ALMOST every member of the small group of hajis that I formed an acquaintance with seemed to have paid a slightly

different rate for the pilgrimage package we had purchased. Though there were small variations (the numbers sharing a room etc) the price difference was not commensurate with the variations in packages. They seemed to be more tied to when a pilgrim applied, through which source and to any previous connection with the group itself. The variation in price, with small differences in service, was even more prominent across groups. Again, on the surface at least, it seemed that the differences reflected bargaining power rather than differences in services. Though the latter factor was cited to justify price differences, there appeared to be too much arbitrariness involved. Where the price differential was large (between categories) there were differences in services (air-conditioned accommodation, food catering, foam bed in Mina) but even then there was no indication of how the price differential was linked to difference in service. This is not uncommon in markets where information is quite asymmetric. Private Haj operators offer different packages, and there are many providers. It is difficult to ascertain the reputation of these operators, except for some of the older and more established ones. Most of the time information is available only through word of mouth and from insiders. Since, for many people, Haj is a once in a lifetime experience, and the cost of the enterprise is steep, especially if one plans to travel with family, choosing an operator is akin to a game of Russian roulette. Many have suffered the consequences. The absence of a uniform price indicates information asymmetry or price discrimination. Since the negotiation process ends up as a two-person bargaining game, between the agent of the company and the prospective haji, there is some deliberate price discrimination that goes on. But since the odds are stacked against the prospective haji, most of the power lies with the tour operator. The haji does not know the cost of most things that are to be provided by the tour operator. He or she does not know the share of the mualim, the cost of food in Saudi Arabia, the cost of hotels, rental for buildings, cost of transportation and all of these at the time of the annual pilgrimage. Even if the prospective haji could spend some time on the internet to try and estimate these costs, the estimates would be rough. As first-timers, most prospective Haj pilgrims also do not know what all they need for Haj for the stay at Mina, Arafat and Muzalfah, and for the period before and after Haj. The operator can always sell a sofa cum bed as a necessary item for the stay in Mina, for a certain price, whether or not it is essential.

Elasticity of demand for Haj is low few people will opt out of the journey. It is not only one of the five pillars of Islam and a religious duty, many consider a trip to Makkah and Madina to be among the crowning moments of their lives. If they have the resources, or if they can put them together somehow, people are bound to make the trip. Knowing this, the tour operators are able to bargain even harder. The government does have some guidelines on what tour operators can charge and what they can charge for, but these are flouted quite blatantly. A number of hajis mentioned that they were asked by their tour operators to quote a certain figure to Customs or immigration or officials of other government departments at the airport in case they were asked questions about how much they had paid. The amount quoted was, invariably, smaller than what they had actually paid. And in some cases, the difference in the amount quoted and the amount paid was quite substantial. Should a spiritual journey such as Haj really be a time for making money? And even if so, should the returns be left to the market or should there be stronger regulation and transparency in the transaction? There is definitely a role for the government here given that it is hard for ordinary citizens to know all the costs that the tour operators incur. Since Haj is a religious obligation for Muslims, the requirements for transparency and regulation should be more stringent. What should be ensured is that more and more people can afford the trip and be given reasonable facilities. Most tour operators in this business also manage umrah travel. Since umrah is not obligatory, one could have, as a policy, fewer restrictions on profit rates and lower transparency requirements for this pilgrimage. But Haj travel definitely needs more regulation. There is also the problem of some tour operators not delivering on the promises they make to prospective pilgrims. But that aspect can be left to either the Haj ministry to probe and take administrative action on, when complaints come in, or to the courts to take on cases where there has been deception. Given the nature of the journey, most hajis are likely to be more forgiving towards operators and reluctant to take them to the cleaners, but with reasonable regulations in place, hajis can decide the course of action they want to take. As said earlier, Haj is a religious obligation and those who can afford to, and who want to, will go to great lengths to undertake the journey. But this should not be a reason for allowing their potential or actual exploitation by those who are supposed to assist and organise. The current regulatory environment is too lax and a substantial rethink and tightening of regulations is needed. The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.