As Western sanctions are gradually lifted and Iran is reintroduced to the global business community, what are the implications for travel management?
OVER RECENT YEARS, BAD NEWS HAS TENDED TO DOMINATE HEADLINES ABOUT THE MIDDLE EAST. If anything, the widespread perception is that it’s never been a more dangerous time to visit. The war in Syria, the spread of the so-called Islamic State, the mass exodus of refugees towards Europe, chaos in Iraq and the threat of a third Palestinian intifada (at the time of writing) combine to paint a pretty awful picture.
How odd, therefore, that during one of the most violent years on record, something positive has been achieved, in the most unlikely of places: in Vienna, on July 14, a landmark agreement was reached between Iran and the West. After lengthy talks, it was decided that Western-imposed sanctions would be gradually lifted in exchange for access to Iran’s nuclear programme.
Israel, and many on the far right of the political spectrum, ridiculed the accord, claiming the deal would do nothing to curb Iran’s pursuit of a nuclear weapon. On the other hand, progressive elements of the international business community are salivating at the potential opportunities. Last month, Iran’s moderate vice-president, Masoud Soltanifar, told the Associated Press that his country was bracing itself for a “tsunami” of tourists. It is, statistically, a country on the up.
Prior to the Vienna agreement the number of foreigners visiting Iran grew by 12 per cent in each of the previous two years. In 2014, it welcomed more than 5 million tourists, boosting the economy to the tune of £4.5 billion. The target, according to Soltanifar, is 20 million tourists annually by 2025, and an inbound tourist industry worth £20 billion.
Open for business
With leisure and business travellers expected to arrive en masse, that may be something of a conservative estimate. “In the last six months we have had more inquiries [from Western companies] about Iran than we had in the whole of previous year,” says Edouard Maze-Sencier de Brouville, regional security operations manager for International SOS (ISOS) and Control Risks.
The fact is, Iran is open for business. It is a huge marketplace with acute demand for a range of products and services. Its young, educated and growing middle class longs to pursue relations with the West and a path towards economic growth. It was slightly surprising, therefore, that travel buyers and travel management companies (TMCs) in some sectors were so coy when asked about prospects for growth in Iran. Not one person from either community would speak on the record about company strategy. Some said they were reticent to tip off competitors. That’s understandable. Others claimed to be weighing up the reputational consequences of doing business in Iran.
However, there was a consensus: buyers and suppliers need to read up on Iran to remain internationally relevant. A director from one TMC with significant business in the global energy sectors said that, since July, an overwhelming number requests to evaluate logistics and potential duty-of-care issues associated with travel to Iran had been received. “Most are surprised because it is nowhere near as complex as they expect,” she says.
And this is the key point: Iran has spent so long in the international wilderness that most people really have no idea what it’s like on the ground. Ayatollah Khomeini’s return from exile in 1979 and the start of the Islamic Revolution triggered more than three decades of isolation, during which time the country warred with Iraq, endured a series of natural disasters, and was subjected to punishing sanctions.
The fierce anti-Iranian rhetoric espoused by successive US administrations and British prime ministers did nothing to enlighten global perceptions of the Persian state. Alongside North Korea and Iraq, Iran was the third member of the so-called ‘axis of evil’. One of the many consequences of its long-term seclusion is that many remain uninformed about the country’s culture and aspirations.
Rosi Kern, a security and political risk consultant for Phoenix Acumen, is a regular visitor to Iran. She provides clients with geopolitical risk assessments, market intelligence studies and cultural training. “Iran is anything but a dangerous country,” she says. “I’ve had people ask about armoured vehicles and close VIP protection; it makes me laugh as much as it makes the Iranians laugh. Iran is presented [in the Western media] as an evil regime, but it’s nothing like that. Like anywhere, there are certain local laws and customs that must be observed. Arms and knees must be covered. Headscarves must be worn. But it’s nothing like Saudi Arabia or Afghanistan.”
ISOS’s Maze-Sencier de Brouville is often asked about security implications for females visiting the country. Like Kern, he says it is important to follow basic rules. “There are no specific security concerns surrounding female travellers. It’s more to do with cultural sensitivity: you have to comply with Islamic dress code, but one would not be expected to wear a hijab or an abaya [a covering overgarment].
But covering the head and knees is obligatory,” he says. Local etiquette also includes women not offering to shake a man’s hand unless he offers first, and women sitting in the back of vehicles, particularly when travelling with male passengers.
