TBY talks to Marjan Mobin, Managing Director of Pars Caravansary.
TBY What’s the background story to Pars Caravansary?
MARJAN MOBIN Pars Caravansary is a private tourism development company established as a tourism holding by Ghadir Investment Company (51%) and Aryaalove (49%). Pars Caravansary was established to invest in tourism industry infrastructure, operate tourism facilities focused on rest areas, and offer consulting services to the tourism industry.
How do you evaluate the current state of the tourism industry in Iran and where do you see the most room for growth?
Iran has a high potential to attract tourists, with its beautiful landscapes, cultural heritage sites, wide range of activities from hiking and skiing in the mountains to beach holidays by the Persian Gulf, the Caspian Sea, and faith tourism. But at the moment the status is not satisfactory. Iran has attracted just 2.3 million tourists in 2009, and this figure is not good relative to other Middle East countries such as Turkey. The tourism industry is very young in Iran. There is little growth in the number of incoming tourists, and we do not expect significant rises in the upcoming years. It seems that the most growth will be in rest areas, chain restaurants, tourism complexes, and chain hotels.
How do you think domestic tourism will develop in Iran in the upcoming years? Which destinations will gain popularity?
Domestic tourism has undergone high growth in recent years as per capita incomes have increased. The number of personal cars also has affected the quantity of trips. However, traveling is still seasonal and depends on the timing of holidays. Most Iranian people are easy travelers. In some tourism-focused cities such as Mashhad, Shiraz, and Kish Island there are not enough accommodation facilities, whether in the mid-scale and economy segments or even for the luxury segment. We also anticipate transportation will be an attractive segment to invest in after the removal of energy subsidies.
In 2005, the government announced a 20-year plan to support the improvement of the tourism industry. As we are coming close to the end of the first quarter of the plan, how do you regard its success?
Iran wants to be best in the region and this plan is based on this vision. To realize this plan’s targets, Iran must have 8% economic growth each year; however, this target has not been kept. Therefore, the first five years were not in line with the vision.
What should be done by the government to support the improvement of the tourism industry in Iran?
First, the government should eliminate the barriers in front of tourism development in Iran. The most important barriers are: Iran’s international image, the weakness of people’s information about tourism attractions, as well as security and safety.
Secondly, the government must facilitate the establishment of tourism organizations in the private sector and support them to strengthen themselves, provide appropriate regulations, and fairly prepare conditions for firms to compete. Also, public organizations should not compete with private organizations. In other words, the public sector must focus on policy-making.
How did you select the areas in which your company will invest? Are you going to have an innovative approach to the Iranian tourism industry as Ghadir Investment seeks to achieve in its other business lines?
Pars Caravansary has prioritized its investment outlook into rest areas, chain restaurants, tourism complexes, and chain hotels. We selected these areas after two screening processes. The first process was to consider the attractiveness of a proposition and the second was to evaluate the probability of success. By screening the alternatives from these two stages, areas were selected that had high attractiveness and a high probability of success that also matched Pars Caravansary’s capabilities.
We will definitely bring in an innovative approach. We are going to provide a completely different and innovative rest area concept in Iran that has never existed. In our other investment areas innovation is our first principle.
How will Pars Caravansary’s investments be financed, and how profitable do you expect these investments to be?
We will finance our projects via a portfolio of methods such as commercial bank loans, self-financing formed by unallocated profits (in the future), and other means. For our first project we are going to be financed by credits received from Saderat Bank, which is Ghadir Investment’s main shareholder. The areas selected were investigated before and we expect to achieve high profits.
Do you intend to enter into any kind of international collaboration to finance these projects or to transfer know-how?
Yes, partnership with well-known brands in different parts of our value chain is one of our main strategies. We are seriously studying external collaboration proposals like joint ventures, strategic partnerships, and strategic alliances.
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