Religious Hospitality Economics 2026: Investment Guide for Makkah and Madinah Apartments and Hajj Housing Permits

Introduction: Investing in the Heart of the Islamic World

Investing in residential properties in Makkah and Madinah remains one of the most attractive and secure investments in the region. The renewed demand from millions of pilgrims and Umrah performers annually ensures a continuous flow of revenues while massive development projects under Vision 2030 continuously raise property values. However, this promising market witnessed fundamental transformations in 2025 with stricter quality standards and licensing requirements, demanding that investors have a deep understanding of the new requirements.

The Kingdom targets reaching 30 million Umrah performers and 6 million Hajj pilgrims by 2030 with expected revenues reaching 50 billion SAR from the Hajj sector alone. These ambitious figures translate into huge investment opportunities but come with strict regulatory responsibilities. In this comprehensive guide, we review everything you need to know for successful investment in the religious hospitality market.

Hajj and Umrah Statistics 2025: Numbers That Speak

The General Authority for Statistics revealed that the total number of pilgrims for the 1446 Hijri season corresponding to 2025 reached 1,673,230 pilgrims. Of these, 1,506,576 came from outside the Kingdom through various ports while 166,654 were domestic pilgrims from citizens and residents. These figures reflect a complete recovery in pilgrim numbers after the Corona pandemic.

Regarding Umrah, statistics for the first quarter of 2025 showed that the total number of Umrah performers exceeded 15 million, of which 6.5 million came from abroad representing an increase of over 10 percent compared to the same period in 2024. The majority of international Umrah performers arrived via air ports at a rate of 82 percent, reflecting the development of air transport infrastructure.

Distribution of Pilgrims by Entry Points

The distribution was as follows with 1,435,000 pilgrims arriving through air ports, 66,465 pilgrims through land ports, and 5,094 pilgrims through sea ports. This distribution clarifies the importance of the investment property being close to King Abdulaziz International Airport in Jeddah or Haramain train stations as a major attraction factor for tenants.

Property Prices in the Holy Cities 2025

Apartment prices in Makkah vary significantly depending on location and area. Prices in peripheral areas like Al-Sharaie start at around 400,000 SAR for small apartments ranging between 60 and 90 square meters. Apartments in prime locations start from 720,000 SAR and reach millions of SAR for units close to the Grand Mosque.

In Madinah, apartment prices range between 320,000 SAR and 950,000 SAR depending on location and finishes. The central area around the Prophet's Mosque sees the highest prices while emerging neighborhoods offer investment opportunities at reasonable prices with potential for future growth.

Return on Investment

Properties in Makkah are classified among the most profitable in the Kingdom with a return rate that can exceed 10 percent annually. This high return results from the continuous demand for accommodation from pilgrims and Umrah performers throughout the year with peaks during Ramadan and Hajj season. The real estate market in Makkah is considered relatively stable and is regarded as a safe investment due to guaranteed demand.

Best Areas for Investment in Makkah

Investment areas in Makkah vary to offer multiple options meeting different investor needs. Al-Misfalah area is relatively close to the Haram and is very popular among investors. Al-Aziziyah neighborhood is considered one of the developed areas close to essential services and accounts for 37 percent of total licensed pilgrim buildings. Ajyad area is distinguished by its proximity to the Haram and contains luxury properties. Al-Shawqiyah neighborhood is a growing area offering excellent investment opportunities at reasonable prices. Al-Rusaifah area is witnessing continuous development and contains modern real estate projects.

Hajj Housing Permits: The Legal Gateway to Investment

The Hajj Housing Committee in the Holy Capital announced the start of receiving applications for permits for buildings prepared for Hajj housing, calling on citizens wishing to obtain or renew permits for their buildings to apply to approved engineering consulting offices. Applications are received until the end of Rajab month while the deadline for issuing permits is the end of Shaban month.

The fee for a new permit is 300 SAR paid upon application while the annual renewal fee is 200 SAR. All safety and security requirements must be met according to the structural requirements and safety regulations issued by Civil Defense.

Steps to Obtain a Hajj Housing Permit

The process begins by contacting one of the engineering consulting offices approved by the municipality. The office prepares a technical report showing the building's compliance with required specifications and requirements. Then the application is submitted with the technical report, property deed, and building permit. Field teams inspect the building to ensure availability of necessary requirements and security and safety standards. Upon approval, the permit is issued and must be renewed annually.

Safety Requirements and Tourism Licensing

The Ministry of Tourism requires obtaining an official license before offering furnished apartments for rent. This includes registration and official licensing where all furnished apartments are required to obtain a valid license from the Tourism Authority. The process of issuing hotel and serviced apartment licenses usually takes 20 to 30 working days based on completing all documents and requirements.

Civil Defense Requirements

Civil Defense requirements for residential buildings are the cornerstone for ensuring guest safety. These requirements include installing early warning smoke detection systems in each residential unit and public corridors and providing suitable manual fire extinguishers in clear and easily accessible places. For multi-story buildings, requirements emphasize the need for an integrated firefighting network including fire hose boxes and automatic sprinkler systems in parking areas and common areas.

For hotels and hotel apartments, each room must be equipped with an independent smoke detection system and automatic sprinkler systems throughout the building including rooms, corridors, and event halls. Audio and visual alarm systems to alert guests, clear and illuminated emergency exits on each floor, and ventilation systems to extract smoke from escape corridors are also required.

