Tourism in Albania has been a key element in the country’s economic activity and growth, and is constantly evolving as international tourists explore its heritage, natural and cultural wonders. The country lies in the west of the Balkan Peninsula bordering Montenegro to the northwest, Kosovo to the northeast, North Macedonia to the east and Greece to the south. The Mediterranean Sea with the Adriatic and Ionian Sea make up the entire west border of the country. The country’s coastline is about 480 kilometres long composed of both sandy and rocky beaches, bays, caves and lagoons. The country features notable topographical diversity with landscapes ranging from the snow-capped Albanian Alps, Sharr, Skanderbeg, Korab, Pindus and Ceraunian Mountains, the lakes country around Podradec, fertile plains of Fier, to the sunny Adriatic and Ionian Sea coastal strip.
Albania covers an area of 28,750 square kilometres and has a population of around 2.94 million, 67 per cent of who live in urban areas. It is a unitary parliamentary constitutional republic where the President is elected as head of state and Prime Minister is the head of the government and hold the executive powers. The seat power is located in the country’s capital, Tirana that has a population of around 884,000. Tirana is the most important economic, financial, political and trade centre in Albania due to its location in the centre of the country and its air, maritime, rail and road transportation infrastructure.
lbania has been transformed from one of the poorest countries in Europe into an upper middle income country. The country is implementing important reforms to revitalise growth and job creation while advancing the integration agenda of the EU. Albania is richly endowed with underdeveloped natural resources such as oil and minerals, including chromite, which makes it a potentially attractive destination for foreign investors. The Patos-Marinza oilfield in Albania is the largest onshore oilfield in continental Europe. Agriculture, Industry and the services sectors account for 19.0, 20.9 and 47.3 per cent of GDP respectively.
Economic growth rose to 4.2 per cent in 2018 due to favourable hydrological conditions boosting energy production. On the expenditure side, household consumption and investment contributed to much of the growth. Economic growth is however expected to fall to 3.8 per cent in 2019 and level off at 3.6 per cent on average over the medium term. Growth will continue to be led by domestic demand followed by fixed capital formation growth. Net exports are also expected to support growth, albeit to a lesser extent as imports expand in line with domestic consumption (World bank).
Inward foreign direct investment (FDI) has increased significantly in recent years as the government has embarked on an ambitious program to improve the business climate through fiscal and legislative reforms. FDI in Albania increased to 981.6 million Euro in 2018 as compared to 899.9 million Euro in 2017 (Central Bank of Albania). The largest volume of FDI in the fourth quarter of 80.2 million Euro originated in Switzerland, followed by France with 43.7 million Euro.
Economic Indicators – 2018
Foreign Direct Investment (FDI) in Albania
The Albanian Investment Development Agency (AIDA) is the official investment and export promotion agency of Albania. Its main mission is to attract foreign investments and provide support and after-care services to investors that decide to invest in the country. AIDA is directed by a Management Board chaired by the Prime Minister, and whose members are, among others, five cabinet ministers representing the most important sectors of the Albanian economy.
The government of Albania offer a number of benefits to investors including:
- The government of Albania has ratified the “Investment Charter”, a Stability Pact initiative reforming the legal environment to facilitate FDI in Southeast Europe. It will adopt a unified investment law that will replace existing rules governing investment, including the current Law on Foreign Investment (1993) and the Law on Strategic Investments (2015);
- The new law will amongst other things, guarantee that the government of Albania will not expropriate foreign and domestic investment in the future unless under circumstances where it is an action of last resort and in line with the principles of international law;
- The new law will ensure adherence to labour, safety and environmental standards and regulations contained in Albania’s domestic law and in relevant international treaties to which Albania is a party;
- A package of tax incentives has been approved for strategic investments mainly in the tourism sector. Under the new package, as of January 1, 2018, newly built four and five-star hotels will benefit from 10-year tax exemptions, and they will not be required to pay infrastructure taxes. VAT in the tourism sector will also drop, from the current level of 20 per cent down to six per cent;
- Corporate income tax rate is a flat 10 per cent;
- Streamlined business procedures that enable a company to be registered or get all the permits needed in one day at the cost of one Euro;
- A young, educated, cost-competitive work force; and
- Albania’s strategic position at the gates of the more than 65 million consumers of Southeast Europe.
