Making Iran a popular destinaton again: taking back tourism

Once the most popular destination in the Middle East, a turbulent few decades have wrecked the Iranian tourist industry. But with the end of sanctions finally opening the country to outside investment, Tehran has drawn up plans to revive the local cruise industry. Andrea Valentino talks to lecturers Dr Masood Khodadadi and Dr Magdalena Karolak about what the country has to offer, and how it might fare with an uncertain political future.

You are sat with a group of young women on a beach at sunset. They all wear bikinis and their dark hair dangles loose round their shoulders. Nearby is a bar, and a waiter is just about to bring you a glass of aragh sagi, the local spirit. You look out; ahead is the sea, empty except for a passing freighter and a group of herons flying low overhead.

Where are you? Greece? Turkey, perhaps? In fact, this scene describes a typical photo from 1970s Iran. Until the revolution, everyone from Elizabeth Taylor to a young Stephen Hawking visited the country for the remarkable history, gorgeous landscapes and cheap booze.

This is all gone now. The mayhem of the Iranian Revolution in 1979, and a terrible war with Iraq, made sure of that. Through the end of the last century, Iran was one of the most isolated places on Earth. Westerners only got to see its people through the evening news.

But with the nuclear deal finally opening the country to foreign investment, things are changing. Tourism is creeping back from its post-revolution slump. Last year, for the first time in four decades, officials announced plans to renew the Iranian cruise industry. The project has the chance to transform the local economy – and to reignite some of the nation’s lost glamour.

War and revolution

It’s about time. Iran was once the premier tourist spot in the Middle East, says Dr Masood Khodadadi, a lecturer in marketing, events and tourism at the University of the West of Scotland. “Iran was the region’s top tourist destination between 1967 and 1977,” he says. “Egypt was one of the most popular tourist destinations, and has one of the Seven Wonders of the World, but was only ranked 14th in the region. In other words, Iran was a very popular destination.”

Eager to portray Iran as liberal and progressive, Shah Mohammed Reza Pahlavi tried to develop Iran as a cruise destination. The tourist islands of Kish and Qeshm, a few miles from the Iranian mainland in the Persian Gulf, were flooded with money. Kish got its very own grand casino, and Pahlavi bought two ships, the Raffaello and the Michelangelo, from Italia di Navigazione, a defunct Genoese passenger line.

Grand plans crumbled as Iran fell to revolution, and the Shah fled to exile in the US. His Islamist replacements were less keen on supporting the cruise industry, says Dr Magdalena Karolak an assistant professor of interdisciplinary studies at Zayed University in the UAE.

“The Iranian Revolution isolated the country internationally,” she explains. “Cruise tourism, as a form of entertainment, was far removed from the agenda in the post-revolutionary social and political climate.” Nor were the shah’s other projects spared by the upheavals of the 1980s. Thanks to the Islamic ban on gambling, the Kish Grand Casino was turned into a hotel. The Raffaello ended up as a floating barracks, before being torpedoed during the Iran-Iraq War.

Throughout the 1990s and 2000s, sanctions handicapped Iranian tourism, Karolak says. “Sanctions against major Iranian banks isolated the country from the international banking systems. Money transfers were made impossible and that made investments, international partnerships and even tourist bookings difficult.” In 2003, only 300,000 tourists made it into the country, compared with the 7.5 million who visited Egypt.

Big increase

From this low ebb, the number of visitors to Iran has slowly revived. “You can see the growth,” Khodadadi states. “Roughly 3.8 million came in 2012, and in 2017 that figure grew to 6.2 million. These are not huge numbers, if you do a comparison [with] Spain, for instance. But it’s a big increase for Iran.”

Better relations with foreign powers are crucial, suggests Khodadadi. After signing the 2015 nuclear deal with the US and its allies, Iran agreed to suspend its nuclear programme in return for a loosening of the sanctions regime. These gentler economic conditions have resulted in “significant investment into the country. This is especially true in relation to the hospitality sector,” he adds. For their part, hotel groups like Accor are gobbling up property in Iran, while two local airlines have agreed to buy 73 passenger jets from Airbus.

Amid all this movement, Iran has announced an ambitious policy to revive the local cruise industry. As in the 1970s, the twin islands of Qeshm and Kish are central to their plan. Sunny, a Swedishbuilt cruise liner bought by Iran, started ferrying tourists between the islands last April. As well as space for 1,600 passengers, the ship boasts two restaurants and a cinema. Sunny is clearly a point of pride for local officials, who promised tourists an unforgettable night prior to its maiden voyage. Speaking to reporters last November, Ali Asghar Moonesan, Iranian vicepresident and head of the country’s Cultural Heritage, Handicrafts and Tourism Organization, hinted that more Turkish-built ships would arrive soon.

Meanwhile, Iran is working to boost infrastructure on the islands. Qeshm is due €700 million to fix its dilapidated port, while Qatar recently announced a deal to expand Kish Airport. This is bolstered by attempts to improve local hotels, Karolak adds. “There are plans to build 30 five-star hotels on Kish alone over the next few years,” she says. “Qeshm is less developed, but plans to build a five-star resort have also been announced.”

