Incomplete Projects Piling Up

Incomplete Projects Piling UpIncomplete Projects Piling Up

Despite being one of the most profitable and ecofriendly industries across continents, tourism in Iran has failed to realize its potential due to poor management and misplaced priorities in recent years, impeding the progress of important projects.

Speaking to Mehr News Agency on the sidelines of the groundbreaking ceremony of a tourist resort in Qazvin on Saturday, Saeed Shirkavand, deputy for investment and planning affairs at Iran’s Cultural Heritage, Handicrafts and Tourism Organization, said tourism is a driving force for sustainable development that helps create jobs “but we’ve paid no attention to it for too long.”

According to the official, “there are 1,500 incomplete projects in Iran in dire need of investment to reach fruition.” At a time when the country is looking for alternative sources of revenue to reduce its dependence on oil export earnings, the lucrative travel sector deserves more attention and must be given priority, the agency quoted him as saying.

The industry has suffered from years of international sanctions and poor marketing, which deterred both domestic and foreign investors from exploring Iran’s tourism potential.

“However, with the lifting of sanctions and the government’s efforts to curb  the foreign media’s smear campaign against Iran through active diplomacy, we’ll be able to attract the much-needed (foreign) investments,” Shirkavand said.

Emphasizing the role tourism can and should play in helping Iran out of economic morass, he warned against turning to tourism only when the going gets tough – a pattern seen in the past.  

“We shouldn’t consider developing our tourism sector just because the economy is weak (and abandon it once the economy starts growing); we need to develop it because it’s a stable source of income and creates jobs,” he said.

  Investments Increasing

Taking stock of the growth in tourism after President Hassan Rouhani took office in 2013, Shirkavand said the administration has made known that developing the key sector a priority, as evidenced by the rise in inbound tourist numbers and increase in infrastructure projects.

“In 2013 there were 118 four- and five-star hotels in the country. However, since the Rouhani administrations took charge, 28 quality hotels have opened and 175 are in under construction.”

Iran aims to attract 20 million tourists by 2025, and officials say the country needs 400 high-end hotels to cope with the influx of tourists. If the numbers reported by Shirkavand are correct, Iran needs 79 more quality hotels — and that is if the country manages to attract investors to finish the current projects.

According to Shirkavand, the National Development Fund loaned 5 trillion rials ($145 million) to investors to fund tourism projects in the last Iranian year that ended in March, more than four times the 1.2 trillion rials ($34.7 million) loaned a year earlier.

Shirkavand has long been a vocal advocate of not relying on oil export as the main  source of hard currency revenue and blames the oil-dependent economy for the lackluster growth of other industries.

Last year, he told a conference attended by representative of tourism organizations and hoteliers that “an oil-dependent economy prevents the development of other industries,” before singling out overreliance on crude oil and weak planning as major obstacles to the growth of tourism.

International crude prices have taken a hammering for almost two years and has led to serious budgeting problems for all oil exporters across the world. Iran apparently is no exception. The black gold was selling at or near $120 a barrel in the summer of 2014 but now hardly fetches $45.

The near death of oil came a year after Hassan Rouhani won the presidential elections pledging to end the international sanctions, turn the economy around, reduce inflation and cut the dole queues. His administration has succeeded in two areas – ending the crippling sanctions and curbing the 40% inflation rate. However, decent growth and jobs remain stifled due to the declining oil prices and Iran’s cursed over-dependence on crude exports.