers instead opting to head to nearby Jeddah, Colliers said in a report last week. But the ambitious plan to scale mall space to 804,000 square metre look to attract shoppers.
Projects for malls and homes near the Grand Mosque by the US$9.6 billion Jabal Omar Development Co. will add 38 hotels and some of the country’s largest malls.
Spending by pilgrims during the five-day Hajj season along is expected to hit US$5.6 billion by 2022, up from US$4.2 billion last year, according to a research report cited in Saudi-owned Asharq Al-Awsat newspaper.
To meet the growing number of pilgrims, a project to expand the capacity of the Grand Mosque to 2.5 million from 1.5 million has recommenced after it was halted when a crane collapse in 2015 killed more than 100 people.
Other projects that were halted after falling oil prices hit the economy are also resuming across the country.
Revenue from pilgrims could rival and even exceed the kingdom’s vast oil returns in the long term, Jabal Omar’s Chief Executive Officer Yasser Al-Sharif told a conference in Riyadh last year. Oil is a commodity that can be substituted, he said, “Pilgrimage is not.”