No one ever expected it, as it has never happened in recent years. But the signals were glaring that the ravaging Coronavirus pandemic disrupting lifestyles and businesses globally might impact the conduct of Hajj 2020. And it is no longer news that countries of the world will not be able to perform the yearly hajj rites in Saudi Arabia this year.
The Saudi authority has prohibited international visitors from making Hajj this year in an effort to contain the spread of COVID-19.
Only a limited number of people already residing in the Kingdom would be allowed to observe the hajj exercise, according to the Saudi Arabia Ministry of Hajj and Umrah.
For Saudi Arabia, the implications of the policy are grave, as loss of revenue from Hajj and Umrah are estimated at about $12 billion. About two million people were expected to visit Makkah and Madinah for the yearly exercise, scheduled to take place from July 28 to August 2, 2020, but the gathering has been drastically reduced, the same way people were bared from observing Umrah in the wake of COVID-19 last February.
Already, Hajj operators in Nigeria are now worried about the fate of their investments, as some have booked tickets with airlines; did hotel reservations and paid bills to other service providers in Saudi Arabia in advance.
This is even as air carriers and casual workers count their losses in billions of naira due to the exclusion of foreign pilgrims. Many workers of the operators have lost their jobs, as the businesses grind into recession.
Indeed, the Saudi Arabia’s resolution to bar foreign pilgrims for the 2020 Hajj exercise has inflicted huge loss of economic values.
Beyond the spiritual embodiment of hajj, the yearly spiritual exercise provides millions of business opportunities and significantly boosts several sectors of the economy.
About 95,000 Nigerians as earlier allocated by Saudi Authorities would not be visiting the holy cities of Makkah and Medina in fulfillment of their religious rites due to the restriction order. Saudi Ministry of Hajj explained that the decision to restrict 2020 hajj participants to residents in Saudi alone was carefully considered as part of precautionary measures to mitigate the spread of the deadly virus.
Apart from thousands of Muslims who would lose the opportunity to perform the 2020 hajj after fulfilling the financial and other obligations required for the journey, active stakeholders in the tourism industry including tour operators, airliners, hajj entrepreneurs and casual workers could not hide their disappointment and collateral loss over the development.
Vice President (SouthWest), Association of Hajj and Umrah Tour Operators of Nigeria (AHUON), Alhaji Qasim Alabi, told The Guardian that the development came with a big blow on all stakeholders in the Hajj and Umrah tour value chain.
Alabi, who is also CEO, Habdat Xpress Travels declared that the cancellation of international travels by all nations has crippled their businesses for about four months when the airports were shut.
He said: “We have been recording loss for about four months now because airspaces across the world have been closed. No flights from anywhere in the world, only for some limited cases.
“On the hajj matter, many of us have booked tickets with some airlines, while we have made agreements with the Saudi Arabian service providers. Now, all the funds are trapped with them. Many of them have promised to refund, but the issue is, when are we going to get the refund.
“In the aviation area, many airlines are giving us two options of either to get refund or defer the ticket, which would be made valid for the next one or two years. The airlines are equally cash-trapped, so it is going to take a longer time to get refund from them.
“For the intending pilgrims, we also have two options: whoever wants refund can make arrangements, we will source for money elsewhere and refund them. Also, we are people of integrity, you can keep your money with us and use it for the same purpose next year,” he explained.
However, Alabi said it would be more profitable for intending pilgrims who kept his money with the operators, going by the fact that Saudi Arabia might increase tax and other charges next year, but this category of people would not need to add extra money.
“We must all accept this as an act of God, and move forward,” he said.
However, the cancellation has not only crippled the annual N20b cash flow during hajj, but also slummed the regular Umrah business running into billions of naira.
AHUON Vice President (North), Alhaji Abdulazeez Halilu, who regretted the unfortunate incidence that compelled the decision of Saudi Arabia to restrict foreign pilgrims, lamented the massive economic damage occasioned by the development.
He said business activities of travel agents had collapsed since the kingdom suspended issuance of visas for lesser hajj in the last three months.
Abdulazeez, who is also the Chairman, Kano zone of the association, urged the Federal Government to consider travel agencies for financial palliatives to enable the operators restart their battered business.
“For those of us in the multi-billion hajj business, it is a collateral economic break down. I can say our economy is in total recess as I speak, because everything is grounded. In fact, we are not surprised by the cancellation of hajj, because we envisaged such possibility. The reason is that, hajj is a serious business and any action and decision is timely and since the Saudi declined to speak right from the onset, we knew it would turn out this way. For us, we have started recording billions of naira loss three months after the suspension of Umrah, which is our main stable business.
“Umrah is not seasonal like hajj. Many of us have sacked our staff because we cannot keep them idle. In naira and kobo, I will say the zone has cumulatively recorded over N100b loss. As for hajj, it is about N20b. Many of our members had invested in securing accommodation, flight tickets when it was cheap, and made payment for several other facilities with the hope of recovering them easily during hajj. It is unfortunate we are not allowed to perform the pilgrimage,” he explained.
