- Initial months showed optimism, with foreign arrivals jumping by about 40% from January to May.
- Accommodation facilities saw price hikes of up to 90%. Price increases weren’t solely due to demand, as operational costs also rose.
- A shortage of workers led to increased wages in the South, reaching about 1000 euros per month for service employees.
- Unsustainable coastal development, when fast construction exceeds infrastructural capacities, and environmental management challenges, including trash and sewage, might dent economic growth in a sector.
The adage that a good start is half the work didn’t quite hold true for Albania’s tourism sector in 2023. While the initial months showcased a wave of optimism, with foreign visitor entries soaring by about 40% from January to May, hopes for a seamless season faced hurdles.
The long-held vision of all-year-round tourism materialized, finally drawing visitors to the sun-soaked beaches of summer and Albania’s rich cultural, culinary, and historical offerings. Albania’s affordability, hospitable locals, diverse attractions, and culinary delights captivated the social media scene. Foreign media were particularly enchanted by Ksamil, often dubbed the “Maldives of Europe.”
As demand for accommodation units doubled compared to the previous year, it spurred many locals to rent out their homes daily, from the capital to both southern and northern regions. This surge in demand and the influx of visitors had businesses anticipating a lucrative summer, especially in the South, prompting many to hike prices.
Price Hikes and Impact on Tourism
Accommodation prices increased by up to 90%. This wasn’t solely due to strong demand; operational costs also contributed to the pricing changes. The workforce shortage drove wages in the South to levels as high as €1000 monthly for service staff. While hotels managed their tax obligations, they also faced the responsibility of funding their sewage infrastructure.
The weakening Euro further strained hotel revenues, leading establishments to adjust prices. Rising prices naturally deterred potential visitors in a country where affordability is a key competitive advantage. Complaints soon surfaced about declining tourist numbers. June saw a halving growth rate in foreign arrivals compared to the first five months.
The exit of Kosovan citizens, stemming from visa waivers, coupled with a decrease in local population and the departure of potential Albanian holiday-goers due to hefty prices, dampened demand further. Fortunately, market self-regulation mechanisms kicked in, prompting a gradual price decline, although the reputation damage had already been inflicted.
Transportation and Infrastructure Hurdles
Despite the self-adjusting nature of supply and demand, Albania faces deeper-rooted issues that pricing shifts can’t resolve. Infrastructure problems have persisted for many years, with investments primarily focused on the South, leaving the central regions grappling with unmanageable traffic, particularly in summer.
Public transportation remains disorganized, making navigation difficult for tourists due to the absence of Google Maps integration. For instance, travellers are misguided into thinking they must reach Rinas to catch a bus to Vlore.
Furthermore, a report by the European Commission placed Albania at the bottom in Europe (see infographic below), with only 41.2% of its coastal waters classified as excellent. This figure starkly contrasts with Croatia’s over 96% and Italy’s over 90%. Similarly, Albania ranks last among 27 nations for inland waters, with 33% rated as excellent.
Unlike other countries striving to curb pollution and enhance water quality, Albania’s government imposed these responsibilities on businesses, similar to municipalities entrusting hotels with waste disposal duties while still collecting cleaning taxes.
The unchecked coastal development, where the rapid pace of construction eclipses infrastructural advancements, along with environmental management concerns such as waste, sewage, drainage, and energy, threatens to become a liability for a sector that holds the potential to drive Albania’s economic growth.
