Hajj Season Boosts Saudi POS Spending to $3 Billion

The Hajj season makes the occupancy rate of hotels around Mecca and Medina increase drastically. Such as the Zamzam Clock Tower superblock near the Grand Mosque, which is a place for hotels with stars. (Wikimedia Commons -  King Eliot)

JAKARTA - The Hajj season is starting to feel in Saudi Arabia's cash registers. Total point-of-sale or POS transactions reached 12.1 billion Saudi riyals, or about 3.2 billion US dollars, in the week ending April 25.

According to an Arab News report quoted on Saturday, May 2, the increase mainly came from the hotel sector. Saudi Central Bank data showed that hotel spending jumped 40.3 percent to 331.9 million Saudi riyals. The number of transactions increased by 20.9 percent to 859,000 transactions.

The encouragement came as pilgrims from various countries began to arrive. Pilgrims from Pakistan, India, and Turkey have entered Saudi Arabia since mid-April.

Makkah also recorded a spike. The main city for the implementation of the hajj pilgrimage recorded a 28.5 percent increase in spending during the monitoring week.

Crown Prince Mohammed bin Salman in a cabinet meeting on April 21 ordered all resources to be deployed to succeed the organization, security, and prevention plans for this year's hajj season.

Although Hajj boosted hotels and Makkah, total Saudi POS spending still fell 1.9 percent on a weekly basis. The decline was smaller than the previous week which reached 7.9 percent. For seven days until April 25, the number of transactions reached 225.2 million.

Airline spending rose 4.6 percent to 43.2 million Saudi riyals. Freight and courier services grew 11.7 percent to 45 million Saudi riyals.

However, food and beverage spending fell 4.8 percent to 1.9 billion Saudi riyals, although it still accounted for the largest share of POS transactions. Restaurants and cafes also fell 3.1 percent to 1.61 billion Saudi riyals.

Clothing spending weakened slightly by 0.5 percent to 902.6 million riyals. This category became the third largest share in POS activity that week.

Riyadh is still the largest contributor to POS spending, but its value fell 2.6 percent to 4.26 billion Saudi riyals. The number of transactions in the capital reached 73.9 million, down 2.2 percent.

In Jeddah, transaction value fell 0.6 percent to 1.68 billion Saudi riyals. Dammam also fell 3.1 percent to 630.4 million Saudi riyals.

POS data monitored weekly by SAMA is a marker of consumer spending trends and growth of digital payments in Saudi Arabia. The data also shows that the POS network is expanding to small cities and the service sector, in line with the Saudi Vision 2030 digital economy agenda.