By Asma Alsharif

JEDDAH, July 8 (Reuters Life!) - Swine flu fears and the global economic crisis are taking their toll on bookings at hotels in the city of Mecca, two months before the start of a minor pilgrimage that attracts up to 2 million Muslim pilgrims.

Umra can be performed anytime of the year but most prefer to do it during the last 10 days of the fasting month of Ramadan, which will be around September 10-20 this year.

The haj season which falls in November this year attracts some 3 million pilgrims.

At Ajyad Hotel, favoured for its proximity to the Grand Mosque and the cube-shaped Kaaba building at its centre, bookings for Ramadan's Umra are down 60 percent.

'Last year, at around this time, our booking was 100 percent,' said Ayad Ali Al-Sharif, a reservation desk employee.

'I think this is due to the financial crisis and the spread of illnesses,' he added noting that the hotel could end up lowering prices when the Umra draws closer.

Ajyad is among several hotels that have been erected near the Grand Mosque some of which are operated by major firms such as Hilton and the Intercontinental Hotels Group.

An employee at the Intercontinental's Dar Al-Tawhid's Hotel said bookings made for the first half of Ramadan point to an occupancy rate of 50 percent.

Saudi Health Minister Abdullah al-Rabeeah has urged elderly, ill and other unfit Muslims to postpone pilgrimages as the kingdom tries to prevent a large-scale spread of the H1N1 flu.

The Gulf Arab state has so far declared 137 cases of H1N1, a large proportion of which it says have been cured.

Last month, Tunisia announced the suspension of travel by its pilgrims to Mecca for the Umra pilgrimage.

Family-owned Al-Kattan Group, which owns four hotels in Mecca, has so far confirmed bookings for only half its rooms.

'Around this time last year, we had 75 to 80 percent of the bookings confirmed but this year most of the people are booking just by their names and without deposits,' said Khalid al-Kattan, the group's vice president.

'This is a big deal for us. Some pilgrims say their country will cancel (main pilgrimage) haj ... I will keep my fingers crossed,' he said.

Some travel agents, hungry for higher margins, could be deferring bookings so that hotels lower prices, he said.

Hosni Bustaji, head of the government's pilgrim delegations affairs, declined to comment.

Makkah Hotel Company, which has 409 rooms, has reached 85 percent occupancy rate against 100 percent a year earlier, said Turki Monshi, a reservation desk employee at the hotel.

The 176-room Khaleej Hotel has so far confirmed bookings for only 40 percent of its rooms against 80 percent a year earlier, said Adel Al-Sayed, the hotel's marketing manager.

'This is partly due to the swine flu and partly to the economic crisis.'

(Writing by Souhail Karam, Editing by Paul Casciato) Keywords: MUSLIM FLU/MECCA

(souhail.karam@reuters.com, +966 1 463 2603; Reuters Messaging: souhail.karam.reuters.com@reuters.net)

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