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More Orderly Shape Awaits Travel Sector

Even though those who have their travel plans just around the corner will incur losses, the new forex policy is expected to gradually reduce travel costs
Travelers will obtain their currency at exchange shops at a rate 5% higher than what supply and demand will set.  Travelers will obtain their currency at exchange shops at a rate 5% higher than what supply and demand will set.
Once enforced, those fake travelers who served the interest of other groups by proffering their allocated currency will be eliminated

Following the implementation of new forex policies as part of which subsidized foreign currency for overseas trips will be phased out, the outbound travel market is expected to face a slump for a while but begin to pick up again at more reasonable costs, according to the Travel Agents Guild Association. 

Akbar Ghamkhar, a member of the association, said foreign journeys will gradually become cheaper once the forex market stabilizes, ISNA reported. 

"Even though those who have their travel plans just around the corner will incur losses, the costs of traveling abroad will gradually go down after a period of 10 to 20 days," he said.

Those heading for neighboring and distant countries could receive €500 and €1,000 respectively at the official rate, but the currency will be provided at free market rates as per the new package that was to take effect on Tuesday. 

Travelers will obtain their currency at exchange shops at a rate 5% higher than what supply and demand will set.  

The details of the plan have not been announced yet but the amount to be paid is expected to have a cap, most probably the same €500 and €1,000.

This raises the question how outbound travel will become more affordable when tourists have to obtain their currency at a higher rate. 

Ghamkhar explained that travel agencies paid for hotel and other services in the country of destination at free currency rates that had soared to over 110,000 rials per US dollar recently. But the rail has been regaining value since the new package has been announced and is expected to stabilize at lower rates in a few days. 

"This will naturally affect the price of foreign tours," he said. 

  No More Fake Tourists 

Morteza Qorbani, the association's secretary, pointed to another plus point of the new policy. 

"Once enforced, those fake travelers who served the interest of other groups by proffering their allocated currency will be eliminated," he said. 

This, according to him, will also eventually lead to a reduction in the price of flights. 

"As this group, whose only purpose by traveling was to receive the money, loses interest in such trips, flight cancellations will rise and the prices will drop," he said. 

The subsidy paid for travel money was widely criticized for leading to fraud and massive outflow of currency at a time that the government was under huge financial pressure. 

The gap between the official and free market forex rates had widened so substantially that prompted illegal trade of travel currency. Besides, pundits insisted that it was ill-advised to deplete the country's hard currency reserves for traveling. 

Although the move has been hailed as a positive step, it has also been pointed out that the financial impact of the money offered for traveling was not actually a big concern when compared to other complications caused by the previous policy.  

Ghamkhar said much of the fraud stemmed from the imports sector. 

"The amount of travel currency was insignificant and offered aid to tourists at a time when money changers were banned from activity and the rates were in an upward spiral," he said. 

  False Figures 

Iran's Cultural Heritage, Handicrafts and Tourism Organization, also reacted to claims that billions of euros have been taken out of the country by outbound tourists. 

Ali Asghar Mounesan, the ICHHTO chief, denied the validity of such figures earlier in a television program, asserting that the amount has been overestimated.

"The figures are calculated by multiplying nine million outbound tourists by €1,000 that they can receive [supposedly], while around half of this group is made up of religious travelers who are not eligible to receive that amount," he said. 

Over two million out of the nine million outbound tourists are those who travel to Iraq for a few days on the occasion of Arbaeen, the 40th day of mourning after the martyrdom anniversary of Imam Hussein (PUBH), he noted. 

The latest figure by the Central Bank of Iran indicates that only €242 million euros have flown out through tourism, according to Mounesan. He called for more clarification by the CBI to clear the air. 

ICHHTO has published Mounesan's statements in its website while apologizing for the confusing data that has been circulating.

 

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