We let apartments, so take the recommendation with that in mind. Here is the comparison written as honestly as we can manage — including the cases where you should book a hotel instead.
Walking to the Haram matters more than anything else. If you want to be there for every prayer, including at three in the morning, nothing outside the inner ring will do. Book a hotel in that ring, pay the premium, and accept the room size. No apartment in Makkah gives you that, ours included.
There are one or two of you on a short trip. The economics of an apartment come from space you are not using. A couple on a four-night Umrah is usually better off in a hotel room.
You want daily housekeeping, a reception desk and room service. Those are hotel services, and we do not pretend to offer them. Our check-in is self-service, and once you are in, the apartment is yours undisturbed until you leave.
You are travelling as a family or a group. This is the real dividing line. Families arriving in Makkah routinely expect to split across two or three hotel rooms — parents in one, children in another, grandparents in a third, everyone messaging each other about when to leave. A four-bedroom apartment sleeps nine with a living room they can all sit in together, for less than those rooms cost.
You want to cook. Two weeks of eating out with children is expensive and, by about day four, miserable. A kitchen with an oven and real worktop space changes the trip, particularly for anyone with dietary needs, a baby to feed, or an older relative who simply wants their own food.
You are staying more than a few days. The longer the stay, the more the hotel room shrinks and the more the nightly difference compounds.
You want somewhere that feels like a home between prayers. Umrah is physically demanding, particularly in Ramadan. Coming back to a living room rather than a corridor of separate rooms is worth more than most people expect before they have tried it.
What you give up is proximity. Ours are 5.7 and 6.2 km by road from the Haram, which is 15 to 25 minutes by car, and every trip is a taxi at roughly SAR 25 to 35 each way. Budget that in: for a family making two trips a day over ten days, it is real money, though still far less than the hotel premium it replaces.
What you should not give up is honesty about it, which is why we publish the actual road distance and explain why nothing of this standard sits closer, rather than quoting the flattering straight-line figure most listings use.