Even as Iran opens up, travellers face credit card blocks

Iran’s hospitality industry is opening up but visiting business travellers face payment challenges ahead of the expected lifting of sanctions next year.

Next month two hotels will open next to Imam Khomeini International Airport – the ibis IKIA and Novotel IKIA, the first international brands to re-enter the market since the 1979 Revolution – but neither will accept credit cards.

That means guests must pay in Iranian rials, US dollars or euros (a currency exchange is by reception). Most travellers will opt for the international ones, given the complications exchanging into rials ($1 is worth 29,603 rials).

A Visa Middle East spokeswoman said a payments network is an essential component for a globally integrated and growing economy.

“We understand that as of now, nothing has changed and much will still need to occur before Visa will be able to consider doing anything,” she said. “We are keeping a close eye on the evolving situation.”

Chairman and chief executive of Accor Hotels Sébastien Bazin foresees a rise in mobile payment solutions, which have flourished in Africa. “Technology permits today to do things differently to what we’re accustomed to,” he said.

An Accor executive acknowledged it is an “issue” and other global hotel brands will be keen to see it resolved before committing to the market.

Iran is keen to develop its travel industry in line with the $30bn influx of foreign direct investment projected in the post-sanctions era.

Iranian Vice-President and president of Cultural Heritage, Handicrafts and Tourism Organisation M. Soltanifar said it needs 10,000 beds and only 20 per cent of its hotels are currently in the four- and five-star sectors.

“Tehran could have two or three Sofitels,” said Bazin. “But there’s a lot of demand in the economic mid-scale, which is why ibis has a long way to go here.”