A MUST READ: X-raying Global High Rise in Cost of 2022 Hajj
By Ibrahim Muhammed
Independent Hajj Reporters
The astronomical increase in the cost of performing 2022 Hajj have created anxiety among Hajj participating countries whose intending pilgrims bear the brunt.
The rise in the cost of Hajj this year, though not unexpected, shocked Muslims in some countries who erroneously think that either the 2019 cost template will be used or a little above the bar will suffice.
With COVID-19 putting the squeeze on travel and hospitality sectors for nearly two years, many intending pilgrims were ecstatic that they will be able to perform their religious obligations without much financial burden.
However, almost all countries of the world have announced that the cost of Hajj this year will increase due to several factors.
Most countries attribute the increase to the global inflation in goods and services, which also affect the price of commodities and services in the Kingdom of Saudi Arabia.
About 90 percent of Hajj expenditure are expended within the Kingdom. The major component of Hajj worldwide are those services that are rendered by Saudi Arabian based service providers. These services include Accommodation, Feeding, Airport services (also known as United Agent Services), as well as the Five days of Hajj expenditures such as Tents in Mina, Feeding in Mina, Car Syndicate services and other sundry services in Madinah.
The Saudi Arabian government recently imposed a 15% VAT and Service charge tax on all sectors, thereby raising the cost of accommodation and other services significantly.
Another factor is the two-fold increased in the cost of Tents services, Hajj Visa and Adahi (animal sacrifice) by the Saudi Ministry of Hajj and Umrah. The Kingdom’s authorities have fixed SR300 (N31,030.80) as the cost of Hajj visa for this year’s Hajj. It was free in 2019.
Also, a document released by the South African Hajj Regulatory Body (SAHUC), and posted on its social media handle shows that each pilgrim will pay SR109 (Or N33,240.75) as the cost of health insurance for 2022 Hajj. There was no insurance cost in 2019.
The Ministry also set the cost of Adahi (Compulsory animal sacriﬁce for Hajj) through official channels at SR809 (N89,639.22). It was SR400 (N44,281)
The cost of Tents services inclusive of meals and drinks for the five days of Hajj in Mina and Arafat is put at SR5,655.23 (N584,930.58). It was cumulatively N338,779.74 in 2019.
This year, the United Agent Fee at King AbdulAziz International Airport is SR1132,75 (N117,089.55), while the same fee at Prince Mohammad bin Abdulaziz International Airport is SR982.10 (N101,574.15); i.e a total of N218,663.07. The cost in 2019 was N186,841.25.
The Saudi Ministry of Hajj compulsory payments exclude the cost of pilgrims Air Fare, Accommodation in Makkah and Madina, Feeding in Makkah and Madinah, Transportation within the Kingdom (Car syndicate services), security deposits, Pilgrims suit cases, uniforms and other sundry charges. More importantly, pilgrims spend all their Basic Travelling Allowance (BTS) in Saudi Arabia.
Although the National Hajj Commission of Nigeria (NAHCON) is yet to announce the final fare for Hajj 2022, it is instructive to note that the fare will include costs such as air fare, accommodation in Makkah and Madinah, feeding in Makkah and Madinah, as well as other expenses.
It is also pertinent to understand that the international factors superseded the local factors when trying to solve the difficult equations of high rise in this year’s Hajj fare.
The factors that propel rise in the cost of Hajj actually started in 2019 when the Government of Saudi Arabia effected a nearly six-fold increase in visa fees. It is a sign of things to come but many of the players in the industry didn’t take notice.
Immediately after 2019 Hajj, a single entry visa that used to cost $93 was raised to $533. The cost of a multiple entry, 6-month visa cost went up to $800 and a one-year visa would cost $1,333.
The increase was viewed then as part of a wider campaign to lessen the kingdom’s dependence on oil and to increase revenues in other areas, including immigration fees.
To underscore the global impact of rise in 2022 Hajj cost, HAJJ REPORTERS hereby presents the Hajj fare of 10 countries with the highest numbers of pilgrims and the factors that contributed to a rise in their fare.
This year’s cost of performing Hajj by Bangladesh pilgrims is higher than Nigeria, India, Indonesia, Pakistan and Malaysia.
Bangladesh pilgrims will pay a minimum of $5,332 for performing Hajj this year, which is about 47% more ($3,627) than for a pilgrim in Pakistan, and 93% more ($2,763) for Indonesian pilgrims. It is noteworthy that pilgrims from these countries get substantial subsidy from their governments.
