Is it Time to Invest in Tourism and Hospitality in Iran?
By Peter Varga, Assistant Professor at EHL
Consider this: Iran, the cradle of the ancient Persian Empire, has great potential for tourism and hospitality but the development of these sectors in the country has been far from linear and that remains the case today, mainly due to geopolitics.
In 2017, some six million foreign tourists visited Iran, mainly traveling to areas and cities to see archaeological sites such as Persepolis, as well as for cultural reasons (Isfahan, Shiraz, and Yazd, among others) and recreational attractions (the resort island of Kish in the Persian Gulf). The country has 22 UNESCO world heritage sites. As most tourists arrive in the country on organized tours, individual travelers are rather rare.
Despite the growing interest in international tourism to the country, only two internationally-recognized hotels have been operating in the country: the Accor group's Ibis and Novotel hotels, both at Teheran airport. When the hotels opened in October 2015, Sébastien Bazin, Chairman and CEO at AccorHotels, was quoted as saying that the brands were looking at the"huge growth potential" in Iran which is home to almost 80 million people. Dr Mehdi Jahangiri, Chairman of Aria Ziggurat Tourism Development Company, hailed the agreement with AccorHotels as "a prosperous beginning."
Other hotel chains, such as Melia (Spain) and Rotana (UAE), have plans for hotels in the country but those have yet to be built. There are some local offerings, of course, but these are limited: for example, the Abbasi hotel in Isfahan, a former caravanserai from the seventh century, transformed into a luxury hotel in the 1950s by André Godard.
Hence, the quality and quantity of hotels which could cater for international visitors remain insufficient to accommodate of the increasing numbers of tourists, particularly in context of the country's ambitious 2025 tourism plans as the country aims to attract 20 million international tourists annually.
Against this backdrop, École hôtelière de Lausanne recently took part in a pioneer initiative in Teheran to discuss possible cooperation with Iranian tourism educators and experts, with the aim of meeting the anticipated growing demand for hospitality professionals. The initiative was discussed at Isfahan University of Technology, the leading house for the Iran-Switzerland Scientific Cooperation Project, aimed at initiating joint research projects between Iranian and Swiss universities.
Potential avenues for cooperation between EHL, a leading hospitality school, and the University of Applied Sciences and Technology in Teheran (UAST), include developing research links, as well as curriculum development at a future hospitality school which UAST is planning to set up on Kish Island.
Iran's plans to attract 20 million foreign tourists each year will require some profound changes in the development of its hospitality and tourism sector. Although the country's cultural attractions and natural beauty are breathtaking, Iran's hospitality industry is not ready to host such large numbers of foreign tourists.
Despite the fact that international airlines and major hotel chains are increasingly interested in tourism and hospitality in Iran, the risks remain concerning geopolitical tensions in the region. While the jury is still out on whether these tensions will affect tourism development in the near future, Iranian tourism authorities and international tourism entities are well aware of the country's potential and its urgent need for infrastructure and service-oriented hospitality development.