This summer, you’ll probably have seen on social media that one of your contacts went on vacation to Albania or heard from a friend or family member that they were planning to visit the country. This, which could in principle be considered anecdotal evidence, is a reality that can be corroborated by astonishing data. Albania, one of these forgotten countries of the Balkansis experiencing a real tourist boom which is catapulting its economy. The massive arrival of travelers, especially towards the beaches of the Albanian Rivieraa coastal area in the south of the country washed by the Ionian River, is transforming this economy and providing opportunity to Albanians after decades of poverty, conflict and instability.
Data recently collected by Oxford Economics analysts speaks for itself. The cumulative number of foreign tourists from 2024 until August visited the country reached a spectacular figure of 300% of the local population. In other words, for every inhabitant of Albania, three foreign tourists arrived there this year. With a population close to 2.8 million, a total of 8.5 million foreign tourists traveled to the country between July and August this year, as recently reported by Tourism Minister Mirela Kumbaro. To get an idea of the scale of what was experienced this summer, 10.1 million tourist arrivals were recorded over the whole of 2023.
First, the data significantly leaves out 250% of Croatia and 150% of Greece, countries that have been top tourist destinations for years. Secondly, this 300% contrasts with the little more than 150% recorded by Albania until August 2019, which confirms the recent nature of this “boom”. Logically, the country’s economy cannot be immune from this phenomenon.
Albania was Historically the poorest country in Europe. After decades of political and economic isolation under the communist dictatorship of Enver HoxhaAlbania was a kind of autarchy, a country unknown to Europeans and the rest of the world. This isolation has led to profound economic backwardnesswith rudimentary infrastructure and an agricultural economy, with extremely limited industry. With the collapse of communism, the country faced a chaotic transition to capitalism, marked by corruption, financial crises and low economic growth. However, among all this chaos, the increasing openness of the economy allowed, little by little, Europeans and the rest of the world to discover a natural paradise that many have nicknamed the “European Caribbean” for a mile long. beaches with crystal clear waters and virgin landscapes in which archaeological remains stand out. But not only that.
A very special country
The unique character of this country is undoubtedly one of its great attractions. Although its resident population does not reach 3 million, the truth is that the “Albanian people” are much more numerous. Around 1.7 million Albanians are estimated to live abroad, mainly in Kosovo, Greece, Serbia, North Macedonia, Bosnia and Italy. This is the country everyone wanted to leave until recently.
Additionally, Albania is one of the few Muslim-majority countries in Europe (you can count them on the fingers of one hand). Of its 2.8 million inhabitants, more than half are Muslims, mainly Sunnis. However, this country is distinguished by its religious tolerance. Religions coexist in peace, which is necessary for a society a large number of Christians, who are more than 15% (orthodox, Catholic and evangelical). There are also a significant number of atheists and Albanians who prefer not to confess or show their beliefs.
Furthermore, within Muslims also put forward a Bektashi current or order (they are Sufi Muslims) which has its global “headquarters” in Tirana, the capital of Albania. These Muslims are known for their tolerance and open-mindedness: women do not reveal themselves, their followers drink wine and they do not label those who do not follow their “precepts” as heretics. Albania wants to become a sort of hinge or mediator between Islam and other religions. The Albanian government announced a few weeks ago that it was studying the creation of a sort of Vatican-like city for the Bektashi community. With all these incentives, it’s no surprise that Albania has become such a major tourist attraction, it’s not just its heavenly beaches and beautiful mountains that attract attention. The improving economy may soon allow some of these Albanians living abroad to begin returning home.
Albania is no longer the poorest country
“The Albanian economy is dominated by more than three quarters by the private sector, so the capacity of this sector to adapt to different circumstances, its vitality, is greater. At the same time, private investments made particularly over the last decade in the country’s tourism infrastructure or in sectors linked to tourism“, in the conditions of geopolitical crisis like Russia’s aggression against Ukraine, created powerful incentives for the rapid growth of this sector, thus helping to introduce the Albanian economy into an ascending trend”, explains Zef Preci , director, to the director of elEconomista.es. of the Albanian Center for Economic Research (ACER).
