Last year the United Nations added Jeddah to its UNESCO global heritage list, acknowledging its distinctive architecture, which evolved from the city's centuries-old role as a global trading hub and the gateway for pilgrims visiting Islam's holiest sites.
The cultural festival that began on June 18, the first day of the fasting month of Ramadan, coincides with a broader tourism drive in Saudi Arabia.
The kingdom is targeting its own citizens as well as the millions of Muslims from around the world who undertake religious visits.
"We wanted to bring life back to this area after its people had abandoned it, and we achieved that," Jeddah's Deputy Governor Mohammed al-Wafi told AFP among the festival crowds.
He said a number of homes in the old quarter had already been renovated, but much work still needs to be done in the historic heart of the kingdom's second-largest city.
Among old Jeddah's most famous attractions is the Sharbatly House, made of coral, where legendary British First World War intelligence officer T.E. Lawrence stayed in 1917.
Like other buildings in the district, which also includes centuries-old mosques, it fell into disrepair before the quarter's UNESCO listing began to spark a revival.
Sami Nawar, head of the historic area known to residents as Al-Balad, said several prominent families are among those who have reconstructed homes at their own expense, and more than 700 restoration licences have been granted over the last five years.
Tourism and finance ministry officials are looking at how to help other owners fund their renovations, possibly through loans, Nawar said.
- Rare traditional architecture -
In its decision last year, UNESCO noted the importance of the "reduction of the rate of decay of the historic houses, which are often abandoned and squatted (in) by poor immigrants".
While warning "negative development" could jeopardise the area's character, it foresaw "a new virtuous circle" thanks to renovation projects and involvement of homeowners and merchants, like Maha Baeshn.
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Baeshn, an artist and poet, said the Ramadan festival encouraged her and other homeowners to take better care of their properties.
"The Jeddah festival brought life to the houses and the area," she said.
The homes, some of them rising multiple storeys, are built of rock and wood, with decorated facades and large bay windows known as rawashin to help air circulate. This has the added benefit of creating cooling shadows for people outside.
UNESCO said the design and function of the homes reflected their adaptation to the humid local climate and to Jeddah's prominence as a trading and religious centre.
They also include ground floor offices and commercial outlets, and rooms rented for pilgrims.
Only "scant vestiges" of this Red Sea architectural tradition survive outside of Saudi Arabia, UNESCO said.
- A sweet history -
Along alleys between the houses, the Ramadan festival features about 80 shops and stalls and a dozen restaurants -- all usually staffed by locals -- representing traditional trades and delicacies from the coastal Hejaz region around Jeddah.
"We have been running this business as a family for almost 150 years, and this is considered one of the oldest professions in the kingdom," Samir Jastania said at his popular shop selling Hejazi sweets.
Another vendor offers appetisers, pickles and traditional spices that reflect the cosmopolitan history of Jeddah, a city considered relatively liberal in Saudi Arabia, where a severe version of Islam is practised.
"What makes me happy is that the people of the area run it all. It's amazing," said festival visitor Ali Jazar, 39, sipping a popular Ramadan apricot drink known as gamardeen.
Although this year's Ramadan cultural festival in old Jeddah is not the first, the event has taken on added significance since the UNESCO designation.
Wafi said that in its first seven days almost 130,000 people flocked to the festival's open-air markets, games, traditional rituals, foods and literary discussions.
One visitor, Osman al-Rosaini, 45, said it is a chance to "teach my children about their roots".
Mansour al-Zamil, who owns a gift and memorabilia shop, says Ramadan is just the start of his commitment to Jeddah's old quarter.
"Opening this shop has been my dream since I was a child. I opened it in the historical city and it will be here after the festival is over."