Iran offers hotel tax breaks in bid to boost tourism

Iran offered up to 13 years of tax holidays to hoteliers at an international tourism summit on Sunday as it seeks to boost visitor numbers and revamp its dilapidated hotels.

"All economic activities related to... tourism will enjoy 100 percent tax holidays between five to 13 years depending on the region," deputy economy minister Mohammad Khazaei told hoteliers from 18 countries who had gathered in Tehran, many from Europe.

Since the lifting of international sanctions under last year's nuclear deal, the moderate government of President Hassan Rouhani has made tourism a top priority for rebuilding Iran's struggling economy.

Visitor numbers have already boomed in recent years thanks to a partial thaw in the country's relations with the world, rising from 2.2 million annually in 2009 to 5.2 million in 2015.

By 2025, they are hoping to reach 20 million visitors a year.

The government hopes to see 300 new hotels over the next five years as it seeks radical improvements to its low-quality tourist accommodation.

It is hoped a rejuvenated tourism sector can create some 140,000 new jobs, with around half coming from Iran's handicrafts sector, said the minister for roads and urban development, Abbas Akhoundi.

Projects to build some 170 four- and five-star hotels are already under way, he added.

"We are working actively on 10 to 15 projects in Iran," Christophe Landais, chief operating officer for France's Accor Hotels in Iran, told AFP.

Accor was the first international company to open hotels after the historic nuclear deal -- an Ibis and Novotel outside Tehran's Imam Khomeini airport last September.

Landais said the group also hopes to tap the huge religious tourism market of Iran's second city, Mashhad, which hosts the mausoleum of a key figure in Shiite history, the Eighth Imam.

"Mashhad is the destination for pilgrims. Actually Mashhad receives more pilgrims than Mecca in Saudi Arabia -- about 25 million," he said.

A hotel operator from the United Arab Emirates said he was also about to sign a contract in Mashhad.

"We've been invited by many, many investors, many developers" to join in partnerships there, Imad Elias, chief of the Dubai-based Roda Hotels and Resorts, told AFP.

"We had Iran as a potential spot for expansion even before the lifting of sanctions. Iran is a gold mine, a jewel that needs to be explored," he added.

Akhoundi said the government had also finalised plans for $10 billion worth of rail projects to help improve the country's connectivity.

Tourism made up 7.6 percent of Iran's GDP in 2015, "which we hope to increase to about nine percent in 2016", he added.