Hard times weigh heavily on Iranians on New Year's holiday

DUBAI (Reuters) - These should be prosperous days for Ali Pasha, who owns a tourism company in Dubai that arranges holidays for those seeking a break in the sunny Gulf emirate.

The Iranian New Year on Wednesday, called Nowruz, is typically a time when tens of thousands of Iranians, Pasha's main customers, cross the Gulf to enjoy the city's glitzy hotels, luxury shopping and many beaches.

But the number of Iranian tourists heading for Dubai's shores has slowed significantly this year, and in between answering phone calls and smoking a cigarette in his office on a recent afternoon, Pasha sounded exasperated.

"For Dubai, Iranian tourists used to be very important," he said. "Now they have lost their importance."

He and other local travel agents estimate they have seen a 40 percent drop in the number of Iranian customers compared to last year.

Iranians' purchasing power has decreased following a halving of the value of the rial against the dollar, due largely to several rounds of U.S. and European sanctions over Iran's nuclear program. Some Iranians say they can no longer afford foreign plane tickets, hotel stays and visa fees as a result.

Iran's most important holiday, Nowruz is rooted in ancient Zoroastrian culture and marked by large family gatherings, gifts for children, vacations and spring cleaning (called "house shaking" in Persian).

But Nowruz this year caps 12 months of high inflation and unemployment and comes with no sign of an end to Western sanctions on Iran's energy and banking sectors that have halved the country's oil exports and made it difficult to conduct trade, even in items not banned by the West.

The sanctions are meant to force Iran's leadership to reconsider its disputed nuclear program, which the United States and some allies suspect may be aimed at developing a nuclear weapons capability, something Iran denies.

But the most immediate effect of the measures has been a decline in the living standard of millions of Iranians, and that is being felt keenly at this time of year.

"Stress is the best word for how people are feeling these days," Mehrdad, a music instructor in Tehran, told Reuters via Facebook messaging.

In interviews by telephone and via email, Iranians said they were cutting back sharply on expenses to mark the holiday season - from buying new clothes to providing lavish spreads of nuts and fruit for gatherings of family and friends.

Mehrdad estimated he used to earn nearly $20 an hour giving music lessons last year. Due to the weak rial - now at around 34,000 to the dollar compared to about 17,000 last year - he now earns the equivalent of six to eight dollars an hour, he said. Financial constraints mean he now has fewer customers, too.

"Clothing prices are very high, and the same shoes you could have bought last year for 1.5 million rials, this year are priced at 3 million rials," Mehrdad said.

Some members of Iran's middle class are adjusting to their new reality by staying home for Nowruz, when government offices and businesses shut their doors for a week or more, instead of taking trips abroad.

The number of Iranians staying in Dubai's hotels in 2012 dropped about 32 percent compared to 2011, to about 323,000, in a year that saw a 9.3 percent increase in the overall number of tourists visiting the emirate, according to figures from Dubai's tourism department.

"The option of traveling abroad is off the table with these (foreign currency) rates," said Sara, 31, who works for a computer company in Tehran. She, her husband and their friends used to travel together to Turkey and Malaysia for Nowruz in years past, but had to give that up this year.

"We are at least lucky that Iran is big and beautiful and we can still find a nice place to enjoy our holidays," Sara said.

EMPTY TABLES

The hardships have dampened the mood on what is supposed to be the most festive holiday of the year.

"Not too long ago, the rush of people's Nowruz shopping during the last few days of the year would spread fresh excitement and mirth in society," the moderate Mardomsalari newspaper wrote in a March 11 editorial.

"But these days when people's tables are empty of bread ... one cannot sense the coming of Nowruz in end-of-the-year shopping. You can tell this by the sad looks on the faces of fathers and mothers," read the editorial on its website.

Politics have also played a role in Nowruz this year.

Authorities are wary of any public gatherings that might spark demonstrations ahead of presidential elections in June, and police have warned they will break up any gatherings that pose a threat to public safety.

Mardomsalari's editorial urged authorities not to crack down on celebrations of Chaharshanbe Soori, an occasion coinciding with Nowruz when many Iranians light fireworks outside and jump over small fires, a Zoroastrian rite meant to signify the triumph of light over darkness.

Some Iranians have also taken to social media, text messaging and paper fliers to call for a boycott of pistachios, traditionally served to guests at Nowruz, to show solidarity with those who can't afford the treat.

Their price has doubled in rial terms in recent months, merchants say, and some Iranians accuse suppliers of raising prices unnecessarily ahead of the holidays.

"This year most people have decided to go without nuts in protest to show unity," Mehrdad said.

"For our family it's not such a difficult thing to buy nuts, but just a few streets over there are many people who can't even buy clothes or meat, much less nuts."

The government has tried to order suppliers to provide the domestic market with enough pistachios to ensure lower prices. It has also made cash payments to Iranian households as a Nowruz gift, and promised to distribute apples, oranges, beef and chicken at cheaper prices ahead of the holiday.

But some say it is the government that is to blame for the price hikes because subsidized dollars that should have gone to food imports have instead been co-opted by well-connected individuals who used the hard currency to import luxury items instead.

"Some wealthy people are importing expensive cars with cheap dollars and ordinary people can't afford pistachios," said 48-year-old Shahrokh, who works in a taxi agency.

"I never had to think about whether I could afford pistachios or nuts for Nowruz before. It was just something we always had for the new year. This year, there is only so much one can buy," Shahrokh said.

"Nowruz isn't the same anymore."

(Additional reporting by Zahra Hosseinian in Zurich; Editing by Sonya Hepinstall)