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Iran tensions

Hotels empty as tourists shun Iran over geopolitical tensions

Industry hit by protests, plane shootdown and threat of war with US

Demonstrators in Tehran on Jan. 3 hold pictures of Iran's Supreme Leader Ayatollah Ali Khamenei during a protest against the killing of Qassem Soleimani, head of the elite Quds Force.   © Reuters

TEHRAN -- Just a few months ago, travelers from Europe and Australia would sit and sip tea with young locals in the garden of a hostel in central Tehran. Now, the See You in Iran Cultural House is eerily quiet.

"All our rooms have been empty in the past few days," Navid Yousefian, the hostel director, told the Nikkei Asian Review. "Since November, our monthly earnings have declined by 80%."

Iran has been hit by domestic strife in recent months, and recently teetered on the brink of a full-blown conflict with the U.S.

Hundreds of people were killed by security forces during a wave of protests across the country over higher fuel prices in November. This was followed by the U.S. killing of Gen. Qassem Soleimani, the head of the Islamic Revolutionary Guard Corps' overseas operations, on Jan. 3. Iran retaliated days later by firing dozens of missiles at Iraqi military bases housing U.S. troops.

On Jan. 8, at the height of the confrontation, Ukraine International Airlines Flight 752 was shot down shortly after takeoff from Tehran, killing all 176 passengers and crew. Officials sparked more outrage and protests by denying involvement in the crash, before admitting two days later that Iran had fired two surface-to-air missiles at the plane.

"We were recovering gradually from the impact of the November protests," Yousefian said. "But after the recent incidents, people just packed and left."

All U.S. and Canadian travelers canceled trips to Iran after the downing of the jet, Hormatollah Rafiei, head of the Association of Air Transport and Tourist Agencies of Iran, was quoted as saying by Iran's Labour News Agency. He added that 80% of bookings from Australia and 60% of those from Europe and Asia had been called off.

Ali Asghar Mounesan, Iran's Cultural Heritage, Handicrafts and Tourism minister, said this month that the situation was a "crisis" for tourism, adding the government is taking measures to improve Iran's international image and promote the sector.

A total of 4,998,215 tourists visited Iran during the March-September period -- a 26% year-on-year rise, according to the tourism ministry. They came from places including Iraq, Azerbaijan, Afghanistan, Turkey and Pakistan.

Tourism made up about 6.5% of Iran's gross domestic product in 2018, according to the World Travel and Tourism Council. It is a vital source of income amid U.S. sanctions on critical areas of the country's economy such as energy, shipping, shipbuilding and finance.

Mohammad Sajjadi, a tour guide in the city of Isfahan -- about 400 km south of Tehran -- said two groups of Slovenians and Canadians canceled their travel plans.

"There was a possibility of war," Sajjadi told Nikkei. "They said the situation is not good. 'We won't be able to come,' they said."

A man takes a boat on a lake in a tourism area of Iran's Kurdistan Province. (Photo provided by See You in Kurdistan hostel)

Hotels in the popular tourist destination of Shiraz are also facing a crisis

"Only 5% of hotels in the province are booked. This is a disaster for the hotels," Seyyed Hassan Siadatan, head of the Association of Fars Province Hotel Owners, was quoted as saying by the ILNA.

Siadatan said the cancellations also included visitors from states on the Persian Gulf. An increasing number of people from this region have visited Iran in recent years for both medical and religious purposes.

Soroush Parhami, the founder of Parhami Traditional House in Shiraz, told Nikkei that business owners there are concerned that tourists may not return anytime soon.

"My colleagues say we're back to before the time of [President Mohammad] Khatami, when the shadow of war had eroded all the trust in Iran," he said, referring to the country's leader from 1997 to 2005.

Parhami added that backers with plans to put money into traditional villages are now investing in foreign currency and gold.

Mina Jazayeri, director of the See You in Kurdistan hostel and art residency in Kurdistan Province, said the guesthouse had been doing well since its opening in August, but arrivals have now "stopped altogether."

Prompted by their interest in Kurdish culture, Jazayeri worked with Yousefian in Tehran to establish the hostel in the border city of Marivan.

"We're going to wait until mid-March to see how conditions change. If it looks better, we'll go on... Otherwise we'll have to shut our hostels down," Yousefian said.

"We don't feel it's morally right to say Iran is safe now," he said. "We just want tell the world that we hope to see you in Iran soon."

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