20 BY 2025

Iran 2017 | TOURISM | FOCUS: INTERNATIONAL TOURISM

Iran is a regular in top-10 lists of countries with the highest number of tourist attractions and historic sites. Still, the country only ranks 50th in terms of international tourist arrivals and lags even further behind in terms of international tourism receipts.

Anyone who has had the joy of visiting Iran will confirm tourism is a big business. Iran has not been spared by the selfie virus, and one will bump into protruding Nikon lenses just like in any other tourist hotspot. One interesting difference with the typical adventurous getaway appears though: almost all tourists in Iran are local.

Years of isolation have made Iran a rather eccentric destination, as the country has not been able to capitalize on its undeniable tourism assets. Now that sanctions have been lifted, Iran's authorities have embarked on an ambitious mission to revitalize the country's foreign tourism industry. As the country is pursuing a strategy of economic diversification and wants to steer away from its dependency on commodities, the development of its tourism infrastructure has become a national priority.
The Iranian Cultural Heritage, Handicrafts and Tourism Organization (ICHHTO), Iran's governmental tourism institution, has articulated the target of attracting 20 million inbound tourists by 2025, a four-fold increase. This would bring tourism revenues to the range of USD25-30 billion. Foreign tourists coming to Iran can be broadly divided into two groups. Pilgrims and religious tourists, mainly from neighboring countries such as Iraq and Azerbaijan, make up the lion's share. Mashhad and Qom feature holy sites in Shia Islam and have received increased numbers of tourists since the escalation of violence in Iraq. The other group, which is still fairly small, consists of mainly European and Eastern Asian tourists who are interested in the many cultural and historic sites. Here lies a big opportunity, and one that is recognized by Iran's government for the potential revenues it could draw. Tourism is particularly labor intensive, and Iran struggles with high unemployment rates. Next to this, welcoming large numbers of tourists will be beneficial to Iran's image in the world. Notwithstanding the political will and obvious attractions of Iran, one key challenge remains: Iran's hospitality infrastructure is perceived to be somewhat outdated, especially set against Western standards. Seasonal capacity inadequacy in the higher segments is hampering growth, and with demand expected to continue to rise, the need for expansion and renovation of its lodging facilities is evident. The numbers from Iran's capital speak for themselves. Of all the cities with at least 1 million overnight visitors per year, Tehran ranks among the top-10 fastest-growing destinations, with an annual growth rate of 13% since 2009.
HE Dr. Zahra Ahmadipour, President of ICHHTO and Vice President of the Islamic Republic of Iran, told TBY the accommodation shortage is mainly concentrated in a few provinces, such as Fars and Isfahan, and that the issues would be solved with the help of the private sector and foreign investors. One prominent initiative in this regard is the “100 Hotels, 100 Businesses” scheme, initiated by the HEGTA, a tourism holding. In partnership with the governors of Iran's 31 provinces, 250 projects for the construction of four- and five-star hotels have been introduced to international investors. HEGTA's Managing Director, Dr. Gholamheidar Ebrahim Bay Salami, assured TBY he had already received good offers from well-known investors after presenting his plans at the International Conference on Investment in the Tourism Industry, in Tehran.
One particular characteristic of Iran's hospitality infrastructure is the virtual absence of international brand chains. ICHHTO's President told TBY she welcomes international chains coming to Iran, and the latest developments indicate this process is slowly unfolding. Accor, Europe's largest hotel group, established itself as the first international chain in Iran and opened two four-star hotels at Imam Khomeini International Airport. Abu Dhabi-based Rotana is about to follow by opening hotels in Mashhad, Tehran, and Isfahan; Meliá, from Spain, will soon open a five-star hotel at the shores of the Caspian Sea. The widely recognized potential of Iran's tourism sector will be a powerful magnet for investments for years to come.