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The opportunity of tourism and the risk of "Golemization" along the entire coast

2025-05-03 08:25:00, Ekonomi CNA

The opportunity of tourism and the risk of "Golemization" along the

Tourism is Albania's great opportunity. After 2016, the coup in Turkey and political crises in Egypt and Morocco led foreign agencies to "discover" the land of eagles with its diverse natural beauty and cultural and historical heritage.

The real boom came after the pandemic, with foreign national arrivals exceeding 10 million for the first time in 2023 and 11.7 million in 2024.

Tourism completely changed the image of Albania, which was now labeled in foreign media as the "Maldives of Europe", with low costs. Pre-purchases by foreign agencies encouraged hotel investments that began to implement the all-inclusive model.

At the end of 2023, “Accommodation and food services” reached 3.6% of GDP, with a rapid increase from 2016, when the indicator was 1.54%.

Foreign travel revenues in 2024 reached a record of 5 billion euros, according to the Bank of Albania, with a balance (excluding Albanians' spending abroad) that remains positive at 2.3 billion euros.

Driven by interest in tourism, investments have expanded rapidly in recent years, but for the most part are in tourist villages, which bring quick returns for investors but less added value for the economy.

In the latest tourism strategy, the government acknowledges that currently, large-scale investment projects are basing their financial feasibility mainly on real estate/residence sales, or on their own capital, as commercial financing conditions at this stage do not provide a suitable source of financing for such projects, both in terms of repayment periods and interest rates.

As a result, smaller-scale tourism development projects have limited financing options, while large-scale projects are mostly focused on the residential component, meaning that the development perspective is oriented towards the massive construction of real estate properties as “resorts” rather than the professional development of mixed-use tourist resorts.

The still cheaper prices compared to the region are attracting foreigners to purchase real estate.

In the last three years (2022-2024), foreigners have purchased nearly 1 billion euros of real estate in the country, according to official data from the Bank of Albania.

Tourism has also boosted the daily rental business. Data from AirDNA, the analytical unit of the Airbnb rental platform, made available to "Monitor", shows that in 2024, a total of 85 million euros were generated from rentals in Albania, a record level ever recorded in the country.

Compared to the previous year, revenues have increased by 85%.

In December 2024, 21.3 thousand residential units were rented through Airbnb, with the record set in September 2024, with almost 24 thousand. This number represents almost 3% of the total residential units in the country (about 1.08 million) according to INSTAT, or 5.5% of apartments in buildings (432 thousand).

The average daily price in Albania for a rental residential unit ranges from 43 euros in February to 81 euros in August, including cleaning, but excluding other service costs.

The rapid expansion of tourism also carries its own risks. The infrastructure is not keeping up with this pace, creating traffic delays.

Prices are rising rapidly, hurting both locals, especially for long-term rentals, and tourists, who were drawn to Albania for its cheap cost.

The biggest risk is that the country is losing the advantage of its natural beauty, with the coast, especially the southern one, being rapidly concreted. Foreign media have begun to highlight this trend.

The British newspaper "Telegraph" recently wrote that Albania could be on the verge of a nightmare from tourist overload.

“The Maldives of Europe,” “Beaches like those in Thailand.” I had read many such phrases about Ksamil – a small coastal town in southern Albania – before I went there.

Expecting to find an authentic Albanian village by the sea, I was confronted with bright beach bars and empty beer bottles along the promenade.

"When I looked around, the view did not change: every bit of beach was occupied by crowded bars, and behind them were high-rise hotels or piers where new ones were being built," writes author Rebecca Astill.

The government is also unclear about what tourism model it will use, as it attempts to move towards elite tourism, in a country that still lacks adequate infrastructure, has problems with waste management, and lacks a skilled workforce.

But, one thing is obvious, tourist interest in Albania is being used as a motive or tool for the "Golemization" of the entire Albanian coast, which could turn into a boomerang in the medium term future.

The risk is similar for mountainous areas, which are expected to see another surge in construction from the latest "mountain package" project./ Monitor.al

 





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