Complementary adventures

Although most visitors to the Persian Gulf resorts are Iranian nationals, investment is part of a broader move to lure more foreigners to the islands. Officials hope to welcome three million outsiders a year to Qeshm and Kish by 2022. Barely 80 miles apart, both islands offer pleasingly complementary adventures, Karolak explains. “Kish is more developed, with five-star hotels, modern shopping malls, golf courses and attraction parks,” she says. “Qeshm is a different experience, with ecotourism [being] a key pull. [Activities] include wildlife spotting, hiking opportunities in the valleys and canyons, and the chance to explore mangrove forests. Thanks to these differences, the islands provide varied attractions, making them a perfect combination to be visited in one cruise [on the Sunny].”

At the same time, the islands are hugged by sandy beaches and coral reefs, where tourists can glimpse exotic fish and paddle with dolphins. Historical sites, notably a 16th-century Portuguese fort on Qeshm, make the islands suitable for visitors who tire of sun and sand. Despite being part of the Islamic Republic, life off the Persian Gulf is more laidback than on the Iranian mainland, Karolak adds.

“The social restrictions on Qeshm and Kish are much less strict, which attracts people [who are] looking for a break from their daily routine,” she adds. “Nightlife is available and the dress code is less enforced. Kish is the Iranian equivalent of a Western-style resort.”

Not quite: alcohol is still illegal. But unlike other parts of the country, gender segregation on the islands is not absolute. Women smoke openly, while having their hijabs slid back to their ears.

This relaxed attitude extends to the local permit system, which allows foreigners to visit Qeshm and Kish visa -free for up to two weeks. This scheme, combined with the resorts’ duty-free status, is already paying dividends. “If workers from Dubai want to renew their visas, they need to leave the country,” Khodadadi explains. “A lot of workers from South East Asia, for instance, choose to go to Kish and spend a few days while their visas process. They’re a major contributor to the local economy.”

But can this local enthusiasm grow to include international cruise liners? After all, operators have already embraced cruising opportunities across the Persian Gulf, Karolak notes. “Ambitious plans for cruise tourism development in the Gulf have been taking shape,” she points out. “Dubai has become a regional home port for international cruise shipping lines. Abu Dhabi aims at becoming the second home port.” Dubai and Abu Dhabi are now fixtures of the international cruise circuit, with P&O Cruises and Royal Caribbean International offering regular stops there.

The sanctions are over, but it is unclear if cruise companies can repeat success in Iran. Like US hoteliers, who have no experience working in the country, cruise companies are being slow to jump into the new market. Khodadadi suggests ignorance about Iranian culture might be a factor. “When you say ‘Iran’ to people in the West, they may automatically think it’s an Arab country or a dangerous place to go.” As it stands, no foreign cruise companies currently offer stopovers in Iran, preferring to stick to dependable ports in the UAE and Qatar.

Political turmoil

Even if cruise companies do decide to move into the country, wider political difficulties might trip them up. One of the most obvious problems is the current occupant of the White House, Khodadadi observes. “A major challenge is Donald Trump’s presidency and his very aggressive foreign policy towards Iran,” he states. “Trump has made it clear that he’s going to get rid of the deal, and if that happens, it would automatically result in the collapse of the Iranian nuclear deal. That would mean the return of sanctions. If that happened, it’d cause a lot of [problems]. Foreign investors might be scared off and leave.”

Regional tensions could also scupper Iranian cruising. Caught in a proxy war with Saudi Arabia for control of the Middle East, Iranian sorties into Syria and Yemen have made it wildly unpopular among many Sunni Arabs. None of this helps the local cruise sector. Promises to sail Sunny to Dubai have so far come to nothing, while a ferry service to Oman was quickly abandoned. “If tensions continue, the Iranian cruise tourism sector may find itself confined to local itineraries and [catering] primarily to Iranian tourists,” Karolak says.

Despite these challenges, Khodadadi believes that the Iranian cruise market has huge potential. With their natural beauty and “good atmosphere”, Kish and Qeshm are an “ideal destination for international cruise liners,” he emphasises. “They might attract a different market. I think it would be [for a] less the kind of ‘sun, sea and sand’ type of tourist. But it could still be a very attractive market.” Karolak agrees, adding that without sanctions “the impediment to international tourism has been removed. This is especially important in relation to cruise tourism as the sector worldwide has [long] been dominated by a few very large international shipping companies.”

In the meantime, Iran is sharpening its pitch to maritime visitors. Hendorabi, a tiny crumb of land near Kish, is being touted as an ‘ecological paradise’ where tourists can enjoy a pristine car-free environment. Investors are also pushing health tourism, with two top-end hospitals running on Kish already. Still, it is unclear if any of this can reinstate Iran as a cruise hotspot. A change in US policy, or war with Saudi Arabia, would crush Iran’s tourism experiment in an instant. But for now, the Kish sunset is as gorgeous as ever, even as the light fades and the herons disappear into the dusk.