By Rob L. Wagner
30 October 2016
Jeddah – New visa fees intended to boost non-oil revenue and narrow Saudi Arabia’s near $100 billion budget deficit have gone into force and are likely to have a significant effect on pilgrims with the price of a haj visa rising five-fold.
An estimated 1.86 million pilgrims performed the 2016 haj, about 1.32 million of them foreigners, according to Saudi Arabia’s General Authority for Statistics. The United Nations’ World Tourism Organisation said Saudi Arabia had 18 million international visitors in 2015.
Visitor numbers dropped by about 600,000 in 2015 from 2014 but did not have a significant effect on the nascent tourism industry centring on heritage sites in Mecca and Medina and tourist destinations such as Yanbu and Taif.
The price of a haj visa skyrocketed from $94 to $533. The hike sparked protests among South African Muslims. Moulana Ebrahim Bham, secretary-general of the Council of Muslim Theologians in South Africa, said a 10,000-signature petition was submitted to the Saudi Embassy and General Commission for Tourism and National Heritage seeking relief from the fees.
The price of a visa to perform umrah, a pilgrimage that may be performed at any time of the year, also rose sharply. Ahmed Bilal, an expatriate worker living in Taif, said the new fees will make it difficult to get his family to Saudi Arabia on umrah visas. “It makes it not easy to get the visa and it means I might have to take on some extra work,” he said, “but we will find a way.”
Short-term and transit visas issued by Saudi Arabia are close to what other countries charge. Short-term Saudi visa fees are slightly higher than Schengen visas issued by some EU countries. However, visitors incur greater expenses the longer they intend to stay in Saudi Arabia.
The visa fee hikes were implemented to boost income as Saudi Arabia struggles to wean itself from oil revenues and develop a sustainable economy. Measures taken include privatising 13 ministries, which will require public sector employees to reapply for jobs once the ministry goes private; taxing vacant land to encourage construction; slashing government employee bonuses and allowances; and raising fuel prices.
“The measures are intended to help raise much-needed non-oil revenues. Businesses will have to pay an extra cost for travel as per global fee structures. The fee comes from a relatively low base and remains competitive,” John Sfakianakis, director of economic research at the Gulf Research Center, told Saudi Arabia’s Arab News.
A Saudi economist in Jeddah said the increased fees would have little effect on the number of international visitors.
“Saudi Arabia is riding a big wave in interest from foreign Muslims who want to see the land of the two holy mosques,” he said. “Visa requirements are easier to meet and, although it may be more expensive now to get here, it’s every Muslim’s dream to come to Mecca and Medina.”
The new fees would have little effect on large companies doing business in Saudi Arabia, he said, adding: “Large corporations see this as the cost of doing business and can absorb the costs but small and medium-sized businesses that rely heavily on expat labour may pass those costs to the consumer or client.”