Prices of hotels around the Grand Mosque in Makkah have dropped by as much as 150 per cent due to the development projects in the area which include a considerable number of construction and hotel projects, a top official said.

“The decline in occupancy rates of rooms this year is 15 to 20 percent. Investors are now offering rooms at lower prices to the local market to muster a higher percentage of occupancy,” Fahad Al-Wethyiani, head of the Hotels and Tourism Committee at the Makkah Chamber of Commerce and Industry was quoted as saying by Arab News.

According to Al-Wethyiani, hotel rates are now dropping after many years and foreign tourism firms and Haj service providers were instrumental in creating a speculative market.

“The prices used to be more than SR180,000 ($48,000) for a suite with a view of the Kaaba during the last ten days of Ramadan,” he said, adding that the price has now dropped to SR70,000 for the entire month.

“This represents a 150 per cent decline,” he said.

The Grand Mosque will see the construction of large hotels with tens of thousands of new rooms owing to the development projects, he said, adding that these hotels will set the actual prices of hotels in Makkah.

The hotels sector has also been forced to drop rates due to the reduction in the numbers of visas, which have been slashed to 500,000 from 1.5 million, according to Hafez Al-Juhani, vice chairman of the Advisory Committee of the Saudi Commission for Tourism and Antiquities.

Yet another top official pointed out that the price of hotels came down 50 to 60 per cent to attract domestic and GCC pilgrims who do not require visas, the report said.