The ratio of inflation and the share of Iranian households' tourism spending
This chart shows that there is an inverse relationship between inflation and tourism's share of Iranian household spending, and the higher inflation has gone, the smaller tourism's share of the household basket has become.
For example, in 1398 (2019/20) and before the COVID-19 pandemic, with a sharp jump in the inflation rate relative to the previous year, families' tourism spending fell by more than 50 percent. Even after COVID-19 restrictions ended, this trend did not improve and travel's share has remained low. Two reasons can therefore be cited:
Income effect: Rising inflation reduces households' real purchasing power. As a result, families, to meet essential needs such as food and housing, are forced to cut nonessential spending such as travel.
Substitution effect: Rising travel costs (transport, lodging, and so on) make tourism an expensive option, and families instead choose lower-cost intra-city recreation.
The message for policymakers is clear:
- The collapse of tourism is a sign of a decline in middle-class welfare.
- Demand in the tourism industry has been severely weakened
Therefore both the public and business owners in this field need special support and attention.
See the original infographic (Persian)
Machine-translated from Persian by Namafar; the Persian original is authoritative. Read the original in Persian