For a long time, the unfavorable state of Iran’s tourism sector has been talked about and compared to that of neighboring countries, until the Covid-19 hit the final blow, reads an article in Ayandenegar, a monthly journal published by Tehran Chamber of Commerce.
Along with the pandemic, economic sanctions and rising tensions between Iran and the United States have reduced the number of foreign tourists visiting Iran.
The number of incoming tours from the United States dropped to zero and those from Europe dropped sharply.
Iran’s tourism industry has barely survived, thanks to the limited number of domestic travels and foreign trips.
Covid-19 has now severely damaged the industry, hotels and travel agencies have borne heavy losses and unemployment has increased.
According to officials, more than 5,000 travel agencies in Iran and 2,000 guild units were operating in Tehran in the fiscal 2020-21, but currently only 10% are active.
Some travel agencies have about 100 people on their payroll, but the figure has currently reduced to 10.
Under the circumstances, many countries tried to save the tourism industry by using government support packages to boost tourism startups. Startups in the hotel and tourism industry are one of the thriving cases that have attracted increasing attention by introducing new products, services and technology in the market.
Covid-19 has had a devastating effect on the tourism industry around the world, because of which Iran and all countries are working for the revival of tourism.
World tourism in the second half of 2021 saw an upward growth and was able to grow by 4% compared to 2020, although the recovery trend remains vulnerable.
Forecasts for return to pre-Covid levels in 2019 are mainly for after 2024 due to new variants and constant changes in travel restrictions. With the advent of the new Omicron variant, restrictions intensified and slowed international travel’s recovery process.
In the fiscal 2021-22, the coronavirus vaccination was a source of encouragement to the unfavorable situation but with the rise of Omicron, worries resurfaced.
Chairman of Tourism and Related Industries Commission of Iran Chamber of Commerce, Industries, Mines and Agriculture Ali-Akbar Abdolmaleki said the tourism industry in Iran and the world has been going through hard times for three years.
“In the fiscal 2020-21, about 95% of businesses in the field of tourism were closed,” he added.
The World Tourism Organization said 2020 was the worst year for the global tourism industry in history, as the number of tourists fell by 73%.
In 2021, the numbers increased by 4% compared to the previous year, but it will not return to the pre-Corona level by 2024.
Abdolmaleki explained that the pace of improvement in tourism around the world is due to varying degrees of travel and transportation restrictions, vaccination rates and travelers’ confidence about the condition of countries they are traveling to.
“If there are going to be changes and developments in favor of the tourism industry, this goal will be achieved by creating a private-sector plan. The government's approach should be to boost tourism and adopt strategies that prevent the industry from being harmed by the pandemic,” he said.
Heavy Losses
Early estimates by Iran Chamber of Commerce, Industries, Mines and Agriculture put losses suffered by Iran’s tourism industry at 320.94 trillion rials (over $1 billion) due to the Covid-19 pandemic from February 2020 to March 2021.
Lodgings (hotels, guesthouses, etc.) suffered the biggest losses, accounting for 88.6% of all losses in the tourism industry.
Travel agencies followed, accounting for 3.4% of total losses.
Jamshid Hamzehzadeh, the head of the Iranian Hoteliers Association, said last year the industry has had to undergo a great deal of downsizing due to financial problems caused by Covid-19.
“About two-thirds of the staff members have been laid out, most of whom were skilled and educated,” he was quoted as saying by the news portal of Tehran Chamber of Commerce, Industries, Mines and Agriculture (Tccim.ir).
According to ICCIMA, a total of 44,138 people lost their jobs in the tourism sector during the period, again with lodgings accounting for the lion’s share (21,154 people or 47.9%) followed by travel agencies (6,070 people or 13.8%)
According to the chamber, the share of tourism in Iran’s gross domestic product (GDP) stood at 6.8% in 2019.
Before the pandemic, about 1 million Iranians would go abroad while 20 million traveled inside the country with a total of 75 million nights of stay during the two months from the beginning of the 12th month of the Iranian year to the end of the first month of the following year (peak traveling season in Iran) on average.
A total of 8 million foreign tourists (mainly from neighboring countries) visited Iran in the fiscal 2019-20, as the country was the third biggest tourist destination in the world, according to this report.
About 80% of tourism businesses in Iran are considered small and most of the employees are not covered by insurance.
ICCIMA expects the impact of Covid-19 to last from five to seven years.
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Iran is home to one of the world’s oldest civilizations. With 26 cultural and natural UNESCO heritage sites, Iran is placed at the 10th spot. This list is dominated by palaces, bazaars, sites of worship, old water systems and remains of the historic Persian Empire.
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The crash in international tourism due to the coronavirus pandemic could cause a loss of $4 trillion to the global GDP for 2020 and 2021, according to an UNCTAD report published on June 30.
The estimated loss has been caused by the pandemic’s direct impact on tourism and its ripple effect on other related sectors.
The report, jointly presented with the UN World Tourism Organization (UNWTO), says international tourism and its closely linked sectors suffered an estimated loss of $2.4 trillion in 2020 due to the direct and indirect impacts of a steep drop in international tourist arrivals.
With Covid-19 vaccinations being more pronounced in some countries than others, the report says, tourism losses are reduced in most developed countries but worsened in developing countries.
According to the report, the asymmetric rollout of vaccines magnifies the economic blow tourism has suffered in developing countries, as they could account for up to 60% of the global GDP losses.
The tourism sector is expected to recover faster in countries with high vaccination rates, such as France, Germany, Switzerland, the United Kingdom and the United States, the report said.
But experts don’t expect a return to pre-Covid-19 international tourist arrival levels until 2023 or later, according to UNWTO.
The main barriers are travel restrictions, slow containment of the virus, low traveler confidence and a poor economic environment.
