The Effect Of Economic Sanctions On Exchange Rate In Tourism; A Study The Airlines Selling And Travellers' Behaviour

Analysis of effects of economic sanctions on tourism is important in today’s competitive world. The current paper is up to examine the sanctions on exchange rate and its impact on tourism. According to economic experts, the sanctions have led to the financial crisis and inflation. The exchange rate is related to the economic conditions of the country. Reduction in the supply of currency causes exchange rate rises and the value of the local currency comes down. It indicates that, economic sanction is effective in determining travel behaviour. Currency rates are considered in costs of foreign travel and decrease and increase of the rate of exchange influencing price of airline tickets, hotels, and other services. Research findings show economic growth of countries and people’s incomes have an effect on tourism demand. Tourism is an industry which is determined by a range of factors, both external and internal. Economic situation have an influence on destination choice and travel purchases; this influence is on consumer’s decision-making process. Although people are still travelling to another country but the greatest impact of exchange rate is on international trips. As an assessment about the impact of economic sanction on tourism, the study was conducted on sales of Aseman airline and the number of travel agencies in Mashhad. This paper shows the real effective exchange rate of fare of domestic and international ticket in the short-term, due to economic sanctions. A key determinant of cost airline is the exchange rate. If the exchange rate goes up, the competitive pressure on the airline will increase. Since its costs rise and as a result, ticket prices increase. The result obtained shows that economic sanction and the exchange rate are associated with a selection of travel and transportation choices.