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Despite the growing body of research on social tourism practices, significant gaps remain about such initiatives in developing countries. The tourism products offered in social tourism are varied and are aligned with national contexts. Using school-stay as seasonal and low-priced tourist accommodation has long been a unique government-sponsored social tourism scheme in Iran to trigger travelling among disadvantaged and low-income individuals. Against this backdrop, this study sought to critically examine the effects of this long-running policy on the Iranian tourism industry and more particularly on the hospitality sector. Drawing on the documentary research and in-depth interviews with key informants, findings revealed that while such an initiative facilitates travelling among unprivileged and low-income individuals, improves travel spatial distribution, and manages over-crowdedness in peak seasons, it discourages investments in the hospitality sector, negatively affects local economic development and provides inadequate and low-quality hospitality services. Overall, the findings of this study contribute to the literature on social tourism practices in developing countries. It also highlights the implications of public sector intervention in the management and promotion of social tourism as an economic driver for domestic tourism and the hospitality industry. [ABSTRACT FROM AUTHOR]