Despite the widespread use of sanctions as a foreign policy tool in the absence of armed intervention and as a means to promote peace, there is notable absence of research on the effects of sanctions on the peacebuilding capacity of tourism and their relationship to the Sustainable Development Goals (SDGs). This situation is surprising given that both sanctions and tourism are promoted as a force for peace and reconciliation processes. Drawing upon international relations and political science and via semi-structured interviews with key stakeholders in the Iranian tourism and hospitality industry, this study investigates whether sanctions contribute to peace and create an environment suitable for tourism development. The findings indicate how the imposition, relaxation and then re-imposition of sanctions by international state actors as a means of peace have paralyzed the Iranian tourism industry through its psychological, sectoral, and societal effects and mobility restrictions. The consequences of sanctions and their sharp contrast with the SDGs are also explored. This study fills a significant gap in tourism research by examining the implications of the application of a widely used coercive geopolitical tool of statecraft in relation to the peace and tourism nexus.