November 27, 2022

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Recovery in Travel & Tourism

The total contribution of travel and tourism to Iran’s GDP increased by 40% in 2021 compared to the previous year from 3.1% or $34.4 billion to 4.1% or 48.1 billion, latest data released by the World Travel and Tourism Council show.
Travel and tourism had a 5.8% share in Iran’s GDP ($62.5 billion) in 2019. The sector’s contribution to employment also increased from 1.2 million jobs (4.8% of total jobs) to 1.29 million (5.1% of total jobs), indicating a 7.6% rise from 2020 to 2021.
The sector contributed to 1.82 million jobs (7.2% of total jobs) in 2019.
International visitors’ spending declined by 81.6% from $10.3 billion (9.4% of total exports) in 2019 to $1.9 billion (1.9% of total exports) in 2020, but rebounded by 31.3% to $2.5 billion (2.6% of total exports) in 2021.
This is while domestic travelers’ spending declined by 39.7% from $37.1 billion in 2019 to $22.4 billion in 2020, but rose by 48.9% to $33.3 billion in 2021.
In 2021, Iraqis topped the list of visitors to Iran, accounting for 34% of total visitors. They were followed by visitors from Turkey with 15%, Pakistan with 10%, Azerbaijan with 9% and Kuwait with 2%.
In 2019, Iraqis also topped the list with 44% followed by visitors from Azerbaijan with 15%, Turkey with 9%, Pakistan with 5% and Armenia with 2%.
As for outbound departures, Turkey topped the list of destinations for Iranians in 2021, accounting for 71% of all departures followed by Iraq with 13%, the UAE with 6%, and Syria and Armenia with 2%.
Turkey also topped the list in 2020 with 52%.



Hit by Pandemic, Sanctions

For a long time, the unfavorable state of Iran’s tourism sector has been talked about and compared to the neighboring countries, until the Covid-19 hit the final blow, reads an article in Ayandenegar, a monthly journal published by Tehran Chamber of Commerce.
Along with the pandemic, economic sanctions and rising tensions between Iran and the United States have also reduced the number of foreign tourists visiting Iran.
The number of incoming tours from the United States dropped to zero and those from Europe dropped sharply.
The tourism industry in Iran has barely survived, thanks to domestic travels and the limited number of foreign trips and tours. 
Covid-19 has now severely damaged the industry; hotels and travel agencies have borne heavy losses and unemployment has increased consequently.
According to union officials, Iran had more than 5,000 travel agencies in the fiscal 2020-21 and 2,000 guild units were based in Tehran, but only about 10% are now active.
Some travel agencies have about 100 people on their payroll, but the number has declined to 10 now.
Under the circumstances, many countries tried to save the tourism industry by using government support to boost tourism startups. Startups in the hotel and tourism industry are one of the thriving cases that have attracted increasing attention by introducing new products, services and technology in the market.
Covid-19 has had a devastating effect on the tourism industry around the world, therefore Iran and all countries are working for the revival of tourism.
The World Travel and Tourism Council data show contribution to the world GDP rebounded by 21.7% in 2021 from $4,775 billion (5.3%) in 2020 to $5,812 billion (6.1%) after experiencing a whopping 50.4% decline from $9,630 billion in 2019.
Globally, the total number of jobs in travel and tourism declined by 18.6% from 333 million in 2019 to 271 million in 2020. The figure rose 6.7% in 2021 to 289 million jobs in 2021.
Forecasts for the return to pre-Covid levels in 2019 are mainly for after 2024 due to new variants and constant changes in travel restrictions. With the advent of the new Omicron variant, restrictions intensified again and slowed international travel’s recovery process. 
In the fiscal 2021-22, the coronavirus vaccination was a source of encouragement due to the unfavorable situation and with the rise of Omicron, worries resurfaced.
With these conditions, the fiscal 2022-23 Norouz holidays (March 21-April 3) may improve the situation of the Iranian tourism industry to some extent.
Chairman of Tourism and Related Industries Commission of the Iran Chamber of Commerce, Industries, Mines and Agriculture Ali Akbar Abdolmaleki says the tourism industry in Iran and the world has been going through hard times for three years.
“In the fiscal 2020-21, about 95% of businesses in the field of tourism were closed,” he added.
The World Tourism Organization has said that 2020 was the worst year for the global tourism industry, as the number of tourists fell by 73%. 
In 2021, the numbers increased by 4% compared to the previous year, but it will not return to the pre-Corona level by 2024.
“The pace of improvement in tourism around the world is due to varying degrees of travel and transportation restrictions, vaccination rates and travelers’ confidence about the condition of the countries they are traveling to,” Abdolmaleki explained.
“If there are going to be changes and developments in favor of the tourism industry, this goal will be achieved by creating a private-sector plan. The government’s approach should be to boost tourism and adopt strategies that prevent the industry from being harmed by the pandemic.”



