Iran Tourism Grows 1.9% to Account for 6.5% of GDP

EghtesadOnline: Iran's travel and tourism sector grew at 1.9% to contribute 1,158 trillion rials ($8.83 billion) or 6.5% of overall GDP and 1.334 million jobs (5.4% of total employment) to the economy in 2018.

News ID: ۷۴۷۶۵۸

24 June 2019

This is according to the World Travel and Tourism Council’s annual research into the economic impact and social importance of the sector.

The WTTC report also shows international visitors spent 168,954 billion rials ($1.28 billion) in Iran in 2018. The council expects the number of international arrivals to stand at 6.5 million in 2019.

Lately, Iranian authorities have redoubled efforts to boost the tourism sector for increasing foreign currency revenues and creating jobs under the declining economic conditions, according to Financial Tribune.

The decline in national currency last year meant that travelling to and shopping in Iran became cheaper for foreign nationals.

"The development of tourism infrastructure, the considerable volume of investments in the tourism sector, the issuance of electronic visa and visa waiver for target countries could be named as the main causes of the growth in the number of foreign travelers," Ali Asghar Mounesan, the head of Iran’s Cultural Heritage, Handicraft and Tourism Organization, said.

“About 7.8 million tourists traveled to Iran in the last Iranian year [ended March 20, 2019] to register a 52.5% growth compared with the preceding year.”

Inbound Arrivals, Outbound Departures

WTTC also noted that Iraq was the main source of tourism for Iran last year, as Iraqi pilgrims visiting Iranian shrines constituted 24% of all inbound visitors.

Other major sources were Azerbaijan (17%), Turkey (8%), Pakistan (4%) and Bahrain (2%). The remaining 46% came from other parts of the world.

As for outbound departures, Turkey was the most popular destination, accounting for 41% of all visits.

It was followed by Iraq (18%), the UAE (11%), Syria and Armenia (4% each). The remaining 22% went to other countries.

According to Mounesan, about seven million Iranians travelled overseas last year, indicating a significant decline compared with the year before.

As many as 10 million Iranians travelled abroad in the fiscal 2017-18.

Although the drop in the value of national currency has helped attract more foreigners to the country, it has made many Iranian families rethink their plans for foreign trips.

WTTC's review of tourism spending in Iran in 2018 shows 93% of visitors spent on leisure purposes while 7% spent on business purposes.

The World Travel and Tourism Council ranked Iran 20th from among 185 countries in its 2017 power ranking, which evaluates countries in terms of absolute size growth measured in US dollars in the field of travel and tourism.

The latest WTTC’s new Power and Performance report, published in September 2018, looks at the performance of countries from 2011 to 2017.

The power ranking shows that Iran’s travel and tourism share in its total GDP grew around $10.4 billion over the seven-year period, making it the 19th biggest growth from among the 185 countries under study.

The figure rose to $30.7 billion in 2017 (accounting for 7.3% of Iran’s total generated GDP that year), which positioned Iran at 35th place.

Domestic spending, which is the money spent by residents of a country for both business and leisure trips inside the country, had the lion's share of all tourism expenditure and the remaining 21% belonged to international spending.

According to WTTC, while money from domestic tourism is not new money to a country, its use in terms of informing residents of their own countries’ natural and cultural attributes and engendering a source of pride is essential for social harmony.

Global Perspective

The global travel and tourism sector grew at 3.9% to contribute a record $8.8 trillion and 319 million jobs to the world economy in 2018. For the eighth consecutive year, this was above the growth rate of world GDP.

The research conducted over the last 25 years by WTTC, which represents the global private sector of travel and tourism, shows that travel and tourism in 2018:

- Contributed $8.8 trillion to the global economy

- Grew faster than the global economy for the eighth successive year (3.9% for travel and tourism versus 3.2% for global GDP)

- Generated 10.4% of all global economic activity

- Contributed 319 million jobs, representing one in 10 of all jobs globally

- Is responsible for one in five of all new jobs created in the world over the last five years

- Is the second-fastest growing sector in the world, ahead of healthcare (+3.1%), information technology (+1.7%) and financial services (+1.7%) behind only manufacturing, which grew by 4%

- Increased its share of leisure spending to 78.5% (from 77.5% in 2017), meaning 21.5% (22.5% in 2017) of spending was on business

- Increased its share of spending from international tourists 28.8%, up from 27.3% in 2017. This means that 71.2% of spending come from domestic tourists.

“2018 was another year of strong growth for the global travel and tourism sector in reinforcing its role as a driver of economic growth and job creation. For the eighth consecutive year, our sector outpaced growth in the wider global economy and we recorded the second-highest growth of any major sector in the world," says Gloria Guevara, WTTC president and CEO.

Guevara noted that in 2018, travel and tourism generated $8.8 trillion and supported 319 million jobs across the world.

“Yet again, this proves the power of travel and tourism as a tool for governments to generate prosperity while creating jobs that particularly support women, youth and other, often marginalized groups of society,” she said.

“In fact, travel and tourism now accounts for one in five of all new jobs created worldwide and is forecast to contribute 100 million new jobs globally over the next 10 years, accounting for 421 million jobs by 2029.”