The possible lifting of international sanctions on Iran’s key energy and financial sectors has already shifted the attention of global business leaders to the largest closed market on the verge of opening. As Sir Martin Sorrell, CEO of media giant WPP Group mentioned recently;
“Apart from Mars and Moon there are not many untapped opportunities left on that scale”
Since 2014, business interest from around world in various sectors of Iran has been growing exponentially, and driven by visitations of business executives preparing to do business in Iran.
Above and beyond the expected tourism growth in a full of range of segmentation – such as cultural, religious, medical, eco-tourism and adventure – business tourism alone carries a heavy deal of consideration in the aftermath of sanction removals. Iran and specifically Tehran the capital, is home to not more than a few locally branded hotels that would to some extent meet the global hospitality standards. This is while Turkey as an immediate neighboring country houses more than 20 internationally and 5 star branded hotels. The lack of internationally branded accommodation and quality business hotels is indeed an immediate market gap and a critical shortcoming in the next coming years and beyond.
The construction sector with an annual turnover of US$38.4 billion is an important and booming sector in Iran accounting for 12% of existing jobs. The industry being divided into “government infrastructure projects” and “the housing industry” is driven both by the public and private sectors. The housing sector has a pivotal role in the national economy, witnessing an annual growth of 24% over the past 23 years and accounting for about 30% of Iran’s GDP. In recent years and under the toughest sanctions, real estate remained as a lucrative business in Iran, while being driven largely by the private sector contributing to almost 60% of investments. In 2015, the New York Times wrote:
“Iran may be wrestling with economic sanctions, but one indicator is going through the roof: Developers have broken ground on a record 400 shopping malls across the country, 65 in Tehran alone.”
Iran will soon witness an explosive business boom driven by executives hoping to either return or to start their business in the aftermath of the nation’s return to the global trade map. Hence, investments in both management and development of upscale business hotels in Iran will remain an un-tapped market gap subjected to an exponentially growing demand in the years to come.