As diplomatics relations between the US and Iran thaw and sanctions are lifted for the first time in 36 years, curious travellers the world over are looking to visit the destination, which is known for its rich cultural assets.
Iran is keen to exploit its ancient Persian history, said the latest WTM Global Trends Report, which was released at World Travel Market (WTM) held in London between November 2 and 5.
Euromonitor cited Iran’s 17 World Heritage Sites, as well as more unlikely tourism attractions such as 19 ski resorts and the opportunities for niche travel experiences such as mountain climbing and bird-watching, as tourism draw cards.
'Tourists on religious, historical or nature trips accounted for an estimated 90 per cent of the annual five million international arrivals to the country in 2014,' revealed the research firm’s head of travel, Caroline Bremner.
'There is certainly pent-up demand to visit Iran, and it is centrally located with good air links to Africa, Europe and Asia – so we expect tourist numbers to boom.'
According to Euromonitor data, current visitors to Iran are mainly sourced from neighbouring countries, with 1.65 million Iraqis visiting in 2014.
The next four largest source markets for Iran are Azerbaijan (1.14 million), Afghanistan (410,000), Turkey (407,000) and Turkmenistan (189,000), respectively.
However, the WTM 2015 Industry Report, which was also presented by Euromonitor at this year’s show, found the UK was a potential growth market for Iran, with 16 per cent of holidaymakers from this market revealing they were interested in visiting the destination.
The Iranian government plans to attract 20 million international visitors to Iran by 2025. Euromonitor said the government had already taken positive steps towards achieving this goal by enabling several nationalities, including French, German and Russian, to obtain a visa on arrival.
No foreign brands officially operate in the Iranian market, but this changed with the opening of two AccorHotels properties at Tehran’s Imam Khomeni International Airport (IKIA) in October – Novotel IKIA and ibis IKIA.
UAE-based Rotana is also preparing to enter the market with four properties in Tehran and Mashhad by 2018 under the Rayhaan Hotel and Resorts brand, aimed at Muslim travellers.
'With the lifting of sanctions, we are sure that all developers and operators will be racing to secure their position in one of the world’s largest untapped markets,' said Rotana’s president and CEO, Omer Kaddouri.
Euromonitor also highlighted the potential of the sharing economy in Iran’s undeserved accommodation market with an estimated 50,000 Iranian hosts registered on Couchsurfing.com, despite a lack of government enthusiasm for the service.
Although Iran is a market brimming with tourism opportunities, the report highlighted several hurdles hindering its development. The years of international isolation have left the tourism infrastructure in need of major investment,' it said. The challenges highlighted also included back-dated banking and credit-card processes, and a lingering threat of violence and instability.
WTM Global Trends Report 2015 and WTM 2015 Industry Report unveiled a number of global tourism sector trends that have wider implications for the Middle East.
The WTM 2015 Industry Report found 84 per cent of industry professionals believed major sporting events such as the Olympics and FIFA World Cup had a positive impact on the host’s tourism industry. Some argue it’s the best ‘shop window’ for a city to show off its cultural and tourism attractions although others believe it can put off tourists who are not sports fans from travelling before, during and after the event.
'The London Olympics demonstrated how a country’s tourism industry can benefit from hosting a major sporting event,' said the report. 'In 2013, the UK welcomed almost 33 million (32.8 million) overseas visitors, compared to just over 31 million in 2012 – the year of the London Olympics and 30.8 million in 2011.'
Despite this positive outcome, when UK holidaymakers were asked what impact future major sporting events such as the World Cup, Formula 1 and UEFA Euro 2016 would have on the host destinations, the response was universally negative with UK holidaymakers saying they were less likely to visit countries after these big events had taken place.
Qatar fared the worst, with 27 per cent saying they were much less likely to visit the Gulf state after it hosted the 2022 FIFA World Cup.
Eight out of 10 (83 per cent) senior travel trade executives have predicted a low-cost long-haul revolution in the aviation industry, sparked by lower fuel prices and demand for budget travel. Low-cost transatlantic flights are tipped to take off with many carriers already dabbling in this market including Iceland’s WOW air (UK to US and Canada), Canada’s WestJet (UK to Canada), Germany’s Condor and Paris-based XL Airways France.
Dubai low-cost carrier (LCC) flydubai is highlighted as a pioneer in mid-haul budget travel in the WTM 2015 Industry Report. Similarly, Sharjah-headquartered Air Arabia operates low-cost flights of up to five hours 30 minutes.
'Customers expect companies to know them better than their neighbours and engage with them in a very personalised fashion. The good news is that digital technology allows companies to individualise each customer connection at scale,' said Bernd Fauser, UK sales director, Google UK Ltd, who was quoted in the WTM Global Trends Report 2015.
The travel industry will witness a shift in one-to-one marketing, with each consumer treated individually, the report added, and tech giants and online travel agents (OTAs) will lead the way.
'OTAs such as Booking.com and Expedia are currently working on customers’ preferences to increase booking conversions and they will move to personalised mobile services next,' said Euromonitor.
'Other companies well-positioned to offer this service in the future, thanks to their vast knowledge of consumers, include Google, TripAdvisor, Apple and Facebook.'
THE SHARING ECONOMY
Peer-to-peer travel – holidaymakers staying in people’s homes booked through sites such as Airbnb, Housetrip and HomeAway – is growing at a fast rate and Airbnb is expected to facilitate more than 80 million room nights booked this year, more than double its 2014 number of 40 million, according to Euromonitor. However, the market peer-to-peer travel market is still in its infancy, with only 3 per cent of UK holidaymakers using a site like Airbnb, which reveals its huge potential.
Peer-to-peer travel, also referred to as the sharing economy, is starting to take off in China, according to Euromonitor, particularly in urban populations where pressure on infrastructure and resources makes sharing a sustainable approach for city living.
'Chinese sharing economy firms have now expanded, styling themselves after Western counterparts such as Airbnb and Uber, familiar to consumers after travelling abroad,' said the WTM Global Trends Report 2015.
'Smartphones have aided this expansion, providing users with immediate internet access and data on demand, with many millennials (digital natives) constantly connected.'
Cars, taxis and apartments are the most popular shares, facilitated by local social media sites such as Weibo and WeChat used for reviews and feedback, the report found.
It added: 'Hong Kong has seen the launch of some more unusual sharing economy travel options, such as rent-a-suitcase and hi-tech camera hire, which could transfer to mainland China.'
By Gemma Greenwood
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