Iran’s middle classes are forgoing holidays abroad as international banking sanctions over Tehran’s nuclear programme add to their economic woes.
Travel agencies, facing higher business costs, have doubled the prices of tours to countries such as Turkey, United Arab Emirates, China, Malaysia, Singapore and Thailand, which had become popular destinations for Iranians during the past decade.
The vacation squeeze is the latest sign of pressure exerted by the sharp fall in the rial, which has lost more than half its value against the dollar since January because of tightened US banking sanctions and an EU ban on oil imports.
Ebrahim Mostafavi of Eli Gasht, which arranges Asian tours, said sanctions had caused a decline of more than 40 per cent in sales this year compared with last. Other travel agencies said sales of tours had fallen by about half.
“We sent 120,000 passengers abroad last summer, and only 70,000 this summer,” Mr Mostafavi said, citing the exchange rate and the government’s decision to stop providing travellers with hard currency at subsidised rates.
Holidays outside Iran have become a national obsession in the past 10 years for the middle classes, drawn to less restrictive cultures with freedoms such as lively nightlife and mixed beaches. Hotels overseas are also seen as providing better services at lower rates than their Iranian counterparts.
But a one-week package to Istanbul, including flights and breakfast, in a five-star hotel has risen from between 12m and 15m rials ($493-$617) to between 25m and 29m rials.
Holidaymakers and travel agents have also been hit by a change of currency rules. Iranians travelling to regional countries used to be able to obtain $400 – and those going to Europe $1,000 – at the official exchange rate. Today a dollar costs 12,225 rials, compared with 24,300 on the open market.
The government of Mahmoud Ahmadi-Nejad scrapped tourist dollar quotas in July, possibly in an effort to safeguard hard currency reserves.
Rising holiday costs and declining passenger numbers have led to the closure of many travel agencies, including some leading businesses. Unofficial industry figures suggest more than 30 agencies, out of 3,300 registered, are closing every month, either because of non-profitability or refusal to comply with official orders not to increase prices.
The regime says sanctions are leading to a growth in domestic tourism, but travel agencies dispute this. Iranians’ purchasing power in their own country has declined dramatically as official inflation has reached 23.5 per cent – a large underestimate according to many.
A four-day tour staying at a five-star hotel at a popular destination such as the island of Kish costs about 9m rials per person – more than many young educated employees earn in a month. The holiday market is also hit being by rising unemployment, which has reached 12.9 per cent.
Sahand Aghdaei, co-owner of Spilet Alborz, which organises domestic and foreign ecotourism, said increasing prices of foodstuff, housing, clothing and education had left many people little scope for travel. “I no longer see government employees, labourers or low-income youngsters in my tours. They used to be among my regular customers.”
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