Iran’s tourism industry is considered as the most affordable prices in the world for foreign visitors.

A biannual report published by the World Economic Forum (WEF) gave Iran a score of 66.6 in terms of price competitiveness and put it ahead of global tourism players such as Egypt, Malaysia, Russia, Turkey, Greece, Spain, the US, Franc and Italy.

Overall, the WEF report showed that Iran’s generally travel and tourism competitiveness ranking had improved by four points over the past two years.

A 2017 report by World Travel and Tourism Council also indicated promising improvements in the country’s tourism industry.

As reported by the official website of WTTC, the direct contribution of travel and tourism industry to Iran’s gross domestic production was 367 trillion rials ($9.6 billion) in 2016, constituting 2.9% of the total GDP. The figure is forecast to rise by 7.5% in 2017.

For instance, the development of tourism infrastructure in a target city will not only provide direct jobs in tourist services such as lodging and hospitality, but will also lead to a boom in businesses like handicrafts, food, clothes, transport and many other sectors.

Another important benefit of tourism is the small investment required for entrepreneurship.

In ecotourism, enormous profit can be made with minimum investment since the primary requirements, including an attraction and lodging, are already available.

More importantly, employment in tourism is among the most sustainable since there are always potential consumers for goods and services in the tourism sector.

Job Opportunity

Iran tourism industry generated 559,000 jobs directly in 2016 (2.2% of total employment) and this is forecast to grow by 4.9% in 2017. Previously, it was forecast that tourism would generate 496,000 jobs directly in 2015.

This includes employment by hotels, travel agencies, airlines and other passenger transportation services (excluding commuter services). It also includes, for example, the activities of restaurant and leisure industries directly supported by tourists.

In 2015, about 476,000 jobs were directly created by the travel sector.

By 2027, the industry is predicted to generate 670,000 jobs directly, an annual increase of 1.3% over the next 10 years.

Ali Asghar Mounesan, the head of Iran’s Cultural Heritage, Handicrafts and Tourism Organization, has once again highlighted the role of tourism in job creation in a commentary published in the Persian media.

Pointing to President Hassan Rouhani’s emphasis on tackling the issue of unemployment, the official said tourism industry has great capacities and advantages in this regard, Financial Tribune wrote.

“A major advantage of tourism compared with other industries is that it can generate both direct and indirect jobs, meaning that for each direct job in the sector, several other related secondary jobs are created,” Financial Tribune quoted him as saying.

Mounesan noted that by investing in restoration and refurbishment alone, direct and indirect jobs can be created for tens of local people.

“Ecotourists do not expect luxury facilities of a five-star hotel,” he said.

The amazing shrine of Hilal Ibn Alie

Tourists walk on a platform at a station in Tehran after arriving in the Iranian capital on a luxury train from Budapest on October 27, 2014. (AFP PHOTO/Atta Kenare) 

Visitor Spending

An important part of tourism’s direct contribution to the economy is the money spent by foreign tourists (called visitor exports in the industry). This amounted to $4.2 billion in 2016, up from $1.1 billion in 2015.

The figure is expected to grow by 11.6% in 2017 and continue to grow by 3.4% every year until 2027, when it is predicted to reach $6.6 billion.

Furthermore, Iran’s tourism industry attracted $3.5 billion in capital investment last year, which is expected to rise by 6.3% in 2017 and by 3.4% per year over the next 10 years to $6.2 billion in 2027.

GDP Growth

The industry’s contribution to Iran’s GDP is expected to grow by 7.5% this year, which is faster than the Middle East (4.6%) and world (3.8%) average.

Iran is ranked first regionally with regard to the predicted growth of the sector’s direct contribution to employment (4.9%) this year, more than double the Mideast and global average (both at 2.1%).

Visitor export is also expected to grow by 11.6%, far above the regional (5.2%) and world (4.5%) average.

However, Iran is not expected to fare well in terms of attracting investment compared to other countries, as WTTC predicts a modest 6.3% rise in capital. While this is above the global average (4.1%), it is below the Middle East average (7.3%).

Iran’s declared goal is to attract 20 million tourists every year by 2025, generating $30 billion in revenue. However, if the council’s forecast is anything to go by, achieving that target in eight years is not going to be easy.

Drawing Foreign Tourists

Iran’s ultimate goal is to draw 20 million foreign tourists annually by 2025. However, with only eight years to go, the target appears to be very ambitious.

Iran has set itself a target of 6.5 million inbound tourists in the current Iranian year that ends on March 20, 2018, a senior official at Iran’s Cultural Heritage, Handicrafts and Tourism Organization said.

The objective has been set by the Resistance Economy Headquarters, which also aims to increase domestic tourism numbers to 120 million by the yearend, IRNA reported.

“With proper planning and development of infrastructure, it is possible to meet our goals,” Morteza Rahmani Movahed, deputy for tourism at ICHHTO.