Fines and Penalties

Violators face strict penalties including a fine of up to 10,000 SAR for anyone performing Hajj without a permit. Transporting pilgrims without the required permits exposes the owner to fines ranging from 50,000 to 100,000 SAR with seizure of the vehicle used in the violation and possible imprisonment for up to six months. The Ministry of Tourism intensifies regulatory tours to ensure operator compliance with regulations and violations may lead to financial fines or temporary or permanent license suspension.

Cleanliness and Proximity: Keys to Profitability

Analysis of visitor reviews for furnished apartments in the holy cities shows that the decisive factor in rental success is not just price but cleanliness, proximity to the Haram, and psychological comfort. Pilgrims no longer accept modest furnishing levels as competition with budget hotels has pushed apartment owners to raise furnishing and service levels from fast internet to hotel-grade cleanliness.

Operational Costs During Peak Seasons

Management during peak seasons during Ramadan and Hajj requires enormous operational effort including accommodation, daily cleaning, and immediate maintenance. Relying on specialized property management companies consumes a large portion of the profit margin but has become necessary for compliance with tourism and civil defense licenses. Property management fees are usually 10 percent of property revenue and include administrative, financial, legal, and technical services.

Regulatory risks require special attention as successful investment requires strict compliance with Hajj housing permits. Fines for random rental or violation of safety conditions may wipe out the entire season's profits. Therefore, it is recommended to allocate a budget for regulatory compliance within the feasibility study.

Major Development Projects Under Vision 2030

Makkah and Madinah are witnessing massive development projects that will change their features and raise property values. Work continues on the third Saudi expansion of the Grand Mosque at a cost exceeding 100 billion dollars including the main expansion building, plaza project, pedestrian tunnel project, central services station, and the first ring road.

Makkah Projects

Major projects in Makkah include several main axes. The Makkah Metro project includes 12 routes of which 7 are for local buses and 5 for rapid buses with a total of 400 buses. The Masar destination project includes King Abdulaziz Road consisting of tunnels, train stations, commercial centers, parking lots, and international hotels. The Makkah Gate project aims to develop the western suburb and includes 5 residential areas, a university, a medical city, and a government complex.

Madinah Projects

In Madinah, the Public Investment Fund continues to implement quality projects including the Rua Al Madinah project which is the largest hospitality project in the world. Work is also underway on King Salman's project for the expansion of Quba Mosque with a development area estimated at 50,000 square meters to accommodate 66,000 worshippers. The Prophet's Migration Path project seeks to revive the migration route and connect it to important historical sites. The housing sector is witnessing an urban renaissance with various projects providing more than 18,000 residential units.

Property Management: The Necessary Partner

Property management companies play a pivotal role in the success of investment in furnished apartments in the holy cities. Their services include rent collection and payment follow-up and dealing with defaulters, managing rental and marketing operations, coordinating periodic and emergency maintenance work, dealing with official authorities and obtaining permits, and preparing periodic financial reports for the owner.

Fee and Commission Structure

Property management company fees vary and usually include several items. Rental fees are charged when concluding or renewing contracts. Management and maintenance fees cover daily property services. Collection fees are calculated from amounts collected from tenants. Rental commission represents a percentage of the rental value usually 10 percent of property revenue. Some companies offer packages with fixed fees suitable for small and medium properties.

Tips for the Successful Investor

Before Buying

Study the market well and compare different areas in terms of prices and expected returns. Ensure the possibility of obtaining a Hajj housing permit for the building before purchase. Calculate operational costs accurately including maintenance, furnishing, and management commission. Check the property's proximity to the Haram and public transportation. Review the building's record with Civil Defense and the municipality.

After Buying

Make sure to obtain all required licenses before starting rental. Choose a reliable property management company with experience in the holy cities. Invest in furnishing quality and cleanliness as they are decisive factors in ratings. Allocate a budget for emergency maintenance especially before peak seasons. Follow regulatory updates continuously to avoid violations.

Frequently Asked Questions

Can non-Saudis invest in Makkah and Madinah properties?

Yes, non-Saudis can own in specific areas outside the Haram boundaries according to the non-Saudi property ownership regulations. It is recommended to check with relevant authorities for updated conditions.

What is the expected return on investment in Makkah apartments?

Returns can exceed 10 percent annually for well-managed properties close to the Haram. Returns vary depending on location, furnishing quality, and management efficiency.

Is a Hajj housing permit mandatory?

Yes, the permit is mandatory for those wishing to rent their property for Hajj housing. Renting without a permit exposes the owner to financial fines and service suspension.

How much are Hajj housing permit fees?

New permit fees are 300 SAR and annual renewal fees are 200 SAR in addition to technical report costs from the engineering office.

What is the best rental period?

Ramadan season and Hajj season represent peak demand and prices. Umrah is available year-round providing continuous income outside seasons.

Do I need a property management company?

Highly recommended especially for investors not residing in the holy cities. A management company ensures compliance with regulations, professional dealing with guests, and immediate maintenance.

Conclusion

Investing in Makkah and Madinah apartments represents an exceptional opportunity combining rewarding financial returns with spiritual value. With the Kingdom targeting 30 million Umrah performers by 2030 and massive ongoing development projects, the future looks promising for this sector. However, success requires a deep understanding of regulatory requirements from Hajj housing permits to safety requirements and tourism licenses. Cleanliness, proximity to the Haram, and service quality have become non-negotiable standards in a constantly evolving market. Choose your location carefully, obtain all licenses, commit to the highest quality standards, and you will find that your investment in serving the guests of Allah achieves priceless material and moral returns.