The truth is that in just a few years, Albania has ceased to be the poorest country in Europe. It’s not that the improvement is an unprecedented return, since its per capita income is still light years behind the European Union average, for example. But the truth is that, according to data from the International Monetary Fund: Per capita income of Albanians will reach $9,000 this year in purchasing power parity (PPP, an indicator that eliminates price distortions). In 2024, if the forecasts come true, Albania will compete with North Macedonia in terms of GDP per capita. Below are already countries like Bosnia and Herzegovina, Belarus, Ukraine (very affected by the war), Kosovo.
The most recent figures are encouraging. Albanian GDP grew by 3.4% in 2023driven by strong domestic demand and the exceptional performance of the tourism sector, which reached levels never before seen in the country. Additionally, the investment component recorded a significant increase, driven by private investments, including high foreign direct investment inflows.
The European Commission itself recognizes in a recent report the good performance of the Albanian economy: strong growth, low inflation and better budgetary balance. “The strong growth dynamic is supported by a boom in the tourism sector, increased investment and higher wages. The slowdown in import prices and the continued appreciation of the domestic currency are expected to bring the inflation rate to the central bank’s 3% target this year… the fiscal situation is also expected to improve and the deficit ratio /GDP will be reduced. to 2% in 2025, and that the public debt/GDP ratio will only decrease gradually.
There was no strategy with tourism
Albanians saw tourism as an opportunity to escape the poverty trap and, although the problems and challenges remain significant, they do not waste it. The growth of the tourism industry, coupled with improved security, has made Albania the dream destination for millions of tourists. From ACER, Preci highlights the significant contribution of tourism to Albanian GDP: “Even without a clear government strategy on the type of tourism the country is prepared to face. -massive, elitist or a combination of the two-, played a decisive role.
Asked about the origin of this recent and dizzying tourist boom, more progressive in other European destinations, Preci points to several factors: “The stratification of societies in Central European countries, the creation of a niche clientele (tourists ) with relatively low income, combined with excessive promotion of a hitherto unknown country on the part of the Albanian government, has spurred a significant increase in the number of tourists visiting the country, particularly in the last two to three years“. According to data from the Ministry of Tourism, 77% of travelers arriving in August came from southern Europe, compared to 9% from Western Europe, demonstrating that Albania has become an economical alternative for travelers from less wealthy economies of Europe.
The expert also highlights the increase in accommodation capacities in tourist services thanks to significant private investments, especially on the south coast, but also the introduction of “new” or previously minor tourist services, such as, lists he, adventure tourism, aesthetic health service tourismdental and sex tourism, which contribute to increasing the attractiveness of the country. Improved communications within the country have also contributed to the diversification of tourist destinations, he adds.
Asked about the sustainability of such a massive tourism model in a small country that has caught up so quickly, Preci acknowledges its shortcomings: “The Albanian government is recently developing a tourism development strategy, which should better clarify the model to follow. based on the current dynamics on the ground, as well as judging by the number of permits to build tourist complexes, tourist towns on the coast, etc., we can affirm in advance that this model is still far from being ‘be sustainable and that. serious public and private investment is needed in infrastructure to support tourism.”
The Executive Director of ACER gives as examples communication, the typology of buildings that do not destroy tradition, the promotion of local products, clean and ecological products, the growth of the culture of tourist services or business education . The risk of landscape and unsanitary damage Overcrowding of construction sites, especially on the coast, poses a real threat, as already happened twenty years ago in some maritime areas of Bulgaria, Preci warns.
The economy is improving overall
Another important point addressed by the expert is the “distribution” among the population of the benefits of this tourism boom. “The truth is that the economy as a whole has benefited and take advantage of the tourism boom“, but we can say that the distribution of benefits is still far from equitable”, recognizes Preci. As detailed, the main beneficiaries at the moment are service providers, such as airline agencies and Tirana International Airport, a series of tour operators, owners of hotel structures and restaurants.
On the other hand, Preci continues, the benefits are less for the state budget and, consequently, for all citizens. “The problems that have arisen in traffic, environmental pollution, etc. cannot be neglected. The main challenge is that national production, especially agricultural and livestock production, has not yet received adequate signals , that is to say that the rise of tourism has not yet “translated” into the growth of national production in this sector of the national economy, unfortunately, this has not yet happened”, concludes the economist.
