1,600 Hotels Under Construction in Iran

Some 1,600 hotel projects are underway in Iran, work on many of which had started over a decade ago but made little progress due to a variety of reasons.

Speaking to Mehr News Agency, Saeed Shirkavand, deputy for investment at Iran’s Cultural Heritage, Handicrafts and Tourism Organization, said the pace of construction of these projects depends on the level of management and whether they receive the funding they need.

The administration of President Hassan Rouhani, who ran his campaign on a platform of opening Iran up to foreign investment, has made developing tourism and building hotels one of its main policies.

“By the end of the administration’s first four-year term (next summer), we’ll have built 65 four- and five-star hotels, which is about half the total number of high quality hotels in the country prior to Rouhani taking office,” Shirkavand said.

Iran has 1,140 hotels, less than 140 of which are four- and five-star establishments, which experts and insiders say has stymied the growth of the nascent tourism sector.

Officials aim to increase the country’s inbound tourists by fourfold to 20 million by 2025, a rather ambitious goal but one that authorities feel is achievable, given Iran’s untapped potential.

Observers say Iran needs at least 400 high quality lodging facilities to accommodate the projected 20 million travelers, which can help the country earn upward of $25 billion in annual revenues.

French group Accor became the first international hotel firm in nearly four decades to enter the Iranian market in October 2015 when it brought its Ibis and Novotel brands to the country, while Spain’s Melia expect to open its first-ever property in Iran on the shores of Mazandaran Province next year.

The Dubai-based Rotana hopes to open four establishments, two each in Tehran and Mashhad, by 2019.

To help incentivize investment in the hotel sector, the government announced last month that it was giving new hotels 100% tax exemption for five to 13 years, depending on the region.

ICHHTO’s previous chief, Masoud Soltanifar, who was appointed the new minister of sports and youth affairs last week, said the organization was looking into liberalizing hotel rates, which has been received well by hoteliers who long complained about the organization’s “meddling” in their business.