Iran Tourism Falls Short of Full Potential

Mana Rabiee from Montreal

Tourism in North Africa and the Middle East has fallen this year because of the ongoing political upheavals there. But industry watchers say the level of foreign tourist traffic to Iran has remained mostly stable. Iran's tourism sector is on the rise, though analysts say it is far from meeting its full potential.

They may be small, but the two miniatures Deborah Rogers bought on a recent vacation to Iran hang prominently in her New York City apartment. Her favorite has an image of Saadi, the great Persian poet.

"I love him thinking off into the distance," said Rogers. "It looks as if he's just read something that he now has to contemplate."

Rogers is one of more than two million international visitors who traveled to Iran last year, that's up by more than half a million visitors since 2004.

Those visitors are spending more than $2 billion each year, nearly four times what they spent in Iran each year a decade ago.

Xu Jing is the Asia regional director for the United Nations World Tourism Organization (UNWTO). Via Skype he told VOA that Iran ranks among the top ten countries in the world for cultural and historical sites.

"The whole range of cultural products, I would say, can be compared with the rest of the world, with anywhere in the world - Greece, Italy, France, China, India. And I think they have an amazing potential for bigger scale and bigger volume of the traffic," noted Xu.

But the UNWTO also says Iran is not meeting its full tourism potential. International tourism brought more than $50 billion into the Middle East last year. Yet Iran only gets about four percent of those foreign tourist dollars. And Iran ranks low among Middle East nations for numbers of foreign visitors, on a par with war-torn countries like Iraq and Lebanon.

So Iran, says Xu Jing, has been investing heavily in its tourism sector.

"They are also looking at tourism like many other countries do - how tourism can actually help [in] mainstreaming its own national development agenda," added Xu.

Iran has also relaxed some of its tourist visa requirements. A spokesman for the Iran Special Interests Section in Washington said Iran currently approves nearly every tourist visa requested by private American citizens, as long as the applicant is not a U.S. official or does not hold a sensitive security job. The primary requirement is that they travel to Iran on an organized tour as Deborah Rogers did.

"Essentially you're cared for from start to finish. So I have said it to many people, it's incredibly easy to go to Iran," Rogers explained.

Analysts say the main challenge to Iran's tourism sector will be in changing the way Westerners feel about visiting the country. That may not be easy. A British survey of travel perceptions toward the Middle East shows Iran is among the last countries people want to visit, after only Afghanistan and Iraq.

A recent British opinion poll found Iran near the top of the list of countries people would "definitely not" visit. Yet nearly three million international visitors traveled to Iran last year, and the country is trying to widen the appeal of its tourism industry. Iran is attracting a type of tourist the industry calls "adventure travelers." They come mostly from Western nations in search of a unique experience, the kind they might not find in typical destinations like Paris or London.

To most Americans, Iran is an unlikely holiday destination. Fewer than 1,500 Americans visited Iran last year. So when Deborah Rogers, seen here in home video, vacationed in Iran last March, many of the people she met were surprised to see an actual American tourist.

"[Local Iranians were] surprised to see Americans and wondered why we came and what we thought," recalled Rogers. "That was their first question. 'Do you like it here?' "

The U.S. government does not prohibit its citizens from travelling to Iran, but it issues travel warnings about the risks of going there. American tourists like Rogers ignore the travel advisory. They're what the tourism industry calls "adventure travelers," a niche group of international tourists who avoid typical tourist locations and seek out alternative destinations.

"I think it's always a special clientele that would consider going to Iran," noted Juergen Steinmetz who heads the American Iran Tourism Association, which encourages tourism trade between Iran and the U.S. "It's not the general tourist; it's not the tourist that may be worried that much about safety and travel warnings; it's sometimes maybe more an adventurist. It's cultural and also repeat tourism I think what is contributing to this."

Industry analysts say Iran is relaxing some of its visa requirements. There's even a visa-on-arrival policy in place now for numerous nationalities, including Americans, which allows visitors from arrival points like Dubai to Kish Island - a free trade zone in Iran, without securing a visa in advance.

Ken Fish runs a travel agency in New York City which regularly offer tours to Iran. He says there is still some anxiety associated with the destination but the fear disappears once travelers encounter Persian hospitality.

"I think what happens is there's this moment when they've remembered that they've forgotten to be afraid and how much they are really enjoying the destination," noted Fish. "And I think that just elevates their level of enjoyment that much more than they would from another destination."

A tour package to Iran can cost 4,000 dollars per person for ten days. American tour operators say about 70 percent of the money goes directly into Iran's local economies. But they add Iran will probably never be a "shopping destination" for tourists. Deborah Rogers spent only two hundred dollars on souvenirs in Iran - but regrets not doing more shopping there.

"God willing I'll go back again," said Rogers. "The second time I'll know what I'm doing in terms of wanting to live with Persian art in my midst."

When you're talking about travel and tourism to Iran, you can't overlook the question of U.S. and international sanctions imposed against Tehran as part of the ongoing dispute over its controversial nuclear program. The sanctions were never meant to target Iran's travel and tourism industries, but their effect is felt in numerous ways.

Absolute Travel in Manhattan has been sending American tourists to Iran for more than a decade, in part, says company President Ken Fish, because he was able to find a tour operator in Tehran to manage things on the Iran side.

"When I selected the company that I chose to do business with, I contacted them and asked them to meet with me and on a handshake I said we're going to be doing business together. And eleven years down the road we're still doing business together," said Fish.

Travel and tourism activities are officially exempt from U.S. sanctions. But the sanctions do prevent American travel companies from sending money directly to their partners in Iran. Those wire transfers have to be cleared first through the Federal Reserve Bank of New York, which takes time and is limited to $10,000 per transaction. So business people like Ken Fish find other ways.

"That's really not a problem. We're not dealing with banks in Iran. We always have overseas banks whether they are in Europe or Dubai or some other venue," Fish explained.

The banks do charge transfer fees, however, which can cut the profit margin for smaller tour operators, like this one seen in home video.

And the sanctions also influence the spending habits of tourists in Iran, because of the lack of credit card or debit card services.

The sanctions have also led to a drawdown in Western investment. Kish Island, for example, was poised in the 1970s to become a major tourist paradise. But economist Fariborz Ghadar says that potential has not been realized.

"If you Google Kish you can find a series of very chic hotels, but in fact, some of these hotels only exist online. They haven't actually been built. Hotel construction has fallen behind - hotels which were scheduled to be completed 5 years ago," Ghadar explained.

As the Europeans leave though, other players take their place.

"There's no doubt that the Chinese to some extent will invest in this," noted Sohrab Sobhani, a business consultant, who recently co-authored an article on Iran's economy for the Harvard International Review. "This is a natural thing. When Chinese and Asians see there is a market for them in Iran there is no doubt that in addition to their investments in oil and gas they will make an investment in tourism as well."

But Fariborz Ghadar says that may not provide enough help for the tourist sector.

"When you go to China and Beijing and Shanghai you see that their hotels are all Western brands, the Meridian and the Hyatt and others," Ghadar noted. "If the firms doing business in China are Western, do you really want to import Chinese know-how into Iran?"

Despite sanctions and a loss of foreign investment, there are some positive indicators. Domestic investment in Iran's hospitality sector is said to have nearly doubled in five years with about 500 small hotels being built across the country. Also, nearly two percent of the Iranian workforce is now in the tourism industry. Most of those jobs were created in just the past decade and much of the future growth in tourism will come from Iran's private sector. (VOA News)

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