ALCOHOL ISSUES
Another key travel manager concern surrounds the availability and cultural attitude towards alcohol. A senior procurement director from a major financial institution says he actively discourages staff from consuming alcohol while on business in Islamic countries. He recounts a tale from earlier in his career when an employee was detained by police for allegedly being drunk in public.
Kern tells us that in Iran, alcohol is officially forbidden unless you’re a Christian or Armenian; but that does not mean a drink is not available. “You can’t walk about with a bottle of beer in your hand, but people bypass the rules in various ways. It’s about good public behaviour.” Furthermore, all Western visitors are advised to err on the side of caution with political conversations, particularly on the topic of US foreign policy. Kern says Iranians can differentiate between ordinary Americans and the actions of the government, but that a very small amount of anti-American sentiment remains in some quarters. “Overall, Iranians are desperate to impress visitors. The future of the country relies on it,” says Kern.
So how do travel managers make sure travellers are ready to do business in Iran? It’s all about education and preparation, according to Maze-Sencier de Brouville. He tells clients that Iran, and particularly the capital Tehran, is very much a low-risk travel environment. It is, of course, worth pointing out that the Iranian border with Turkey, Kurdistan and Afghanistan is basically a no-go zone for business travellers. That said, there is no commercial reason, at present, for anyone to visit the north of the country. Risk mitigation, therefore, falls into the same mundane categories as other cities. Instances of petty crime in tourist locations and road traffic accidents in major cities are among the biggest challenges.
The main urban centres are extremely busy, and traffic moves very slowly. Hussein Abdallah is regional coordinating security information manager for security specialists ISOS and Control Risks. “You have to leave more than enough time if you are to arrive promptly for a meeting,” he says. “Best practice is to book a car with an English-speaking driver through a sourced hotel property. This will make your traveller feel much more relaxed and secure.”
The English-speaking driver is, by all accounts, a valuable commodity as language and communication can be difficult with older generations of Iranians. “People over a certain age will not speak English,” says Abdallah. “Getting a taxi can be problematic if you don’t speak Farsi or are not accompanied by a Farsi speaker. And though it may change in the future, Western credit cards and bank cards are still not accepted. Business travellers have to carry cash [the local currency is the rial], which in itself can create a security issue. These are relatively minor things that can be mitigated with good preparation, but failure to do so could have a major impact on a trip.”
Fit for purpose?
Iran’s pariah status over recent decades has left its accommodation and aviation sectors in tatters. Vice-president Soltanifar recently said the country, which has more than a dozen domestic airlines, needs more than 400 new passenger planes to meet basic demand. He also revealed that 100 of the 250 passenger planes in the country are grounded because there are no spare parts. The other 150 are in dire need of overhaul.
The safety records of airlines in Iran rank among the worst in the world. Recent air accidents have cost the lives of hundreds of its citizens. In October, a passenger aircraft landed safely after part of an engine fell off mid-flight. There were 426 sighs of relief onboard when the plane stopped on the tarmac.
At present the country’s flag carrier and sole international airline, Iran Air, flies an Airbus 300 non-stop three times a week (Tuesday, Thursday and Sundays) from Heathrow to Tehran. It is, however, extremely difficult, for now, to make a reservation. The website, for example, is frequently down. Buying Business Travel tried on six occasions to make a booking through the reservations centre, but was each time told that an agent would have to call back. The phone never rang once. British Airways says it has no plans to introduce a London-Tehran service, although this is likely to be more to do with limited capacity at Heathrow. Turkish Airlines, Emirates and others fly to the Iranian capital via their domestic hubs.
Similarly, the accommodation sector is not fit for purpose. Accor is the only Western brand with presence in the country. In October, an Iranian company signed a deal with the French hotel conglomerate to use the Novotel and Ibis brands for the next 15 years. It was the first contract of its kind for more than 30 years. Other major chains are expected to enter the marketplace as the sanctions ease; meanwhile, the government has set up a fund to provide low-interest loans to private investors building new hotels. According to statistics, Iran has 1,100 hotels and guesthouses, of which 130 are four- or five-star properties. The government target is to reach 400 high-end properties over the next ten years.
Iran is taking its first steps on a long journey towards reintegration with the international community. It won’t be simple. It won’t be easy. The Middle East is nothing if not unpredictable. Nevertheless, the opportunities for companies to expand into this new and potentially lucrative marketplace means there will be an inevitable rush towards Persia. The challenge for travel buyers and managers is to facilitate that growth in the most secure and cost-effective way possible.