Travel and tourism players, including tour guides and owners of traditional restaurants, eco lodges and hotels, will receive loans worth between 160 million rials ($637) and 9 billion rials ($35,856) at an interest rate of 12%, a relatively cheap rate considering the current inflation rate of 29%.
Registration at Kara.mcls.gov.ir for tourism loans started on Nov. 19, following the approval of the government relief package by the taskforce to fight the economic impacts of coronavirus on Sept. 30.
As per the guidelines prepared by the taskforce, tour guides will receive loans worth 200 million rials ($796); travel agencies between 1,500 and 3,000 million rials ($5,976-$11,952); tourist transportation companies 800 million ($3,187); centers for tourism studies 600 million rials ($2,390); and traditional hotels and eco lodges will be eligible to receive between 800 million rials ($3,187) and 2,000 million rials ($7,968), depending on their grade, floor area and number of rooms.
In addition, hotels will be granted 2 billion rials ($7,968) to 9 billion rials ($35,856) and hotel-apartments, motels and guesthouses will receive 2 billion rials ($7,968) to 3.5 billion rials ($13,944), depending on their ratings.
The repayment period of loans will start after a six-month breather, as of the second month of next Iranian year (starting April 21, 2021), IRNA reported.
The taskforce to fight the economic impacts of coronavirus also decided to defer the payment of all debts of tourism players, including taxes, employers’ insurance premiums, repayment of loan installments and utility bills, until the end of the current fiscal year (March 20, 2021).
Dramatic Decline in Tourist Arrivals
Iran’s tourist arrivals saw a decline of 72% in the first eight months of 2020, according to the latest data of World Tourism Organization.
Iran’s tourism sector witnessed a decline of 90%, 92% and 94% in January, February and March 2020 compared with the corresponding months of 2019. This negative growth hit a record high of 96% in April and 97% in May, following restrictions on travel imposed in response to the pandemic.
In June, tourist arrivals recorded an 84% decrease. However, the decline in arrivals slowed down significantly in July and August, as the two months saw a 35% drop in Iran’s tourist arrivals.
“The outbreak of coronavirus has caused losses worth 120 trillion rials ($480 million) to tourism industry,” Minister of Cultural Heritage, Tourism and Handicrafts Ali Asghar Mounesan was quoted as saying by Mehr News Agency in September.
“Only 1.75 trillion rials [$7 million] of the sum have been compensated in the form of loans to economic players of tourism industry. Insurance premium and loan repayment breaks were among emergency measures introduced to reduce the economic impacts of the Covid-inflicted recession on tourism.”
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, according to the minister.
A total of 8.7 million foreigners travelled to Iran in the last Iranian year (March 2019-20), he added.
According to Jamshid Hamzezadeh, president of Iranian Hoteliers Association, 240,000 people are directly and 550,000 people are indirectly employed in the Iranian tourism industry.
Inadequate Relief
The government bailout does not offer much of a cure, 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, says.
“Last year was a bumpy ride for tourism industry because of spring flooding, November protests and Ukraine International Airlines plane crash. The outbreak of coronavirus may be the last straw for the industry not only in Iran but in the whole world,” he said.
Rafiei-Shad put the number of travel agencies in Tehran at 20,000 and said as each of them have 10 people on their payrolls and each employer is the head of a four-member household on average, they provide the livelihood of 80,000 people only in the capital city.
“No one accepts the responsibility for the unemployment of tour guides,” Mahdiyeh Jahangir, a tour guide, told the Persian-language daily Iran.
“There are 10,000 tour guides in Iran and as they don’t have an employer, they usually don’t hold insurance and consequently can’t receive unemployment benefits at this time,” she said.
“The promised loans are only enough 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 loans with a one-year moratorium period.”
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 people 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.