Hajj packages in India and Malaysia cost more than Bangladesh, but pilgrims in both countries get subsidies from the government.
For example, the cost of Hajj this year increased by 24-28% in Bangladesh compared to 2020.
After the Ministry of Hajj and Umrah’s announcement of cost of services in Mashair, Bangladesh hiked their prices further by another Tk 59,000, an equivalent of 700 US dollars (or N278,525.42).
According to the State Minister for Religious Affairs, Mr Faridul Haque Khan, the hike was linked to “costs rising at the Saudi Arabian end of the journey”. He further explained that the previously announced prices were based on estimates of the costs in Saudi Arabia and that they have no option than to adjust the price by adding another 700 US dollars.
This year, about 57,585 Bangladeshis will perform the Hajj. About 4,000 will go through government arrangements, while 53,585 will go through private agencies.
In 2020, for example, Bangladesh announced three government packages for Hajj trips, though the trips were eventually cancelled due to the pandemic. The first package cost Tk 425,00, the second Tk 360,000 and the third Tk 315,000. The minimum price of Hajj trips through private agencies was set at Tk 358,000.
Pakistan Hajj 2022 cost is twice higher than 2019 Hajj (or about 4,938.27 United States Dollar). This year’s Hajj fare in Pakistan exceeds Rs. 1 million (4,938.27 United States Dollar), which will make it the most expensive pilgrimage for Pakistanis to date.
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According to Pakistan’s Minister in Charge of Religious affairs, the government-funded Hajj is expected to cost up to Rs. 1 million or more, indicating an increase of up to 42.85 percent from the previous cost of Rs. 0.7 million announced earlier this year.
Similarly, private Hajj in Pakistan cost more than Rs. 1.2 million (5,925.93 United States Dollar).
Out of the 81,132 pilgrims allocated to Pakistan, only 57,593 pilgrims have completed payment as at press time.
Interestingly, the country’s Ministry of Religious Affairs further announced that 40 percent of the pilgrims will perform Hajj at the expense of the government and 60 percent will do so on their own –meaning that 40 percent of the pilgrims will receive subsidy while 60 percent will perform Hajj at its full cost.
After facing severe criticism from the masses for projecting government-funded Hajj expenses between Rs 0.750 million and Rs 1 million, Pakistan Government later brought down Hajj 2022 expenses to below Rs 650,000.
This was done after serious renegotiation with Saudi Arabia Government. For example, Pakistan had to hire residential buildings in Makkah at the rate of 2,100 Saudi riyals against the rate of 3,600 riyals paid in 2019 by the previous government. It also rent buildings in Madinah at 720 riyals against the rate of 2,100 riyals paid in 2019.
This year, Malaysia increased 2022 Hajj fare by 1,000 Malaysia Riggit. While announcing the increase, the Malaysia LEMBAGA Tabung Haji (TH) said the Hajj payment rate for Muassasah B40 category pilgrims is RM10,980 per person (RM1,000 increase). Meanwhile, the Hajj payment rate for non-B40 category Muassasah pilgrims is RM12,980 per person – RM3,000 increase or an average of 2.3% per year. TH said the estimated cost of performing Hajj for the Muassasah pilgrimage at RM25,540 per person.
However, the Malysian Tambug Hajj subsidized Hajj fare every year for its contributors. For example, TH Hajj Financial Assistance for category B40 is RM14,560 per person (57%), while for other categories is RM12,560 per person (49%) as compared to RM12,920 per person in 2019 (56%). He explained that about the targeted financial assistance for Hajj is in line with the Government’s intention and goal to maintain the policy of providing subsidies directly to the needy and low-income groups.
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TH MD and CEO, Datuk Seri Amrin Awalluddin, clarified that the increase in Hajj Fee this year was inevitable due to the increase in several costs, including inflation, various taxes especially Value Added Tax (VAT) and Hajj visa charges as well as insurance coverage for COVID-19 pandemic imposed by the Saudi Arabian government.
“Saudi Arabia’s VAT tax has been increased from 5% to 15% and this is a major factor in the increase in the cost of Hajj and caused the cost of Hajj to increase by more than RM2,500 for a Muassasah pilgrim,” he said.
Previously in 2019, the Hajj Fee was RM9,980 (44%) while the TH Hajj Financial Assistance was RM12,920 (56%) per person to cover the actual cost of performing Hajj of RM22,900. The cost of performing Hajj has increased in Malaysia by 139% from 2001 to 2019.