Besides, the aviation industry is not left out of the economic slump as two airliners already screened to airlift pilgrims for 2020 hajj may have lost about N40b revenue.
Late last year, AZMAN Air Limited, a Kano-based domestic flight operator launched two brand new A340-600 Airbus with capacity of 400 passengers to commence hajj and umrah operations.
Assistant Manager AZMAN Air, Alhaji Nurudeen Aliyu, told The Guardian that the cancellation of 2020 hajj has cost AZMAN a loss running into billions of naira.
“The cancellation has a serious adverse effect on us at AZMAN, even though the reason, due to COVID-19 pandemic, is understandable. But, to us at AZMAN, it is a huge investment lost. You will record we purchased two new aircrafts last year running into N13b for the purpose of the 2020 hajj and umrah exercise. Apart from that, AZMAN air underwent a series of preparation and spent millions of naira to meet the requirement and international standard. Again, we employed foreign staff, pilots, crew staff, technical support personnel and engineers to effectively function. This employment also runs into millions of naira. But we have decided to retain some, especially engineers and crew for our domestic flight, but the pilots have to return to their countries.”
Although efforts to speak with management of Max Air, another Kano-based airline and one of the accredited carriers for hajj and umrah in the last four years, was not successful, The Guardian learnt the airline loss also runs into billion of naira due to exclusion of foreign travelers from Hajj 2020.
“For 2019 hajj operation, Max Air was allocated 35,000 slots and most likely retained such allocation in 2020 all things being equal. The quotation of the return ticket submitted to NAHCON during bidding this year was $1,700. And if you consider the value of dollars today in the market, it should be about N450 to $1, that means a return ticket for a pilgrim is about N760,000 unlike N550,000 paid in 2019. Cumulatively, you can say Max Air could be running into N26b loss,” a reliable source revealed.
More so, hundreds of casual workers that earn substantial means of livelihood during hajj session would also lose such opportunity. Apart from regular staff, pilgrim welfare boards usually engage hundreds of personnel on contract basis to facilitate smooth running of the exercise. Small-scale businesses at hajj camps, airport, and various strategic areas where pilgrims carry out activities during preparation to and when returning from hajj will naturally collapse this year.
However, the Chairman of National Hajj Commission of Nigeria (NAHCON), Barrister Zikrullah Kunle Hassan disclosed that pilgrims have the choice to defer deposits made for 2020 hajj to next year. He stressed that refund would be made to anyone willing to recover their initial fare deposits. Barrister Zikrullah, who believes the decision of Saudi Arabia government to limit participants for 2020 hajj was in the best interest of humanity despite the inconveniences such a decision might have triggered.
According to him, “For us at hajj commission, the Saudi Arabia’s decision did not take us by surprise, because we have been in constant touch with the relevant authorities and we have been monitoring the development. The truth is that as part of regard, the Saudi Ministry of Hajj and Umrah had informed the commission before they officially dropped the news. And the commission had also drawn the attention of all stakeholders and state welfare boards as well as the leadership of tour operators about the development before now.
“Yes, the majority of us are not happy about the development, but at the same time, we believed it was the right decision to make, because COVID-19 pandemic is still very much around and saving the lives of pilgrims is very important while at the holy land. And for the pilgrims, we can always assure them that their deposits are very much intact and will be refunded to them if it is their desire and if they choose to keep the money against 2021, NAHCON can assure their interest is protected. So, for those who preferred refund, they can get their money in quick time,” Zikrullah reassured.
Certainly, the impact of barring international pilgrims will be felt more by the host country. However, it is believed that the decision would help Saudi Arabia make plans for social distancing that will keep people safe.
As at Thursday, the Kingdom had recorded 170,639 cases of infection and 1,428 deaths. The figure of recovered stood at 117,882. It lifted a nationwide lockdown on June 21.
Earlier this month, Indonesia was one of the countries to withdraw from the 2020 pilgrimage. Senegal, Malaysia and Singapore followed suit with similar announcements.
It was gathered that any loss of revenue from the pilgrimage sector always puts economic strain on the Kingdom, which has already been hit with the twin shocks of low oil prices and the pandemic.
In May, the oil-rich nation had tripled its Value-Added Tax (VAT) as part of austerity measures to support its pandemic-hit economy.
Even though the majority of Saudi Arabia’s wealth comes from oil, pilgrims visiting Makkah and Madinah are critical to its economy.
The Kingdom hosted more than 19 million pilgrims for Umrah and 2.5 million pilgrims for Hajj in 2019. Combined, they contributed approximately $12 billion, or seven per cent of total GDP and 20 percent of its non-oil GDP.
Excluding international pilgrims this year will also affect Riyadh’s Vision 2030 as the government identified pilgrimage industry as a pillar of economic diversification and targeted it for private investment.
For years, Hajj and Umrah have remained essential to the country’s tourism growth strategy, as the Kingdom envisions increment in the overall capacity for inbound hajj visitors from 1.8 million in 2019 to 4.5 million by 2030, and inbound umrah visitors from 6.2 million in 2019 to 30 million by 2030.
Source: The Guardian