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Worldwide growth in both the Muslim middle class and younger generation has resulted in Islamic tourism becoming a significant global market segment, and a key growth sector for the economies of Islamic countries. The 121 million Muslim tourists of 2016 were expected to be 156 million in 2020, whereas the total spendings of US $220 billion of Muslim tourists will reach in 2026, $300 billion. This chapter focuses on Iran as one of the important Muslim-friendly destinations. With Islamic principles already in place, Iran is aiming to become a world hub for Islamic or halal tourism, while meeting new challenges and pursuing creative alternatives.

Tourism in Iran and Iranian tourism policies are more a consequence of the country’s political economy than from explicit planning. The emphasis on adhering to domestic social norms, and the obligation on inbound tourism to obey these rules, have had no other result than a reduction of its markets. Iran’s present share of tourism is as low as 1/800th of the glocalized tourism industry. This chapter discusses the main factors influencing tourism development in Iran, particularly the political economy and oil.