Analyse of the sector 29/11/2010
Number of visitors to Iran continues to decline

Arrivals in Iran continued to decrease in 2008, in line with a trend that commenced in 2006, as the country does not have a positive image internationally owing to continuing political tension with western governments, despite efforts on their part to maintain dialogue. In addition, the country has a reputation for supporting various elements of Islamic extremism and for continued inequality regarding women. Furthermore its location in the Middle East, which is not renowned for security, means that Iran is not considered as an ideal destination among many potential tourists despite its many tourist attractions.

 

Domestic tourism supports travel and tourism in Iran

 

In comparison to the performance of arrivals in 2008, domestic tourism remained strong and continued to play a vital role in supporting travel and tourism in Iran, particularly travel accommodation. Many domestic trips comprise either of religious visits to holy sites such as Mershad or Qum or visits to family and friends in other parts of the country. Many of these trips are taken by land and in 2008 the government provided extra petrol rations to enable people to travel over the Iranian New Year. In 2008, petrol rations were restricted to 100 litres per month owing to the global economic climate.

 

Governmental action with regard to travel and tourism

 

The Iranian government appears to be targeting tourism as a means of diversifying its economy in order to break away from its continued reliance on oil revenues. In 2005, it developed a 20-year tourism plan to start this process but it has been difficult to establish if any progress has been made, as there do not appear to have been any public reviews to monitor the progress of this plan. Nevertheless, the government has encouraged foreign investment in travel and tourism in the country as well as public-private joint ventures and it has offered tax incentives. However continued bureaucracy and lack of certainty regarding return on investments have discouraged most foreign ventures.

 

Transportation options continue to improve

 

Whilst land transportation remains the easiest but not necessarily the safest way of traversing Iran, other transport options have begun to improve. For example a number of low-cost carriers such as Jazeera Airways, Bahrain Air and Air Arabia, which are based in the GCC, have started flying to various destinations in Iran such as Tehran, Mershad and Shiraz and the potential creation of an Iran-based low-cost carrier is also under discussion. Furthermore, the rail network across Iran has also benefited from improvements with the electrification of tracks aimed to be fully completed by 2011.

 

Uncertain future for travel and tourism in Iran

 

Travel and tourism in Iran faces an uncertain future. Owing to internal political wrangling as well as the country’s pariah status in some international arenas, promotion of the country as a tourist destination is not expected to be successful, particularly among potential tourists in western countries. Therefore there is expected to be strong focus on domestic tourism and the promotion of tourism among allies to Iran such as Turkey, the UAE and Saudi Arabia. Development of tourism infrastructure will need to be encouraged as will investment in training of potential employees.