More Mashhad Hotels Up for Sale Over Poor Business

A further 10 hotels in Mashhad, Khorasan Razavi Province, have been put up for sale, increasing the number to 80.

Less than a week ago, Mohammad Qanei, the head of the provincial office of Iranian Hoteliers Association, had told ISNA that 70 properties would be sold.

However, in a recent interview with IRNA, the hotelier said the number of properties for sale is now 80 due to poor business.

"It's the high season now and only 60% of the city's hotel capacity are occupied, which is not satisfactory," he said.

Qanei said working in the hotel sector "makes no financial sense anymore" and proprietors keep incurring losses.

"To make matters worse, around 200 hotels are under construction … The sector is going to face major obstacles in the near future," he said.

Mashhad, a holy city in northeastern Iran and home to the shrine of Imam Reza (PBUH), hosts about 28 million foreign and domestic tourists annually, most of whom are pilgrims.

Around 3 million are international travelers, half of which come from the Persian Gulf region. However, following the severance of diplomatic ties between Iran and Saudi Arabia in January 2016, annual tourism to Mashhad from Arab countries allied with Riyadh has nearly halved, dropping to around 700,000.

Based on figures, each pilgrim spends at least 1.2 million rials ($31) a day for hotel rooms, so the loss of international pilgrims is a major financial blow to the hotel sector in Mashhad and the local economy, particularly because Arab tourists are known to be high spenders.