Hajj services companies — a new sector to watch

As a key economic driver and a major cornerstone of the non-oil sector, the continuous development of Hajj and Umrah organizations and services is among the top priorities of the Saudi government’s vision. The Kingdom’s economic blueprint for 2030 includes plans to further enhance the services offered to visitors undertaking Hajj and Umrah, including increasing the capacity to accommodate up to 30 million pilgrims per year by 2030.

Since the end of the COVID-19 era, the Saudi government has taken significant steps to enhance the Hajj and Umrah experience. These measures include the implementation of digital transformation and artificial intelligence to facilitate the movement of worshipers and visitors to holy sites, the introduction of initiatives such as providing each child with a bracelet containing personal information in case of getting lost, granting women the ability to perform Umrah without the company of a male companion, and, most importantly, improving the business model of the multi-generational-owned Hajj and Umrah service providers, known as Arbab Al-Tawafah, as they have been referred to for many years.

The newly transformed Hajj services sector is set to adopt a more institutional track with corporate governance and transparency, aligning with the Saudi government’s vision to deliver the highest quality services to all pilgrims.

At BMG Financial Group, we have been conducting numerous workshops aimed at educating owners and managers of family-owned businesses on the intricacies of the initial public offering journey and its associated readiness requirements. Recently, we had the honor of hosting senior executives from Arbab Al-Tawafah at our Jeddah offices. This workshop served as both a knowledge-sharing session on the dynamics of this sector and an educational opportunity to delve into the business model specific to Arbab Al-Tawafah.

After meeting with executives from various companies and discussing their IPO journeys, the Mutawfis for Pilgrims from African Non-Arab Countries Co. became the first candidate to complete the initial step of signing a mandate. Following their participation in our workshop, several meetings occurred to comprehend the benefits and advantages of going public. These sessions involved senior executives, including the board of directors led by chairman Ahmed Sindi. This experience was exceptionally educational for us, given the novelty of this sector and the absence of benchmarks. My team and I underwent a rapid learning curve regarding the business models of these companies, the backgrounds of their international clients, their challenges and the unwavering support of the Ministry of Hajj and Umrah.

The newly transformed Hajj services sector is set to adopt a more institutional track with corporate governance and transparency, aligning with the Saudi government’s vision to deliver the highest quality services to all pilgrims. Going public marks the initial step in this transformative journey, and Hajj services companies are poised to become a notable sector in the Saudi capital market in the coming years.

Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.