Expected Recovery of Accommodation, Support Services Sector in Medinah, Makkah

FILE PHOTO: Pilgrims, keeping a safe social distance, perform Umrah at the Grand Mosque, in the holy city of Makkah, Saudi Arabia, October 4, 2020. (Reuters)
FILE PHOTO: Pilgrims, keeping a safe social distance, perform Umrah at the Grand Mosque, in the holy city of Makkah, Saudi Arabia, October 4, 2020. (Reuters)
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Expected Recovery of Accommodation, Support Services Sector in Medinah, Makkah

FILE PHOTO: Pilgrims, keeping a safe social distance, perform Umrah at the Grand Mosque, in the holy city of Makkah, Saudi Arabia, October 4, 2020. (Reuters)
FILE PHOTO: Pilgrims, keeping a safe social distance, perform Umrah at the Grand Mosque, in the holy city of Makkah, Saudi Arabia, October 4, 2020. (Reuters)

Experts have identified several factors that will contribute to the recovery of the accommodation and support services sector in the two holy cities of Makkah and Madinah with the coming month of Ramadan.

The operation of the Haramain Train is among the main factors that will contribute to the revitalization of travel to and from the two cities, in addition to the rapid vaccination campaign, with more than 3 million people inoculated so far, according to recent figures published by the Saudi Health Ministry.

Hotels in Makkah and Madinah constitute 75 percent of the total hotels operating in Saudi Arabia, with 1,151 licensed hotels in Makkah having around 450,000 rooms, and about 75,000 rooms in Madinah. These businesses are greatly relied on to revive other economic sectors, especially in light of the recession that was caused by the total and partial lockdown in the Kingdom.

According to experts, transportation, restaurants, and retail outlets will see some improvement in the two cities during the holy month of Ramadan, as occupancy rates are expected to increase and reach their peak in the last ten days of the month.

This optimism comes a few days after the Saudi government presented a package of initiatives to support investors and economic establishments operating in the Hajj and Umrah sector.
Economic Expert Marwan Al-Sharif noted that the operation of the Haramain train would constitute an important factor in reviving the economy in the two cities, with the increase in the number of pilgrims.

He also pointed to the importance of precautionary measures that the train administration would take to ensure the safety of passengers and to prevent the spread of the virus.



British Assets Gain, Mid-cap Stocks Lead after Labour Election Win

A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
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British Assets Gain, Mid-cap Stocks Lead after Labour Election Win

A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights
A view of the Palace of Westminster which houses Britain's parliament, during the general election, in London, Britain, July 5, 2024. REUTERS/Hannah McKay Purchase Licensing Rights

British domestic-focussed mid-cap stocks were the biggest gainers on Friday after the centre-left Labour Party surged to a comprehensive win in a parliamentary election with blue chip stocks, government bond prices and the pound higher.

Hopes that the incoming government will provide a period of economic stability after an often tumultuous 14 years of Conservative Party rule sent the FTSE 250 midcap index (.FTMC), up as much as 1.8% in early trading to its highest since April 2022.

The blue chip FTSE 100 index (.FTSE), was last up 0.2% and the yield on 10-year British government bonds or gilts, dropped 3 basis points to 4.17%, marginally better than other European markets, Reuters reported.

Labour won a massive majority in the 650-seat parliament while Rishi Sunak's Conservatives suffered the worst defeat in the party's long history as voters punished them for a cost of living crisis, failing public services, and a series of scandals.

"A landslide victory provides the sort of clarity and stability that equity markets need in an increasingly volatile world," said Ben Ritchie, head of developed market equities at abrdn.

"If the new government gets this right, businesses with significant exposure to the UK economy should be the likely winners - a shot in the arm in particular for companies in the FTSE 250 and FTSE Small Cap".

British home builders stood out, with an index tracking their shares up 2.3%.

"We think the formation of a Labour-majority government will have a positive impact on housebuilders and construction materials," said Aruna Karunathilake, portfolio manager at Fidelity.

"We expect Labour to reinstate housebuilding targets and perhaps also fund investment in local planning departments... That should alleviate builders’ concerns about planning bottlenecks impeding growth in the medium term."

Analysts at Goldman Sachs said that while Labour's manifesto policies imply relatively limited changes to fiscal policy they would modestly boost demand in the near term.

As a result, they raised their forecasts for British GDP growth by 0.1 percentage points in each of 2025 and 2026.