This year, Lembaga Tabung Haji (TH), Malaysia’s pilgrims fund board
that is subsidised by the government to make Hajj more affordable,
announced that its packages have increased an average of 2.3% each year.
In explaining this, TH group managing director and CEO Amrin
Awalluddin said this was inevitable. “Saudi Arabia’s VAT tax has
increased from 5% to 15% and this is a major factor in the increase in
the cost of Hajj.”
This year, pilgrims are expected to pay between RM10,980 (US$2,380)
per person (for pilgrims from B40 households that have an income of
below RM4,850) to RM30,850 (US$6,690) per person (for those from non-B40
households).
Meanwhile, private operators estimate that hefty service cost
increases have driven Hajj package prices up by approximately 25-30%
this year. “The main reason for the increase of the Hajj package is due
to the hike in Saudi Arabia service costs, e.g., hotel, transportation,
ground handling and manpower services, etc.,” said Mohd Khairi bin Mat
Jahya, chairman of MKM Ticketing Travel & Tours Sdn Bhd that
specialises in Hajj and Umrah.
The stronger SAR vis-a-vis a weakening Malaysian ringgit in 2023 is
yet another cost factor. Industry insiders project that Hajj costs and
fares will rise further if the Malaysian currency continues to decline
against the SAR.
Managing cost uncertainties and locking in prices are essential to
mitigate business risks for tour operators. “We have taken various
initiatives to curb the rise in Hajj package prices through establishing
and committing to commercial relations and agreements with service
providers in Saudi Arabia much earlier to ensure the cost would not
continue to rise,” Khairi added.
Nevertheless, rising costs will not deter millions of Muslims from
around the world from performing the Hajj. This last pillar of the
Islamic faith is obligatory for a Muslim, at least once in their
lifetime, provided they are financially able and healthy to make the
arduous journey.
“Regardless of the challenges, pilgrims will continue to flock to
Makkah as they see this as the greatest, most important sacrifice,” said
Hussain Yee, president of Al Khaadem, who has been leading pilgrims to
Hajj since the 1980s.