Kish Hotels Incur Corona Losses Estimated at $94m

Hotels in Iran's southern Kish Island suffered losses estimated at 15 quadrillion rials ($94 million) during the Iranian New Year holidays (March 17-April 5) due to the outbreak of the novel coronavirus.
“The revenues coming from the 20 days of New Year holidays, when people have the free time to travel, for Kish equals that of four months of business. Yet, this year, the COVID 19 crisis took away these revenues and left us with losses that will be very difficult to compensate,” Masihollah Safa, the head of Kish Hotel Owners Association, was quoted as saying by ILNA.
According to the official, the overall financial loss caused to hotels across the country is estimated at 60 quadrillion rials ($375 million).
“There are 50 hotels operating in Kish Island, all of which have been hit by the virus outbreak, following which all hotels in the country were closed down,” he said. 
Kish is a 91-square-kilometer resort island in the Persian Gulf, off the southern coast of Iran. It is part of the Bandar Lengeh County in Hormozgan Province. 
Owing to its free trade zone status, Kish Island is touted as a consumer's paradise, with numerous malls, tourist attractions and hotels. 
Kish Island is the third most-visited vacation destination in Southwest Asia, after Dubai and Sharm el-Sheikh. Tourists from many foreign countries entering Kish Free Zone from legal ports are not required to obtain a visa prior to travel.
The government has announced bailout to coronavirus-hit businesses, including loans with a 12% interest rate and the Cultural Heritage, Handicrafts and Tourism Ministry has also put forward a rescue package for tourism businesses, which has yet to be finalized.
Economic operators, however, believe although these bailouts are positive measures, they can’t resolve problems facing the industry.  
“The bailouts don’t 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, 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,” he said.
Noting that the Cultural Heritage, Handicrafts and Tourism Ministry has proposed delaying value added taxation to support the industry, he said no work has been done over the past couple of months because all travel agencies were closed. 
“The government needs to offer tax exemption to tourism industry for the fiscal 2019-20 and 2020-21, and lend some support by providing social welfare to employees of this sector. All governments produce to reduce the unemployment rate, so the financial support could help save jobs and prevent the bankruptcy of travel agencies,” he said. 
Rafiei-Shad put the number of travel agencies in Tehran at 20,000 and said considering that each of them has 10 people on their payrolls and each employer is the head of a four-member household on average, they provide livelihood for 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. We only have a tour guide ID card and nothing more.”
Hamzehzadeh said the government bailout for tourism businesses is 120 million rials ($750) for each employee, which must be repaid over two years with a 12% interest rate. 
“This sum 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,” he said.