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.



Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
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Saudi Arabia Sees Highest Level of Non-oil Private Sector Activity in 4 Months

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)
The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders. (Asharq Al-Awsat)

Business activity in Saudi Arabia's non-oil sector accelerated to a four-month high in September, driven by strong demand, which led to faster growth in new orders. The Riyad Bank Saudi Arabia Purchasing Managers' Index (PMI), adjusted for seasonal factors, rose to 56.3 points from 54.8 in August, marking the highest reading since May and further distancing itself from the 50.0 level that indicates growth.

The 1.5-point increase in the PMI reflects a larger expansion in both output and new orders, alongside challenges in supply. The improvement in business conditions contributed to a significant rise in employment opportunities, although difficulties in finding skilled workers led to a shortage in production capacity.

At the same time, concerns over increasing competition caused a decline in future output expectations. According to the PMI statement, inventories of production inputs remained in good condition, which encouraged some companies to reduce their purchasing efforts.

Growth was strong overall and widespread across all non-oil sectors under study. Dr. Naif Al-Ghaith, Senior Economist at Riyad Bank, said that the rise in Saudi Arabia's PMI points to a notable acceleration in the growth of the non-oil private sector, primarily driven by increased production and new orders, reflecting the sector’s expansionary activity.

Al-Ghaith added that companies responded to the rise in domestic demand, which plays a crucial role in reducing the Kingdom's reliance on oil revenues. The upward trend also indicates improved business confidence, pointing to a healthy environment for increased investment, job creation, and overall economic stability.

He emphasized that this growth in the non-oil sector is particularly important given the current context of reduced oil production and falling global oil prices. With oil revenues under pressure, the strong performance of the non-oil private sector acts as a buffer, helping mitigate the potential impact on the country's economic conditions.

Al-Ghaith continued, noting that diversifying income sources is essential to maintaining growth amid the volatility of oil markets. He explained that increased production levels not only enhance the competitiveness of Saudi companies but also encourage developments aimed at expanding the private sector's participation in the economy.

This shift, he said, provides a more stable foundation for long-term growth, making the economy less susceptible to oil price fluctuations.