In the Name of God, the Compassionate, the Merciful

The Development of Tourism Industry in Iran

Speech Delivered by Dr. Hossein Abdoh Tabrizi on August 5, 2000 at Horwath’s Workshop, Laleh Hotel, Tehran

I deem it an honor to be able to address you here today. Thank you for inviting me to give the opening address to this workshop. It is a privilege to be involved with a discussion representing the tourism industry, which can earn more foreign exchange for Iran than even our oil industry. That is a measure of how important tourism may become to Iran. I know all you industry people can outline much better than me why the tourism industry is so important and how it fits into our vision for the development of Iran, our regions, and our workforce. Of course, the reward of a thing well done is to have done it.

Much has been done in recent years, but I challenge you not to rest on our fulfillment but to continue to strive towards even more elevated goals. The only way to achieve our purpose is to take small actions everyday. In the end, they all add up. We all have a vision for the tourism industry in Iran, and must follow that purpose to get the ends we desire. Tourism industry is our life, with a promise that we have to fulfill it.

Today, quoting Mr. Moaezedin, the head of Iran Touring and Tourism Organization (ITTO), we face a historic challenge. We must overcome the economic and social problems of hosting foreign tourists in Iran. By virtue of experienced partner’s assistance, such as Horwath, Iran is today in a position to perform a major part of the necessary reconstruction work in its tourism industry through its own effort. But for this, too, we need continued partnership with people like our Austrian friends. If we can combine our intellectual and material resources for this task, then together we can invest in our common future. It is an investment whose yield will benefit all of us.

Iran of the future will be a country of diversity that affords the regions and nations new opportunities for self-development. This naturally includes above all to receive warmly various groups of common, ethnic, cultural and religious visitors to this country. Iran of the future will be a country of open borders. Open borders also imply that Iran of the future must not seal itself off by protectionist measures. No doubt free world movement of tourists generates prosperity.

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For tourism to reach its full potential in Iran, it needs a clear strategy and vision. That strategy and vision need to be part of a broader strategy and vision for developing Iran to its full potential.

Our vision for Iran in the twenty-first century is a country with a dynamic, competitive, and sustainably growing economy. The country must be based increasingly on knowledge, technology and skill. It must produce ever more sophisticated goods and services in the tourism industry. By creating more wealth, Iran must be able to raise its living standards across the board and offer more opportunity to its people. We must be capable of sustaining world class public services and infrastructure to incoming tourists.

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Tourism will be a major contributor to that vision for a new Iran. Through its growth, there can be more employment, more opportunities for business and regional growth, and of course more foreign exchange earnings. I believe that Tourism will further reinforce its central place in the service-oriented sector of Iranian economy in the 21st century.

For tourism to realize its full potential, there needs to be a development strategy to promote its sustainable growth. Right now, it is not hard to find a clear direction for tourism. Ever since the decision to fully privatize the tourism, government has on hand a strategic focus and an effective policy advice for the sector.

Meantime, there is still concern that the strategy it is about to unveil has not been the subject of close enough consultation with the tourism industry. The workshops like this may help towards that goal. For the future of the industry, it is essential now to work to bring the government's and the industry's thinking together to produce that national strategy for sustainable tourism which we are looking for.

Let’s just remind you that increasing the number of visitors to existing attractions in Iran is not sustainable in the long run. Already some of our main attractions are under pressure. That reduces the quality of the visitor experience and can also lead to the degradation of our environment.

The Iranian government will want to put a lot of energy into seeing that national strategy developed. There is no point in our national tourism agency, i.e., Iran Touring and Tourism Organization (ITTO) and the industry working at cross-purposes or in isolation from one another. Both are making substantial investments in promotion. That spending will be most effective if it is controlled to an agreed national strategy.

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ITTO must be interested therefore in exploring further with the tourism industry in Iran their ideas on how the ITTO's efforts might be made more effective through a partnership with the industry in an industry-led, market-driven approach.

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At this meeting, two speakers will hopefully provide us some information on how that approach worked in their or other countries. I am sure that more value can be added to our industry if we line up together the government and private sector contributions and strategies.

There is a need to go beyond government's present stated goals of a sustainable flow of tourism earnings, removing barriers for tourism, and removing barriers for the industry. While these goals are fine as far as they go, I believe we should be more explicit about the contribution tourism can make to our future. So let me outline some of the areas where I believe tourism's contribution to our national well-being can be extended.