“The cost of performing Hajj or Hajj Cost is the direct costs that need to be spent for a person to perform Hajj including flight, accommodation, transport, food, payment of the authorities – in 2019 it is RM22, 900,” he said.
Malaysian pilgrims get more than 50% subsidy from the state’s Hajj fund. Thus, a Malaysian pilgrim actually pays around half the amount a Bangladeshi pilgrim pays because Bangladesh government does not provide any subsidy to Hajj pilgrims.
IRAN Subsidizes Hajj fare by $3,300 for each pilgrim
The Government of Iran has over the years kept the actual cost of performing Hajj in the secret box due to public anger over the generous subsidy offered to intending pilgrims. The Iranian government approved a generous plan estimated to cost over $3,000 — in local currency at rates far below the open market for Hajj 2022 pilgrims.
Apart from the subsidies, there is also an extra approved sum of $200 per pilgrim as travel expenses which is also sold below the open market rate. As of March 5, 2022, the US dollar in Iran cost around 130,000 rials in the open market and that is over three times the official rate that stood at 42,000 rials for almost a year now.
According to Alireza Rashidian, the head of Iran’s Hajj and Pilgrimage Organization, the subsidized rate offered to pilgrims will be just over half that on the open market, or 70,000 rials per dollar.
The cost of performing Hajj by Indonesian pilgrims this year has increased to 39.89 million rupiah (RM1 = 3,394 rupiah) from 35.2 million rupiah in 2019.
The Spokeperson for Indonesia Ministry of Religious Affairs, Yaqut Cholil Qoumas, in a statement said the amount covers the cost of flights, living expenses, visas and part of the cost of accommodation in Makkah and Madinah.
Hajj packages from India this year ranges from INR ₹330,000 to ₹370,000 (USD $4,421 to $4957), depending on the state which the pilgrim is departing from. The government’s 40-day package tour costs around ₹3,70,000.
“Before lockdown, a 15-day Umrah package cost ₹60,000, while the same package now cost about ₹1,15,000.
Mr Ahmed, the head of private operators in India, said most of the inflation has been due to high air ticket prices. According to him, a return ticket to Saudi Arabia used to cost around ₹30,000 and now it has gone up to ₹60,000.”
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In India, the cheapest Hajj Package this year, also known as the Economy Non-shifting package, is around INR 6,42,000. The name itself determines the package itinerary for the pilgrims opting for it.
Moroccan Pilgrims To Pay $6,405 to Perform Hajj in 2022
Moroccans who are to perform this year’s Hajj will have to pay MAD 63,000 ($6,405) or (about N2,485,140). The cost does not include personal expenses (Exclude Basic Travelling Allowance).
What makes it difficult for Moroccan pilgrims is that they are to deposit the amount of the expenses in “one go at a bank postal agency” within five days deadlines.
In 2019, Moroccan pilgrims paid MAD 49,906 ($5,010) excluding pilgrims’ personal expenses.
In the United States, the average cost of Hajj ranges from around $6,000 to $13,000, but could go up to $15,000 for a more luxurious Hajj.
For example, Haram Tours Hajj & Umrah offers packages with rates ranging from $6,300 to $12,500 per person, while the duration of stay is from 14 to 21 days.
There are different agencies that offer Hajj packages based on the number of days of stay, and the dates of flight and departure. But most of them include round-trip airfare, accommodation, food and drinks, transportation to and from the holy city.
First batch of Iranian Hajj Pilgrims to depart for Saudi Arabia on June 13
Let’s take a look at the sample price from Cordoba Tours in Ozone Park, New York, for their Hajj packages: The total package cost ranges from $7,500 to $8,000 (depending on the number of people sharing the provided accommodation). This package includes the following:
Accommodation: 4 in a room is $7,500, 3 in a room: $7,800 (in Madinah only), 2 in a room: $8,000 (in Madinah only).
NAHCON had earlier announced a projected Hajj fare of N2.5 million with a provision for $800 BTA. In 2019, the cost of performing Hajj was within N1.5 million. Though in 2019, the exchange rate was N306 as against the current N410 to a dollar. It is instructive to note that 85-90 percent of Hajj cost components is in dollars.
It is also instructive to note that every service rendered to a pilgrim in Saudi Arabia is paid for by the pilgrim in dollars. Airlift of pilgrims, accommodation, car syndicates services are subjected to the rules and regulations issued every year by the Saudi Government. No one, including NAHCON, has control over dollar except the Federal Government of Nigeria.
We must also realize that Hajj fares have been on the increase since the establishment of NAHCON. However, the federal government concessionary exchange rate regime has helped in cushioning the effects. Another factor is that service providers are Saudi-based.
