Iran Tourism: Sector May Get Huge Boost From China In Defiance Of US Sanctions

Despite the imposition of U.S. sanctions on various sectors of its economy, Iran is enjoying something of a boom in its tourism industry – with China possibly preparing to play a big role.

Ali Asghar Mounesan, Iran’s minister of cultural heritage, tourism and handicrafts spoke to Chinese officials in Beijing over the weekend to ask them to invest in Iran’s growing tourism industry, citing the ever-closer economic ties the two Asian giants are developing.

“If Chinese investors agree, we can provide them with a parcel of land to invest in the field of construction [and] operation of tourism sites and complexes,” Mounesan told an audience that included Chinese Minister of Culture and Tourism Luo Shugang.

Mounesan further said Iran would like China to engage in research and renovation of ancient Persian monuments -- as Iran has similar cultural ties with Germany, France and Italy.

Chang Hua, China’s ambassador to Iran, who recently visited Iran’s Golestan province to discuss the tourism potential of the northeastern Iranian region bordering the Caspian Sea, told the local governor-general Hadi Haqshenas that “Iran and China are two ancient civilizations and have been trading on the Silk Road for many years, and we are pleased that these exchanges are increasing day by day.”

Haqshenas noted that with imminent air flight traffic between Gorgan in Iran's Golestan province and Aktau, Kazakhstan, “we are ready for the presence of Chinese tourists in the Golestan province.”

Chang also criticized the sanctions imposed by the U.S. on Iran. “We have always been opposed to unilateral sanctions and expressed our support for Iran,” he said.

Haqshenas cited China’s well established joint venture in the Pakistani port of Gwadar, and suggested China and Iran could arrange a similar endeavor along the coast of the Caspian Sea.

Vali Teymouri, Iran's deputy director for tourism affairs, said he hopes Iran could attract up to 1 million Chinese tourists per year, citing that Teheran’s government commenced a new visa waiver program for Chinese visitors in July 2019.

That 1 million figure would represent a huge jump from the 52,000 Chinese who visited Iran in 2018.

“We believe that the two countries have had common cultural and trade communications for a long time. So we should facilitate and improve mutual collaborations, especially in the tourism industry,” Teymouri said.

But Mounesan is even more ambitious – he said he hopes the relaxed visa rules eventually helps to attract 2 million or even 3 million Chinese tourists to Iran annually.

“We believe that the tourism industry is [capable of] generating more income than the oil industry, and that sanctions do not work in the tourism sector,” Mounesan said. “So we should facilitate and improve mutual collaborations, especially in the tourism industry.”

Of course, China already has established deep economic links with Iran’s energy industry.

Earlier this year, China agreed to invest $400 billion in Iran’s oil and gas, petrochemicals, transport and manufacturing sectors in the next 25 years.

While U.S. sanctions did lead to a temporary reduction in Chinese imports of Iranian oil from 2017 to 2018, Chinese companies nonetheless received waivers from the bans – as a result, Chinese purchases of Iranian oil has varied widely.

For example, between September 2018 and August 2019, monthly Chinese imports of Iranian crude has ranged from as high as 800,000 barrels per day in April to as low as 100,000 barrels per day in August.

As for tourism, Iran now has the world’s third fastest growing travel sector, said Afar, a U.S.-based travel magazine, behind only Tajikistan and Ecuador.

Iran attracted about 7.3 million tourists in 2018 – a nearly 50% hike from the prior year. In the first five months of this year, Iran attracted about 4 million foreign tourists, a 30% increase from the same period last year.

“Thanks to a simpler visa process and a major slide in the value of the Iranian rial, travel to Iran has grown easier and more affordable for international visitors,” Afar wrote.

Indeed, the value of the rial plunged by about two-thirds against the dollar last year

Although the U.S. State Department advises U.S. citizens not to travel to Iran, Afar noted it’s still possible for Americans to get an entry visa. GeoEx, a high-end luxury tour operator, has been taking travelers to Iran since 1993, “making it the longest-operating U.S. tour company in Iran.”

However, partly due to U.S. sanctions, few westerners are travelling to Iran anymore. Most tourists to Iran come from neighboring countries. The World Travel & Tourism Council reported that Iraq was the largest source of tourism to Iran in 2018, accounting for 24% of all visitors.

Iraq was followed by Azerbaijan (17%), Turkey (8%), Pakistan (4%) and Bahrain (2%).

Indeed, the tiny Arab state of Oman sent more visitors to Iran (30,000) than did western Europe (26,000) during that period.

Teymouri noted the number of Turkish visitors jumped by 35% in just one year – despite the continuing turmoil in adjacent Syria.

In 2018, Iran's travel and tourism sector contributed about 1.16 trillion rials ($8.83 billion) to the economy, or 6.5% of overall gross domestic product.

Under Iran’s “2025 Tourism Vision Plan,” the country hopes to reach 20 million tourist arrivals in 2025 – boosted partly by the Chinese.

"The development of tourism infrastructure, the considerable volume of investments in tourism sector, along with the issuance of electronic visa and visa waiver for target countries could be considered as the main causes of the growth in foreign travelers," Mounesan said.

To prepare for an influx of tourists, 12 hotel projects valued at 16 trillion rials ($380 million) have commenced in northwest Iran. These properties are expected to create a total capacity of 961 beds and about 2,000 new jobs.

Aside from U.S. sanctions, Iran’s repressive government and status as an alleged sponsor of terror in other countries has created a very negative image of Iran in many western minds.

"It is a country that is often portrayed as unwelcoming, but the reality is quite the opposite," said Jenny Gray, the global product and operations manager of Intrepid Travel of Australia. "Iranians are warm, friendly and eager to show off their country to foreigners. The feedback from our travelers is a testament to this."