In the first place, I believe that tourism has an even greater contribution to make to regional development in Iran than it has been able to make to date. Economic development in Iran is placing pressure on infrastructure in the major centers, but leaving infrastructure under-utilized and employment opportunities lost in regional Iran. A drive to boost tourism in Iran, in the sense we find in the Country’ five-year plan, therefore is key to regional renewal. ITTO’s plan therefore should involve establishing a new local fund to encourage the development of local economic initiatives. The fund will back research and development of local economic strategies, specific promotional activity for regions, and initiatives to secure new investment in regions. The amount available for regions will vary depending on its level of unemployment, its rate of economic growth or decline, and its rate of population growth or decline. That will enable ITTO to target support to areas with the greatest need for economic stimulation.

I have no doubt that tourism will emerge as an area of potential growth in many of Iran’s regions and that this new fund will be instrumental in facilitating its growth.

Equally, we see the growth of domestic tourism as an important source of import substitution. We benefit locally both by supporting our own industry, and by spending our money at home rather then seeing it flow out in the form of foreign exchange. The tourism industry's campaign to promote domestic tourism is a worthy initiative.

In recent year, and in present Government, ITTO understandably has focused on international tourism and promotion, although there appears to be nothing in its law, which prevents it supporting domestic promotion. That is not to say that the ITTO need do that marketing itself. I am interested to see that ITTO relies on feedback from the tourism industry in how public money for domestic marketing would be best allocated. But however the funds should be weighted towards those areas most in need of economic stimulus, providing that they have devised a viable promotion strategy.

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The growth of tourism is also a vital part of our overall strategy to boost sustainable business development and job growth. Small businesses are a major component of the tourism industry, and, as it expands, there is a capacity for many more. ITTO may rework a program of small business grants for start-ups and expansion that will be of assistance in the tourism sector.

In today Iran, unemployment has reached to a critical level. Tourism can and does create jobs and wealth. It can create jobs rapidly, at relatively low cost, in line with the flexibility associated with the development of human forces. It can create jobs for varied groups of people, including women and young people, who traditionally find getting jobs especially difficult. It can create jobs in less developed and peripheral regions, allowing them to exploit the limited opportunities available to them to make progress in economic terms. It is worth noticing that by the year 2006, some 2.5 million more jobs, on top of the present 18 million, will be generated by tourism only in the European Union.

What are more important locate in alternative or new forms of tourism that are generally perceived as having good potential for creating jobs. In particular rural tourism, environmental tourism, urban tourism, and cultural tourism as well as business tourism are these new forms. The training programs in tourism should be a great deal more focused in function of the different types of jobs on offer: For example, public and private jobs, permanent and seasonal jobs, full-time and part time jobs, managerial and subordinate jobs.

I think all of us in this room do also place huge emphasis on the importance of industry training and raising the skill levels of those in industry generally. Tourism is very much a people industry where the quality of the employees is critical for the success of the business. Training programs should also be based on the major ongoing and expected changes in the qualifications required for jobs. These changes concern in particular greater competitiveness as regards the quality and the rapidity of the services and separate labor requirements in tourism. I hope experiences such as those stored in companies like Horwath may be shared in a way that bring about a training culture to develop across Iranian tourism industry to boost our overall skills in line with international standards.

Developing a sustainable tourism strategy requires the production of quality research. Although the Iranian tourism industry is a strong defender of a better statistical information base for the industry, but in a developing country like Iran, they look for more support from government for that. Since other key economic sectors are provided with official statistics at public expense, tourism should also have its share of national funding. No doubt, it is in the public interest to produce accurate statistical information about tourism as a base for developing strategies for the industry. I hope ITTO’s commitment in this respect will encourage the industry in turn to increase private sector funding for research, and also encourage researchers in our universities to pursue more tourism-related research.

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A coalition of tourism industry interests is instrumental in driving the government to notice all shortcomings in this respect. Funding such core responsibilities has a far higher priority for the private sector than the continuos call for tax cuts and similar measures.

To materialize our desire, an effective partnership must develop between the ITTO and the industry in developing a national strategy for the sustainable growth of tourism. ITTO and the industry should be prepared to discuss with each other the structural changes which need to be made to achieve a proper approach to the promotion of Iranian tourism which would benefit the sector and the economy. Today’s gathering can also be regarded as a move in that direction, because we must accept that we need stronger policy advice on tourism and on how other policies impact on its development.

Thank you again for the opportunity to address this workshop. I trust that the materials provided by our Horwath colleagues and the afterward discussions which today we will have here, will contribute to the development of a national strategy for tourism in Iran. Thank you.