Tourism in Albania
Albania is characterized by its rich archaeological and cultural heritage dating back to the classical period when Illyrians and Ancient Greeks inhabited the region. Over the course of history, the territory of Albania was occupied and populated by Romans, Byzantines, Venetians and Ottomans. Notably the country features unspoilt beaches, mountainous landscapes, a traditional cuisine, archaeological artefacts, unique traditions and the wild ambience of the countryside.
The broad palette of Albania’s tourism offering is the foundation of the Government’s National Strategy for Sustainable Development of Tourism 2018-2022. While ‘sun and sand’ tourism continues to be the dominant drawcard for international and domestic tourists, its market share is giving way to increasingly popular participative and experiential activities. Albania is well placed to cater for this evolving market with its own brand of cultural, adventure and ecotourism.
The interest in discovering Albania’s tourism attractions drew almost 6 million international tourists to the country in 2018 representing a year on year increase of 16 per cent and contributing 3.83 billion Euros to the economy. Around 76 per cent of these visitors stayed in hotel accommodation for an average of 4.3 nights. Global hotel brands already established in Albania include – Hilton Garden Inn; Best Western in Tirana; and Melia Hotels International in Durres.
Tirana, the country’s capital city is known for its cultural heritage, religious diversity, the colourful buildings, Italian and Socialist architecture, and natural attractions such as Dajti Mt and parks around artificially created lakes. Tirana is also widely known for its stylish restaurant scene and the traditional agrotourism areas in the southern and eastern outskirts of the city. The city organizes many festivals, sports competitions and live music performances.
The most prominent feature of Albania’s topography is possibly its numerous successive mountain ranges with an average altitude of more than 700 metres. Much of the mountains including the Albanian Alps lie to the north, east and south of the western lowlands. The Korab Mountains dominate the east of the country and expand 40 kilometres along the eastern border of the country, where peaks can reach 2,500 metres. The mountainous landscapes with glacial lakes and caves are traversed by river valleys with crystal waters, gorges and mountain saddles and have a rich biodiversity attracting both domestic and foreign tourists to enjoy ecotourism pursuits including trekking, mountaineering, biking, snow skiing and snowshoeing, kayaking and fishing. There’s also hydrospeed experience in the wilderness of the River Vjosa.
Albania has a Marine Park and 14 National Parks covering around 6.7 per cent of the country. Butrint is both a National Park and the site of one of Albania’s three UNESCO World Heritage Sites with the well-preserved ancient city walls, a baptistery, a great basilica, theatre and castles. Gjirokastër is listed with Berat as a UNESCO World Heritage Site. The city is described as a rare example of a well-preserved Ottoman town, built by farmers of large estates. Typical houses consist of a tall stone block structures which can be up to five stories high.
Albania’s southern coastline, with its lovely traditional hamlets, cobblestoned streets and small Orthodox churches, has plenty of beautiful beaches lapped by pristine waters, rivalling nearby Greece for half the price. There are too many to mention but Dhermi, near Drymades is one of the most famous places in Albania, a strip of white rock lapped by turquoise waters. The beach is one of the longest and, in the summer, most crowded in the Riviera. Meandering inland from the coastal bays, there are natural springs and spas in many locations to cater for health and well-being tourism.
Business tourism is evolving with convention centres and expo facilities as stand alone complexes and also integrated with major hotels. MICE delegates can also join up with the growing number of gastronomy tourists on guided tours that explore the Albanian countryside seeking out authentic regional cuisine and wines.
International Tourist Arrivals and Overnight Stays over past 5 YearsNotes:
- Source – Albania Institute of Statistics INSTAT
- Albania does not publish Domestic Tourism statistics
- Transiting Arrivals have been excluded