Pilgrimages are a big business—and getting bigger; The haj, which all Muslims aspire to do at least once in their lifetimes, now brings in $16.5 billion, around 3% of Saudi GDP

Pilgrimages are a big business—and getting bigger

Oct 12th 2013 | BEIRUT AND CAIRO |From the print edition

MECCANS say they do not need agriculture, for God has given them the pilgrimage as their annual crop. Millions of Muslims are now setting out to take part in this year’s haj, a trek to Islam’s holiest site, in Saudi Arabia. The haj, which all Muslims aspire to do at least once in their lifetimes, now brings in $16.5 billion, around 3% of Saudi GDP. Jerusalem, a holy city for all three Abrahamic religions, also draws crowds of pilgrims, and huge numbers of Shia Muslims visit shrines in Iraq. The UN’s World Tourism Organisation estimates that over 300m people go on pilgrimages each year. Countless others visit shrines or sacred places.The numbers are increasing because the Middle East’s growing middle class means more tourists, three-quarters of whom travel within the region. Abundant tumult is less likely to deter those travelling for religious reasons than ordinary tourists. Shia pilgrims still flock to Karbala and Najaf in Iraq, despite the threat of bombs. “The person who sees their holiday as a cultural experience will be put off by bad security, but the believer will not,” says Kevin Wright, an observer of new tourist markets.

Faith-based tourism in the region dates back to Moses leading his people through Sinai “with God as their tour guide”, jokes Peter Tarlow, a travel consultant who is also a rabbi. In medieval times Venetian traders took Europeans on trips to the Holy Land. Israel has long promoted religious tourism. Yet most countries have been slow to profit from their religious sites.

One exception is the haj, which has both expanded and gone upmarket. Oil wealth and a rising identification with Islam have made it a huge moneymaker. Posh hotel chains have piled into Mecca, including Raffles, which in 2010 opened the spa-equipped Makkah Palace. Souvenir shops do such a roaring trade that some only bother to open during the haj. Travel firms in the tourists’ home countries do nicely too. In Egypt packages cost up to 80,000 Egyptian pounds ($11,450), according to Reda Dunia, who runs a travel agency in Cairo.

Some pilgrims grumble about the rising cost of performing their religious duty. Airlines and hotels put up their prices during religious holidays. Nevertheless, says Mr Dunia, Muslims often save for years for their haj, “so most of them are willing to spend money on the experience.” Some tour operators now offer packages that include leisure pursuits alongside the religion. This helps to boost the price tag and might also persuade agnostics and atheists to visit holy sites just for the cultural experience.

Countries lacking their own religious landmarks are now trying to create them. In June Dubai’s authorities announced plans to build a Holy Koran theme park, with walls depicting stories from the Koran and a garden of plants mentioned in it. Dubai is betting that the pious are as profitable as the shoppers and fun-seekers that it currently attracts.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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