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Ambitious Investment Scheme to Promote Hotel Construction

Ambitious Investment Scheme to Promote Hotel ConstructionAmbitious Investment Scheme to Promote Hotel Construction

Iran faces a serious shortage of hotels and lodging centers, which is one of the major impediments to the growth of its tourism industry. Iran ranks 116th among 136 countries based on the index measuring the number of hotels per 100000 people. The figure shows how far behind its hotel industry is lagging, especially when compared with regional Muslim states such as the UAE and Turkey that rank 42nd and 64th respectively and Malaysia, the Southeast Asian Muslim country, which is placed at 35th spot on the list.

Based on a recent study, Iran needs over 770 three- to five-star hotels to meet its development goals by 2022. The construction of at least 500 hotels by the private sector has been envisioned in the Sixth Five-year Economic Development Plan (2017-22), IRNA reported. The scheme titled "100 Hotels, 100 Businesses" has been among the most noteworthy efforts to push forward the country's declining hotel industry.

Carried out by the Tourism Holding Company of Social Security Organization (known by its Persian acronym Hegta), the project aims to attract investment for the construction of 100 hotels across 31 provinces with priority given to more popular regions.

Gholamheidar Ebrahim Bay-Salami, Hegta's managing director, introduced the scheme at the Fifth Iran-Europe Banking and Business Forum held last week in Frankfurt, Germany, stressing that shifting focus toward new industries such as hotel and tourism are essential for Iran's economy.

He said that foreign nationals are allowed to set up a company, own property and transfer the profit of their business at any time while observing the trading laws of Iran.

"The main strategy of SSO's scheme is to initiate joint ventures with foreign companies and earn profits in a win-win situation," Bay-Salami said, stressing that the projects also enjoy a tax exemption for five to 10 years.

In its first phase, domestic and foreign investors will cooperate in hotel construction in popular destinations, namely Tehran, Kashan, Hamedan, Shiraz, Mashhad, Yazd, Qom, Bandar Abbas, Ahvaz, Bushehr and Rasht.

Channeling funds and familiarizing investment procedures will be coordinated by Hegta in cooperation with the Central Bank of Iran and Refah Bank (affiliated to SSO).

"So far, 233 companies have been nominated to invest in the projects," he said.

Besides Hegta, other organizations such as Iran's Cultural Heritage, Handicrafts and Tourism Organization, Ministry of Cooperatives, the Organization for Investment and Economic and Technical Assistance and the Social Security Investment Company, will also support the scheme.

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