Domestic Economy

Coronavirus Inflicts Over $180m in Losses on Hotels

Coronavirus Inflicts Over $180m in Losses on Hotels
Coronavirus Inflicts Over $180m in Losses on Hotels

The new coronavirus disease, also known as COVID-19, has inflicted 30 trillion rials ($187 million) in losses on hotels, the Iranian Hoteliers Association estimates.
Hotels in Iran, in addition lodgings and guesthouses, have had to shut down since the spread of COVID-19, as they were among the first to be affected by the outbreak.
The association has requested related organizations to grant financial aid to affected businesses in the form of cheap loans to compensate for their huge losses, reported ISNA.
More than 80,000 people are directly employed in Iranian hotels.
The Iranian Parliament approved last year exemption of value added tax on services offered by three-star and lower-rated guesthouses, apartment hotels and other lodging properties that have secured permits from Cultural Heritage, Handicrafts and Tourism Ministry of Iran or related unions, ISNA reported. 
“By approving this legislation, the parliament has provided practical support to the domestic tourism industry, especially during the current economic hardship Iran is experiencing these days,” says Vali Teymouri, deputy tourism minister. 
"As VAT is ultimately imposed on end consumers, the exemption of lodging properties from paying VAT is synonymous with them being exempt from this tax, which will in turn lower their travel expenses," he was quoted as saying by Mizan Online. 
Teymouri noted that Iran has 157 four- and five-star hotels and by the end of President Hassan Rouhani’s second term in 2021, the figure will increase to 210. 
“When the infrastructures are complete, the income from tourism will replace oil revenues,” he said.
The Consumer Price Index of hotels and restaurants stood at 194.6 in the last Iranian month (Feb. 20-March 19, 2020), indicating a 0.6% growth compared with the month before. 
The index, with a coefficient of 1.44%, registered a year-on-year increase of 25.2%. 
The group’s annual inflation during the month under review grew by 40.1% compared with last year’s corresponding period. 

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