Domestic Economy

Iran Tourism Losses Hit $490m

Iran Tourism Losses Hit $490m
Iran Tourism Losses Hit $490m

The outbreak of coronavirus has caused 120 trillion rials ($490 million) in losses to Iran’s tourism industry to date, says Minister of Cultural Heritage, Tourism and Handicrafts Ali Asghar Mounesan.
“Only 1.75 trillion rials [$7 million] of the sum have been compensated in the form of loans to the economic players of tourism industry. Insurance premium and loan repayment breaks were among emergency measures introduced to reduce the economic impacts of Covid-19 recession on tourism,” he was quoted as saying by Mehr News Agency.
According to the minister, only 74 foreign tourists visited Iran during the first quarter of the current Iranian year (March 20-June 20) compared with 2.3 million in the same period of last year. 
Mounesan said a total of 8.7 million foreigners travelled to Iran in the last Iranian year (March 2019-20). 
According to Jamshid Hamzezadeh, the president of Iranian Hoteliers Association, 240,000 people are directly and 550,000 people are indirectly employed in the Iranian tourism industry.
“The government bailout is not helpful, given the fact that the pandemic has brought tourism to a standstill for two months now,” Amir-Pouya Rafiei-Shad, the head of Tehran Province Tour and Travel Agencies Association, said. 
“Last year was a bumpy ride for tourism industry: spring flooding events, November protests and Ukraine International Airlines plane crash. The outbreak of the coronavirus may be the last straw for the industry not only in Iran but in the whole world.”
Rafiei-Shad has put the number of travel agencies in Tehran at 20,000.
“Since each of them has 10 people on their payrolls and each employer is the head of a four-member household on average, we can say that they provide livelihood for 80,000 people only in the capital city,” he said. 
Mahdiyeh Jahangir, a tour guide, told the Persian-language daily Iran that no one accepts responsibility for the unemployment of tour guides. 
“There are 10,000 tour guides in Iran and as they don’t have an employer, they usually don’t hold insurance coverage and consequently can’t receive unemployment benefits at this time,” she said.
Hamzehzadeh said the government bailout for tourism businesses is 120 million rials ($490) for each employee, which must be repaid over two years with a 12% interest rate. 
“This amount is only sufficient to pay financial compensation for two months of an employee’s services. The government needs to offer loans at low interest rates like 5% instead of 12% to tourism industry and consider a five-year period for the repayment of the loans with a one-year moratorium period,” he said.
The government has approved a 750-trillion-rial ($3 billion) package to help low-income households and struggling businesses impacted by the rapidly spreading coronavirus. The loans are being extended to small- and medium-sized enterprises hit hard by the pandemic, according to the website of the Central Bank of Iran. 
The lending rate is at 12% to be repaid within two years, Abdolnasser Hemmati, the CBI governor, has said. 
Commenting on the interest rate, Hemmati said it is reasonable, given the high inflation rate in the country. 
“Even if banks set an 18% interest on loans, the real interest rate would still be negative when compared to annual inflation … Any rate below 12% would apparently impose further financial strain on banks,” he added. 
Hemmati said only businesses that did not lay off workers during the corona crisis would be eligible for the loans and instructed banks to process the loans soon and cut red tape. 
In the wake of the coronavirus pandemic, few industries have fallen as far and as fast as tourism. The technological revolution that brought us closer together by making travel and tourism easy and affordable—a revolution that fueled one billion trips a year—is helpless in halting a virus that demands we shelter in place, the National Geographic wrote.
Taking a snapshot of tourism losses is difficult, as the data change as quickly as the virus spreads. If the pandemic continues for several more months, the World Travel and Tourism Council—the trade group representing major global travel companies, projects a global loss of 75 million jobs and $2.1 trillion in revenue. 

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