“However, it takes time to heal Iran’s international image,” he added, referring to years of smear campaigns against Iran led by most western media outlets.

At the time being another key point that adds to Iran’s advantage in this industry must be assessed- Iran is the world’s cheapest tourist destination. This fact has been reported by the World Economic Forum (WEF) who has assessed nearly 141 countries.

Statistics show that Iran is currently ranked 15th in terms of tourist attractions in the world. A series of hurdles such as sanctions and propaganda by the west, especially in the media, has prevented Iran’s tourism industry from flourishing.

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The inaugural ceremony of the fair in the German capital was attended by the Head of Iran’s Cultural Heritage, Handicrafts and Tourism Organization Zahra Ahmadipour.

Iran has set up 24 pavilions and tourism offices in the expo to introduce the Islamic Republic’s tourism potentials and capacities.

Secretary General of the United Nations World Tourism Organization (UNWTO) Taleb Rifai inaugurated the international event which will run until March 12.

Tour operators, online booking portals and hotels, and many other service providers from over 180 countries are presenting their products and services at the event.

Known as the World’s Largest Travel Trade Show, ITB Berlin focuses on the ‘International Year of Sustainable Tourism for Development 2017’ — a slogan introduced by the UNWTO earlier this year.

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Most international sanctions related to Iran’s nuclear program were lifted at the start of this year. That sparked widespread interest among international companies in entering a country of 80 million.

Representatives of rapidly expanding US companies such as Hilton Worldwide Holdings Inc., Marriott International Inc. and Choice Hotels International declined to comment.

Meanwhile, other companies are wasting no time. Abu Dhabi-based-Rotana Hotel Management Corp. PJSC, France’s Accor, Spain’s Meliá Hotels International and Germany’s Steigenberger Hotel Group are all moving quickly in anticipation of a tourism and business boom.

“We have been carefully watching the status of USA sanctions, the regulatory changes to those sanctions and we are evaluating the opportunities as a result of those changes,” said Alex Kyriakidis, president and managing director, Marriott International Middle East and Africa.

Iran’s economy is the second largest in the Middle East behind Saudi Arabia.

“Everybody is waiting for the international changes to come into effect – we are moving forward,” said Guy Hutchinson, the chief operating officer of Rotana. “We are going full steam ahead,” he said.

Rotana, which operates out of more than two dozen cities in emerging and often complicated markets such as Iraq and Sudan, has four properties under construction in Iran, the first one of which, a five-star hotel with 362 rooms, will open next year in the holy city of Mashhad.

Rotana can draw from its experience in other holy cities such as Mecca I Saudi Arabia and Karbala in Iraq, where targeting pilgrims as a major source of demand involves unique challenges, Hutchinson said. For example, more flexible check-in and checkout times might be needed to take into account the prayer times, he said.

“If you talk to US companies, they don’t necessarily have the same understanding in markets like this, virgin markets where there are specific challenges on how you operate,” said Hutchinson.

Frankfurt-based Steigenberger recently signed a letter of intent to open 10 hotels in Iran, while Meliá has a five-star property in the works on the shores of the Caspian Sea. Part of their optimism is fueled by Iran’s ambition to increase the number of visitors to 20 million by 2025 from around five million in 2015.

Since the 1979 Islamic Revolution, Iran’s hotel sector has been a local affair marked by the absence of international brands. Visitors to Tehran, whether for leisure or business, welcome top-end hotels.

“There’s not enough room for business travelers in Tehran,” said Maryam Kiaie, the international business development director for Rah Shahr, a major Iranian infrastructure firm. “We have business delegations postponing trips because of it.”

Kiaie estimates that Tehran needs 5,000 more high-grade hotel rooms. Hotels may be attractive for investors because they are easier to buy and upgrade than other property types.

“I think it’s a very safe sector to invest in,” Kiaie said. “It’s easier to get finance to build hotels, and there are many local investors who are interested in coming into a joint venture with foreign investors. It’s a good opportunity for hotel brands.”

A few of Tehran’s hotels market themselves as four- or five-star hotels but analysts say most of these wouldn’t receive the same classification by international standards. Room rates at the two Accor branches in Tehran range between $100 and $140 per night.

“Iran has some huge potential for growth because there is a lack in hotels both qualitatively and quantitatively,” said Christophe Landais, chief operating officer at Accor Hotels Iran. Paris-based Accor in the past year opened two properties, under the Ibis and Novotel brand, next to Tehran’s international airport. It is working on about 10 additional projects that will be located in Tehran and Mashhad.

Since opening its doors in Iran, Landais said the most positive feedback from clients he has received focused on Accor’s offering of free Wi-Fi and up to 40 international channels in the bedrooms – standard offerings in the West but more rare in existing Iranian hotels.

Hutchinson likened the present Iran situation to China before it became an economic powerhouse.

“It may take a little while until it fully opens and starts to move, but when it starts (it will go quickly),” he said./ Iran Daily

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