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, according to the latest data from the World Travel and Tourism Council.
Travel and tourism accounted for 5.8% of Iran’s GDP ($62.5 billion) in 2019. The sector’s contribution to employment also increased from 1.2 million (4.8% of total jobs) to 1.29 million (5.1% of total jobs), indicating to 7.6 percent increase from 2020 to 2021.
The sector contributed 1.82 million jobs (7.2% of total jobs) in 2019.
Spending by international visitors fell 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) exports) in 2021.
This is while spending by domestic travelers decreased by 39.7% from $37.1 billion in 2019 to $22.4 billion in 2020, but increased by 48.9% to $33.3 billion in 2021.
In 2021, Iraqis topped the list of visitors to Iran with 34% of the total visitors. Visitors came from Turkey with 15%, then Pakistan with 10%, Azerbaijan with 9%, and Kuwait with 2%.
In 2019, Iraqis topped the list with 44%, followed by visitors from Azerbaijan with 15%, Turkey with 9%, Pakistan with 5% and Armenia with 2%.
As for departures abroad, 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%.
Striking the epidemic and penalties
For a long time, the unfavorable state of Iran’s tourism sector was talked about and compared to neighboring countries, until Covid-19 struck the final blow, reads an article in Ayandenegar, a monthly magazine published by the Tehran Chamber of Commerce.
Besides the pandemic, economic sanctions and heightened tensions between Iran and the United States have reduced the number of foreign tourists visiting Iran.
The number of tours from the United States fell to zero, and the number of tours from Europe fell sharply.
Iran’s tourism industry has hardly survived, thanks to domestic flights and the limited number of outbound trips and tours.
Covid-19 has badly damaged the industry; Hotels and travel agencies suffered huge losses and unemployment increased as a result.
According to union officials, Iran had more than 5,000 travel agencies in the 2020-2021 fiscal year and there were 2,000 union units in Tehran, but only about 10% are now operating.
Some travel agencies have about 100 people on their payroll, but the number is down to 10 now.
Under these circumstances, many countries have tried to rescue the tourism industry by using government support to boost start-up tourism companies. Startups in the hotel and tourism industry are one booming case that has attracted increasing interest by introducing new products, services and technologies into the market.
Covid-19 has had a devastating impact on the tourism industry across the world, so Iran and all countries are working to revive tourism.
World Travel and Tourism Council data shows that the contribution to global GDP rebounded by 21.7% in 2021 from $4,775 billion (5.3%) in 2020 to $5.812 billion (6.1%) after seeing a massive decline of 50.4 % from $9,630 billion in 2019.
Globally, the total number of jobs in travel and tourism decreased by 18.6% from 333 million in 2019 to 271 million in 2020. The number increased by 6.7% in 2021 to 289 million jobs in 2021.
Expectations for a return to pre-Covid levels in 2019 are mainly beyond 2024 due to new variables and ongoing changes in travel restrictions. With the advent of the new Omicron variant, restrictions have again been ramped up and the recovery process for international travel has slowed.
In fiscal year 2021-22, coronavirus vaccination was a source of encouragement due to the unfavorable situation and with the emergence of Omicron, concerns resurfaced.
Under these conditions, the Nowruz financial holidays 2022-23 (March 21-April 3) may improve the situation of Iran’s tourism industry to some extent.
Chairman of the Tourism and Related Industries Committee of the Iranian Chamber of Commerce, Industry, Mines and Agriculture Ali Akbar Abdul-Malki says that the tourism industry in Iran and the world has been going through difficult times for three years.
He added that “in the 2020-2021 fiscal year, about 95% of companies in the tourism field were closed.”
The year 2020 was the worst for the global tourism industry, the World Tourism Organization said, with the number of tourists dropping by 73%.
In 2021, the numbers increased by 4% compared to the previous year, but they 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 state of the countries they travel to,” Abdelmalek explained.
“If there are changes and developments in favor of the tourism industry, this goal will be achieved by creating a plan for the private sector. The government’s approach should be to boost tourism and adopt strategies that prevent the industry from being affected by the pandemic.”
Early estimates of the Iranian Chamber of Commerce, Industry, Mines and Agriculture put the losses incurred 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 largest losses, accounting for 88.6% of all losses in the tourism industry.
Travel agencies followed, accounting for 3.4% of the total losses.
Jamshid Hamzazadeh, president of the Iranian Hoteliers Association, said last year that due to financial problems, the industry had to undergo a significant amount of downsizing as a result of Covid-19.
“About two-thirds of the employees have been hired, and most of them are skilled and educated,” the news portal of Tehran’s Chamber of Commerce, Industry, Mines and Agriculture, Tccim.ir, quoted him as saying.
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 GDP was 6.8% in 2019.
Before the pandemic, about 1 million Iranians traveled abroad while 20 million traveled within the country with a total of 75 million nights stay during the two months from the beginning of the twelfth month of the Iranian year until the end of the first month of the month. The following year (peak travel season in Iran) on average.
A total of 8 million foreign tourists (mostly from neighboring countries) visited Iran in the 2019-20 fiscal year, making the country the third largest tourist destination in the world, according to this report.
About 80% of tourism companies in Iran are small and most of their employees are not covered by insurance.
ICCIMA expects the impact of Covid-19 to last five to seven years.
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The collapse of international tourism due to the coronavirus pandemic could cause a loss of more than $4 trillion in global GDP for 2020 and 2021, according to a report by UNCTAD published on June 30.
The estimated loss resulted from the direct impact of the epidemic on tourism and its multiplier effect on closely related sectors.
The report, submitted jointly with the United Nations World Tourism Organization (UNWTO), says international tourism and its related sectors incurred an estimated loss of $2.4 trillion in 2020 due to the direct and indirect effects of the sharp decline in international tourist arrivals.
With Covid-19 vaccines emerging more in some countries than others, the report says tourism losses have fallen in most developed countries but worsened in developing countries.
According to the report, the uneven spread of vaccines amplifies the economic hit that tourism has suffered in developing countries, where it can account for up to 60% of global GDP losses.
The report said that 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.
But experts do not expect international tourist arrivals to return before Covid-19 until 2023 or later, according to the World Tourism Organization.
The main drawbacks are travel restrictions, slow virus containment, low traveler confidence, and a weak economic environment.