Standing Out

When sanctions were finally lifted, many expected Iran to transform overnight. While some sectors took off as anticipated, others paused for an instant. Iran, overflowing with historical and geographic sites, was expected to see a dramatic increase in tourism numbers almost immediately; however, arrival numbers and the related economic improvements have come up short of expectations.

This should not suggest, however, that Iran is not working to build itself up into a world-class tourism destination. The country is on a clear path to building the tourism industry it envisions. With a dedicated government and increased public-sector involvement in areas such as tourism infrastructure, hotels, and transport facilities, it is only a matter of time until the country well surpasses expectations.
According to the World Travel and Tourism Council, Iran is expecting to see the tourism sector contribute a total of approximately USD31.5 billion to the GDP in 2017. This is up from USD30.4 billion in 2016. By a decade, total contributions to GDP are expected to hit an all-time high, reaching USD 52.6 billion in 2027. Tourism’s contribution to employment is expected to see a similar increase over in the coming years. After both employment and GDP contribution experienced extreme drops in 2002, they are on track for recovery by 2027, just two years after the government’s 2025 tourism plan. The WTTC estimates total contribution to employment for 2017 will be nearly 1.7 million jobs, up from 1.62 million in 2016. For 2017, projections see the total number of jobs offered by the industry at just under 2 million.
The government has a goal of increasing tourism arrival numbers to 20 million by 2025, and though, according to the World Bank, foreign arrival sat at 5.2 million in 2015, the country is mobilizing several agencies to develop a wide range of attractions that will bring in an additional 15 million annual visitors within the next eight years. The country is working to develop several tourism sectors, such as health, cultural, luxury, and rural tourism.

The government is at work designing investment plans for foreign investors packed with incentives, such as loans from Iranian banks and providing extra assistance in obtaining the necessary licenses. The government is particularly keen to bring in inventors who want to build hotels, especially internationally known brands. While it is sometimes pointed out that the country is experiencing a shortage in accommodation, this is a problem confined to certain provinces and only in the high season. However, in areas such as Fars and Isfahan, which are frequently cited as not having enough hotels, the government is already well into several new developments.
Considering no major investments have been made to the sector in some 40 years, tourism in the country shows itself as a promising area of investment. Further, Iran’s changing economy is putting a greater emphasis on service industries, providing the foundation for a flourishing tourism sector. The country’s “100 Hotels, 100 Businesses” endeavor hopes to further aid in this development. It involves bringing together local and international investors with the government for investment projects including everything from encouraging and financing domestic entrepreneurship to building four- and five-star hotels. Some USD20 billion in investments have already been set aside for some of the 100 projects the country hopes to complete. The government hopes that when completed, the plan will not only significantly increase the tourism sector, but will provide nearly 100,000 jobs.