Hotelier Decries Licensing Vacation Rentals

Hotel owners blame low occupancy rates and loss of revenue on the prevalence of vacation rentals, which are more affordable
While they proliferate in northern provinces, such as Mazandaran and Gilan, vacation rentals can now be found across the country.While they proliferate in northern provinces, such as Mazandaran and Gilan, vacation rentals can now be found across the country.

The head of Tehran Province's Association of Hotel and Hotel Apartments has criticized a decision to license vacation rentals, describing the move as "poisonous" and a threat to the survival of the hotel industry.

"This is poisonous to [the industry's] survival … We won't be able to continue like this," Mohammad Ali Farrokhmehr, the head of the association, told ISNA in interview published online on Monday.

A vacation rental is the short-term renting out of a fully-furnished accommodation, from a house or an apartment in the city to a cabin in the woods, by the homeowner. They are oftentimes seen as an affordable alternative to hotels, especially in a country like Iran where hotels are accused of overcharging and failing to provide services in accordance with their star rating.

While they have never been illegal, vacation rentals never operated under the strict supervision of Iran's Cultural Heritage, Handicrafts and Tourism Organization, or any other entity for that matter.  However, as of last week, vacation rentals in Tehran Province are required to apply for a license to operate, thereby legalizing their operations.

Farrokhmehr questioned whether a city like Tehran needs vacation rentals, saying: "Tehran isn't suffering from a lack of hotels; its problem is lack of quality (four- and five-star) accommodation."

Hoteliers have long complained about the prevalence of vacation rentals, blaming them for the dwindling occupancy rates.

“Hotel occupancy rates have taken a hit because people opt to stay in vacation homes, since the government recognizes their (homeowners) right to work,” Jamshid Hamzezadeh, the president of Iran’s Hoteliers Society, said last year.

“The notion of quality in these facilities is meaningless, because they are not monitored by ICHHTO,” he added.

While at first they were only found in northern provinces, such as Mazandaran and Gilan, vacation rentals can now be found all across the country.

Tourism officials, namely Morteza Rahmani Movahed, deputy for tourism at ICHHTO, have tried to assuage hotel owners' fears by saying that vacation homes and hotels have their own customers, “as such, they don’t encroach on each other’s territory”.

In a meeting last year with hotel owners, Movahed pointed to the popularity of vacation homes in many countries and said holiday homes have been in operation for 40 years across the planet, with excellent results.

“It’s logical to implement projects that have produced results in other countries. We need to learn and reproduce successful ideas,” he added.

Nevertheless, critics argue that while four- and five-star properties might not be affected by vacation rentals, lower quality hotels will definitely feel the pinch.

Iran’s lack of acceptable lodging facilities is often mentioned as a major factor hampering the efforts of the government to become a top tourist attraction. Therefore, allowing “licensed homeowners” to rent out their property will no doubt help alleviate some of the pressure on the industry.

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