Albania improves its appeal for foreign investments in tourism

As it happened to other Countries of the Balkan Peninsula, 2017 was a record year for Albania, which, according to Instat (the Albanian Institute of Statistics), welcomed more than 5 million of international tourists. The main tourism flows are from Kosovo (41%), Macedonia (12%), Montenegro (6%), Italy (6%) and Greece (9%), representing together 76% of the total foreign arrivals. As reported to Twissen by Blerina Korreshi, Director of Fondacioni Europa of Tirana, the Albania Draft Strategy of Tourism 2013-2020 considers tourism as an important sector for the economy and as a strategic priority to be develop through infrastructure investments and improvement of services.

The World Economic Forum, in its Travel & Tourism Competitiveness Report 2017, ranks Albania 98th out of 136 analysed Countries for tourism competitiveness. Improvements of the performances of the destination are the quality of air transport infrastructure (68th), the environmental treaty ratification (20th) and the Government prioritisation of the Travel & Tourism industry (61st). On the other hand, weakest points are the price competitiveness (82nd), the international openness (107th) and the quality of tourism infrastructure (93rd).

According to the World Travel & Tourism Council’s Travel & Tourism Economic Impact 2017, in 2016 the direct contribution of the Travel & Tourism industry to the Country’s GDP was about 800mn euros (ALL 127.7bn), namely 8,4% of total GDP. Moreover, the total contribution (which also includes the indirect and induced ones) was about 2.6bn euros (ALL 393.0bn), representing 26% of total GDP. The Report underlines that Albania’s tourism offer is characterised by the leisure segment. In fact, in 2016 the tourism expense (both by domestic and international tourists) represented 70,1% of the direct contribution to the Travel & Tourism industry GDP.

Although nowadays Albania is well-know for its sea & sun offer, new typologies of tourism are emerging. As reported by the Tirana Times, last year the Adventure Travel Trade Association (ATTA) placed Albania as one of the three destinations added to the top adventure travel destinations along with Cuba and Portugal. In fact, its geographical conformation allows mountain hiking and rafting along canyons, and many local tour operators are specialising by offering targeted packages including also biking and horse riding. The creation of focused products also represents a chance for cooperation. The Via Dinarica mountain hiking trail, for example, crosses seven Balkans countries, and can increase competitiveness offering joint package holidays. It is also reported that the trek which stitches together ancient trading and military routes traversing the Dinaric Alps was rated by the National Geographic as one of the best 2017 trips.

Korreshi also reports Albania should encourage visitors to discover the many aspects of its culture and nature. In order to benefit from the use of tourism resources, taking into account the needs of the main target markets, the development of Albanian tourism will be focused on four main products, namely cultural tourism and heritage-oriented tourism, natural tourism (which includes national parks and protected areas, wildlife, trekking and hiking), rural tourism and coastal tourism.

As reported by XinhuaNet, Chinese online newspaper, the Albanian Government is planning to attract foreign investments (which have already passed 800mn euros in 2017), in particular by Italian investors, offering a favourable business climate with low taxes and less red tape. In particular, during the recent Albania-Italy Business Forum held in Tirana, Albania’s Prime Minister invited Italian companies to invest in tourism sector, which is considered a priority sector for the economy of the Country.

According to the Tourism Strategy, regarding support and investments in tourism, “the central Government seeks to foster private initiative, – Korreshi reports – especially in areas of national importance for tourism. State aid for these programs may be provided in the form of grants, loans or fiscal facilities or as a combination. For investments in the field of tourist enterprises, worth 50-100 million euros, the Council of Ministers, after making the assessments and the relevant verifications, can offer real estate leasing for a symbolic fee of 1 euro. While for tourism investments worth over 100mn euros, the Government, in addition to the possibility of applying a symbolic fee of 1 euro, also applies the extension of the contract period up to 99 years”.

At Twissen we record that tourism is considered as one of the key sector for Albania’s economy. New segments are being analysed and developed by the local stakeholders, while there is room for business in projecting new tourism products. In fact, the Government is aiming to attract foreign players in this industry, offering a favourable environment for investment and businesses, such as a taxation at 6% for tourism ventures.