According to statistics from the Cultural Heritage, Handicrafts and Tourism Organization, the share of tourism industry in the Iranian GDP is nearly $119 million (2.4%), which is expected to rise to 4% in 2023. Currently, there are 475,000 Iranians working in the tourism-related industries, making up 1.2% of the total workforce in Iran. According to government plans, it should increase to 3.2% by 2023. According to statistics released by the World Tourism Organization, Iran's tourism industry grew by 12% during 2016, whereas the global tourism growth was only 4%. That is perhaps why the private sector investment in tourism during 2016 had an expansion rate of 20 to 30 percent. Nonetheless, according to a statement by the head of the Cultural Heritage, Handicrafts and Tourism Organization, only 4.6% of the world's foreign tourists visited Iran over the last two years. During 2013, approximately 4,800,000 people arrived in Iran during 2014 and 5,100,000 during 2015. There was a growth by 300,000 visitors later in 2016. Nevertheless, the Perspective Document, half through the Sixth Development Plan, was expected to attract nearly 8 million foreign tourists into Iran.
According to the World Economic Forum (WEF) on the indicators of tourism competitiveness in Iran compared to its regional contenders, Iran experienced desirable growth in many indicators over recent years. In fact, the Iranian tourism industry ranked 114th in 2011, 98th in 2013, 97th in 2015 and 93rd in 2017, reflecting a steady 21-rung growth over six years. Iran's score in tourism competitiveness index increased from 3.3 in 2015 to 3.4 in 2017. Similarly, Iran climbed from the ninth place in 2015 to the eighth place in 2017 among Middle East countries. The attractiveness of investment in the Iranian tourism industry is evident in the growing trend of tourists arriving in Iran, the favorable statistical indicators such as competitive prices, and the rising trends in other competitiveness indicators.
According to the Director General of the Office of Planning and Support for Development of Iranian Tourism, people from the Gulf countries and Iraq are less interested in visiting Iran, but European and American tourists to Iran grew by 56% from 2016 to mid-2017. Following the JCPOA, a total of 95,826 people from Western countries (mostly European) traveled to Iran from August 2015 to the next 6 months. Prior to the JCPOA, however, only 35,852 Europeans traveled to Iran between January 2013 and July 2015. Since 2013, the investment rate in the Iranian tourism industry has kept its uptrend, growing more than 6% during 2013-2016. While highlighting the constant growth over the coming years, the WHO has predicted that the upward trajectory in attracting foreign tourists to Iran will persist until 2027.
Official statistics are suggestive of a global tourism turnover amounting to $800 billion per year, of which less than 0.1% is contributed by Iran. This meager share indicates that the Iranian tourism industry has failed to appropriately introduce Iran as a tourist destination and cultural country. Owing to its ancient history and numerous intact remnants from the glorious Era of Persis Civilization, Iran has the potential to excel many countries. Mismanagement in tourism plans and political instability in the Middle East are among multiple factors weakening the Iranian tourism industry in spite of its huge capacities. Aside from the current inefficiencies, Iran has not been successful in promoting its tourism industry in overseas media.
The Iranian tourism infrastructure struggles with certain shortcomings, which can be resolved through in-depth, systematic investments. One of the goals pursued by SEMEGA is to eliminate such obstacles and raise funds to improve the tourist attraction infrastructure. There are several important drawbacks in the Iranian tourism infrastructure, including:
The rate of return on investment is long-term in tourism-related activities. This, in turn, makes it inevitable to evaluate investment projects and analyze cost-benefit in the tourism industry. Unfortunately, most investments made in this sector are not tested on a smaller scale prior to actual implementation. This has led to poor assessment of the region and potential failure of the project. Lack of market research, analysis of demand trend, insufficiently clarified target markets, economic conditions, market fluctuations and major ambiguities in upcoming forecasts have hindered the tourism firms to optimally generate capacities and ultimately desirable profitability.
A large portion of Iran's cultural heritage has remained unknown due to inefficient scientific and technical exploration in ancient sites. Similarly, ancient items have gradually eroded due to low budgets allocated to restoration and reconstruction.
The key obstacles to expansion of tourism in Iran include settlement areas for travelers, insufficient number of hotels and inns, poorly equipped hotels, recreational centers, restaurants, cafes, health and medical services.
According to many domestic and foreign experts, there is a huge capacity for growth in the Iranian tourism industry, generating revenues that keep up with oil exports. Nikola Kostic, Director of Research at Euro Monitor for the Middle East, argues: "Given the current position of Iran in the international community, it enjoys huge capacities and a bright future in the tourism industry, potentially making significant achievements in the upcoming years. With regard to its developmental capability, Iran can improve its infrastructure and face up to the transformations ahead soon to become an attractive destination for tourists intending to visit North Africa and the Middle East.” On the other hand, the WTO and UNESCO consider Iran a top 10 tourist spot owing to its numerous tourist attractions. According to National Geographic, the future of tourism in Iran seemed bleak several years ago. Since an accord was signed to curb Iran’s nuclear activities in return for sanctions relief, however, this desert flower looks set to blossom. The magazine also introduced Iran as the first destination among 16 suggestions for visiting in 2016. Iran also ranked fifth among top 10 destinations suggested by Travel + Leisure.
Experts believe that Iran has numerous attractions for tourism investment, the most important of which are: