ICHHTO Insists on Setting rates

ICHHTO Insists on Setting ratesICHHTO Insists on Setting rates

The director of the Iran Cultural Heritage, Handicrafts and Tourism Organization has broken his months-long silence on the divisive issue of setting hotel rates, saying that his organization is the only entity in the country suited for the task.

Local media reported last month that hoteliers had started raising charges by 15%. But tourism officials at the ICHHTO said they had reached an agreement with hotel owners on a 12% hike.

Hoteliers claimed that ICHHTO chief Masoud Soltanifar had approved the 15% raise in room rates, whereas his deputy, Morteza Rahmani Movahed, denied the assertions.

Soltanifar finally broke his silence on Tuesday.

“There are no problems between the ICHHTO and hoteliers,” he told the press on the sidelines of a ceremony on Tuesday to discuss the next economic, social and cultural development plan (March 2016-21), according to Mehr News Agency.

He noted that so long as hotels in Iran “have not been standardized,” his organization will be the only entity that sets the prices.

“If we thought for a second that deregulating prices and allowing hoteliers to set their own tariffs would help lower hotel rates, we’d give in, but experience has shown that deregulation almost always leads to inflated prices,” he said.

Stressing that the public satisfaction is the ICHHTO’s main concern, Soltanifar, who doubles as a vice president, said “defending people’s rights is a priority of his organization.”

He claimed that hoteliers “have accepted” the ICHHTO’s stance on the issue “and moved on,” adding that hotels across the country have been given a total of 8 trillion rials ($230 million) by the National Development Fund. He did not say why the money was given and for what purposes.

“Issues such as funding and tax breaks are more important to hotel owners than price deregulation,” he said, seemingly unaware that hours earlier hoteliers had met to once again censure the ICHHTO’s “interference in their affairs.”

  “Failed Polices”

They said their “issues with the organization goes beyond a disagreement on a 3% difference in price hikes; if that were the case, hotels wouldn’t be offering 30-40% discounts regularly,” said Jamshid Hamzezadeh, president of the Iran Hoteliers’ Society. “Our problem is with their failing policies”

He blamed the declining hotel occupancy rates on the organization’s “bad policies”, claiming that despite an increase in the number of inbound tourists, occupancy rates “declined by 15% compared to last year.”

For months hoteliers have been attacking the ICHHTO for allowing vacation rentals to operate, insisting that many tourists opt to stay in these establishments due to their lower prices.

Iranians often opt to stay in vacation rentals, or even makeshift tents, rather than in comfy hotels that are often accused of overcharging and failing to provide services in accordance with their star rating.

To help incentivize hotel construction, the Iranian National Tax Administration has approved granting all lodging facilities a tax holiday for five years, and a 50% permanent exemption.

Furthermore, hotels built from the Iranian year 1395 (starts March 20) onward will receive a permanent income tax exemption.

But Hamzehzadeh is pushing for even more. “This is all well and good, but we’ll be happy when they scrap the 9% value-added tax on rooms.” The VAT issue has emerged as a big controversy among businesses and consumers across the board who insist the amount is too high and government should revise it.