Arab tourists flock to Iran (page 2 of 2)

"The government's focus has been on oil, not tourism," said Pourfaraj. "Just compare Iran with Turkey, which has no oil. It's taken time for the government to realise that if we expand the industry, jobs will be created across the age ranges and from drivers up to managers."

Cash only

Banking is a practical problem. While some carpet dealers in Esfahan now display Visa and MasterCard signs, even the most upmarket hotels insist on cash. Schemes for tourists to acquire temporary debit cards on arrival at the airport have had limited success.

"This is still the main problem," says Pourfaraj. "People see a carpet or some jewellery they want to buy at $3,000-4,000, but they have at most $1,000 in cash."

Visitors who want to come to Iran are not deterred, say industry professionals, by Iran's ban on alcoholic drinks nor by the legal requirement for women to wear a hijab, introduced after the revolution. But those who - after a week or more in Iran's historical sites - are tempted by a few days at the seaside, notes Pourfaraj, are sometimes surprised to find beaches segregated between men and women.

Kish Island

The development of Kish Island as a special zone has proved a testing ground. Rezidor SAS became the first international hotel company to operate in Iran since the Revolution by agreeing to manage the 168-room Dariush Grand Hotel on the island.

But the prevalent mood among Iran's political elite remains one of self-reliance and keeping foreign investors at arm's length. Parliament, which has a strongly conservative majority, voted in September to curtail the state's ability to sign contracts with foreign companies, and deputies criticised agreements with Turkish firms to open a second cellular phone network and to operate Tehran's new international airport, which remains closed since Revolutionary Guards moved tanks onto the runway in May.

"We have to concentrate on what we do and hope the government eases up," says one tour operator.