Heavy Losses

Early estimates by Iran Chamber of Commerce, Industries, Mines and Agriculture put losses suffered by Iran’s tourism industry at 320.94 trillion rials ($1 billion) due to the Covid-19 pandemic from February 2020 to March 2021.
Accommodations (hotels, guesthouses, etc.) suffered the highest losses, accounting for 88.6% of all losses in the tourism industry.
Travel agencies followed, accounting for 3.4% of total losses.
Jamshid Hamzehzadeh, the head of the Iranian Hoteliers Association, said last year that due to financial problems, the industry has had to undergo a great deal of downsizing as a result of Covid-19.
“About two-thirds of staff members have been laid out, most of whom were skilled and educated,” he was quoted as saying by the news portal of Tehran Chamber of Commerce, Industries, Mines and Agriculture,
According to ICCIMA, a total of 44,138 people lost their jobs in the tourism sector during the period under review, again with accommodations accounting for the lion’s share (21,154 people or 47.9%) followed by travel agencies (6,070 people or 13.8%).
According to the chamber, the share of tourism in Iran’s gross domestic product (GDP) stood at 6.8% in 2019. 
Before the pandemic, about 1 million Iranians would travel abroad while 20 million traveled inside the country with a total of 75 million nights of stay during the two months from the beginning of the 12th month of the Iranian year to the end of the first month of the following year (peak traveling season in Iran) on average.
A total of 8 million foreign tourists (mainly from neighboring countries) visited Iran in the fiscal 2019-20, such that the country was the third biggest tourist destination in the world, according to this report.
About 80% of tourism businesses in Iran are considered small and most of their employees are not covered by insurance.
ICCIMA expects the impact of Covid-19 to last between five and seven years. 



Home to 26 UNESCO Heritage Sites

Iran is home to one of the world’s oldest civilizations. With 26 cultural and natural UNESCO heritage sites, Iran is placed at the 10th global spot. Its list is dominated by palaces, bazaars, sites of worship, old water systems and remains of the historic Persian Empire.
The newly inscribed Trans-Iranian Railway connects the Caspian Sea in the northeast with the Persian Gulf in the southwest and crosses two mountain ranges as well as rivers, highlands and four climatic areas.
The crash in international tourism due to the coronavirus pandemic could cause a loss of more than $4 trillion to the global GDP for the years 2020 and 2021, according to an UNCTAD report published on June 30.
The estimated loss has been caused by the pandemic’s direct impact on tourism and its ripple effect on sectors closely linked to it.
The report, jointly presented with the UN World Tourism Organization (UNWTO), says international tourism and its closely linked sectors suffered an estimated loss of $2.4 trillion in 2020 due to the direct and indirect impacts of a steep drop in international tourist arrivals.
With Covid-19 vaccinations being more pronounced in some countries than others, the report says tourism losses reduced in most developed countries but worsened in developing countries.
According to the report, the asymmetric rollout of vaccines magnifies the economic blow tourism has suffered in developing countries, as they could account for up to 60% of the global GDP losses.
The tourism sector is expected to recover faster in countries with high vaccination rates, such as France, Germany, Switzerland, the United Kingdom and the United States, the report said.
But experts don’t expect a return to pre-Covid-19 international tourist arrivals until 2023 or later, according to UNWTO.
The main barriers are travel restrictions, slow containment of the virus, low traveler confidence and a poor economic environment.