Also the costs of some services in Saudi Arabia have been increased by over 200 percent. Between 2009 and 2016, Hajj fares went up by over a hundred percent. Minimum 2009 Hajj fares (with US$750 was N470,737.38 for Northern region and N477,558.88 for Southern region. In 2016, with the concessionary rate of N197 to US$1, the minimum fares for North was N998,248.92 and N1,047,498.92 for South. In 2012, Hajj fares were based on concessionary exchange rate support of N145. North paid N613,644.52 (minimum) and South N620,967.19.
In 2013, pilgrims from the Northern departure zones paid N636,496.52 (minimum), South N643,869.52. But the 2014 Hajj fares with exchange rate of N150 to US$1 was N636,061.77 (minimum) for North and N639,636.77 for South.
The 2015 Hajj fare in dollar computation was US$4,721.93 which was equal to about N766,557.00 with exchange rate of N160 to US$1. In 2016, the total dollar component was US$5,077, in addition to US$750 BTA at N197 official exchange rate which was equal to N1,008,911. For 2017, the total dollar component is $4,839 with US$800 BTA at the official exchange rate of N305, making N1.511,223. With the addition of various local administrative charges by each state, Ondo State has the lowest fare of N1,485,095.07, while Oyo State has the highest of N1,584,069.02. It is to be noted that in an effort to curb extraordinary charges by individual states, NAHCON invited them to defend all additional charges.
These charges and the differences in Makkah accommodation prices (as against for flat benchmark) are responsible for the differences in the fares from state to state.
Reproduce below is the hajj fare from 1996 to 2017 to capture the rise in Hajj fare over the years
1996: N121,752.02, 1997:N146,318.60, 1998:N135,520.00, 1999:N131,319,75, 2000:N122,292.00, 2001:N187,322.38, 2002:N219,742.20, 2003:N248,819.36, 2004:N258,494.74, 2005:N263,338.49, 2006:N297,140.40, 2007:N352,826.40, 2008:N417,832.92, 2009:N472,736.38, 2010:N483,879.83, 2011:N521,749.75, 2012:N616,644.69, 2013:N639,496.52, 2014:N689,061.77, 2015:N723,476.57, 2016:N1,018,068.90 and 2017:N1,498,502.70.
Because of these increases in the cost of performing Hajj, the number of pilgrims have continued to decrease globally in the last 10 years.
A report in the Saudi Gazette Newspaper dated 16th September 2016, stated that “the number of foreign and domestic pilgrims has come down during the past 10 years. In 2007, more than 1.7 million foreign and 746,511 domestic pilgrims performed Hajj, making a total of more than 2.4 million pilgrims.
“In 2012, more than 3 million pilgrims performed Hajj, the highest in the last 10 years.”
However in 2016, 1,325,372 foreign and 537,537 domestic pilgrims performed Hajj, making a total of 1,862,909 pilgrims. This is the least number of pilgrims in the last 10 years.”
The above statistics shows that the decrease in number of pilgrims cut across 165 Hajj participating countries and the trend seems to be ongoing.
For example, Indonesia as the most populous Muslim nation got the highest Hajj seat allocation in the last 10 years. There were 220,200 Indonesian pilgrims that performed 2016 Hajj – the highest number of foreign pilgrims in the last 10 years.
However, Indonesia has experienced the same shortfall when her currency, Rupiah, fell to the dollar between 2011 to 2015. By then, 1 dollar exchange for 19,395.75 Indonesia rupiah.
In 2011, 199,085 Indonesians performed Hajj but the figure fell to 192,029 in 2012. In 2013, it further dropped to 154,055 and in 2015 Indonesian pilgrims depleted further to 154,046 pilgrims.
It is noteworthy that Indonesia and Malaysia operate a minimum of three years Hajj rolling plan that allowed intending hujaj in those countries to begin making payment three years in advance. This has eased their plan in terms of filling up their quotas, providing accommodation and other logistics for their pilgrims in the Holly land and ultimately evading possible exchange rate crises as experienced recently.
Here, it is important to note that VAT affects the commodities and consumables that pilgrims will purchase in Saudi Arabia. Many Umrah pilgrims who visited Saudi Arabia recently attested to the high cost of commodities in the Kingdom.
This notwithstanding, it is late for NAHCON to make a case for Federal Government intervention on broad diplomatic and humanitarian grounds. For instance, the FGN could ease the exchange rate for the pilgrims and on domestic VAT to cushion the high cost of Hajj.
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