March 6, 2015 / 6:23 PM / in 3 years

Iran tourism sector aims to rebuild as international tensions thaw

BERLIN (Reuters) - Iranian businessman Cyrus Etemadi has had a stand at Berlin’s ITB travel trade fair every year for more than 20 years, even when tension with the West meant few tourists visited the former ancient kingdom of Persia.

As the pragmatic President Hassan Rouhani, successor to hardliner Mahmoud Ahmadinejad, tries to reverse the path of antagonism to the West, Etemadi hopes he can rebuild his tour business, Cyrus Sahra, to its former strength.

“I used to have 70 people working with me, and we had 10,000 guests a year,” he told Reuters on Friday at the ITB, the world’s biggest travel trade fair.

“When Ahmadinejad came, there were fewer tourists every day, and then there were none,” Etemadi, 75, said.

Iran made it onto the top destination lists of major publications such as The Financial Times and The Guardian last year thanks to sights that include 2,500-year-old ruins at Persepolis near Shiraz and 16th-century Islamic architectural gems in Isfahan.

But it will be some time before Iran becomes a mainstream destination given strict Islamic regulations and the ongoing impact of sanctions.

Under Iran’s Islamic Sharia law, imposed since its 1979 Islamic revolution, women are obliged to cover their hair and body, unmarried couples may not share a hotel room and alcohol is banned. Western credit cards also don’t work, meaning foreigners have to bring cash.

POSITIVE SIGNS

“They do have some challenges, especially in rebuilding their image and how they appeal to others,” said Taleb Rifai, head of the UN World Tourism Organization (UNWTO) and recently back from Iran.

“But it’s a fantastically rich country, when it comes to cultural heritage, one of the richest civilizations mankind has ever seen,” he said, adding he welcomed moves to introduce visas on arrival for around 27 countries.

Rifai, Etemadi and others at the ITB said there were early positive signs for tourism as Iran becomes more open and Rouhani’s administration aims to double annual income from it to $10 billion.

The number of international tourists arriving in Iran jumped 24 percent to about 4.8 million in 2013, according to the UNWTO. Figures for 2014 are not yet available.

Travel and tourism directly accounted for about 2.2 percent of Iran’s GDP in 2013. The sector’s contribution to the economy is expected to grow by an average 5.7 percent per year through 2024, according to the World Travel and Tourism Council.

Reflecting its ambition to grow the sector, Iran booked an entire hall at the ITB for the first time this year, highlighting its cultural heritage, 17 UNESCO World Heritage sites and picturesque landscapes ranging from mountains to deserts and coastal plains.

“You can see the massive uplift in tourism that occurred in other countries such as Myanmar when they came in from the cold,” said Caroline Bremner, head of tourism and travel research at Euromonitor. “But Iran is not there yet.”

MORE TOURS AND FLIGHTS

German tour operator Gebeco, which focuses on students and adventure tours, tripled its Iran offering this year and added a further 15 percent after trips sold out.

Iranian tour operator Pasargad Tours, which organizes trips for about 10,000 to 12,000 travelers per year, says it is seeing a renaissance of demand for cultural travel.

“Business has been booming in the past two years,” said Karan Jami, marketing executive at Pasargad, saying trips were overbooked for 2015 and 2016.

German airline Germania now offers twice-weekly flights to Tehran from Duesseldorf and Berlin. Late last month, it launched a route from Hamburg to Mashhad, Iran’s second largest city and home to a beautiful shrine complex.

“There some green shoots going on in Iran, so it seems to make sense to fly there,” Germania CEO Karsten Balke said, adding he was also banking on demand from Iranians traveling to Germany to visit relatives.

The organizers of the ITB trade fair, which has more than 10,000 exhibitors from 186 countries, also said they were interested in having Iran as its official partner country.

Etemadi, now with a firm of 10 people, organized trips for about 600 guests last year. “I think this year it will be more than 1,000. But that is still a long way from 10,000.”

Additional reporting by Peter Maushagen and Parisa Hafezi in Ankara; Editing by Tom Heneghan

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