Albanian Tourism: Challenges and Opportunities

As tourism has become one of the world’s largest industries and one of its fastest growing economic sectors, countries all over the world are trying to reap its benefits. Among them is Albania, where the government has christened tourism as a main instrument for domestic development. While such approach is beneficial in many regards, there are also many implicit ramifications that could backfire. Indeed, a comprehensive analysis of tourism in Albania would have to highlight the opportunities and challenges that lie ahead. Below I offer only a small glimpse of how such a report could potentially look and suggest some government strategies that could be implemented.

In many ways, the geopolitical location of Albania is a blessing and a curse to Albanian tourism. Ruled under a totalitarian communist regime until 1990, much of the rich history of Albania remains unknown to the outside world. Albanian governments have put strenuous efforts to increase the image of the country by promoting tourism. Albania’s official logo is “Albania: Go your own way”, which has also defined the way that the country is branded to the outside world.

In the present day and age, it is easy to gather information about a country if you are planning to visit it. Albania is no difference in that regard. Numerous videos can be located on YouTube that highlight some of the must-visit locations in Albania (for a sample of a few videos, click here, here and here). As one can attest from the videos, the country offers pristine beaches, amazing hiking and trekking locations, as well as, numerous historical and cultural landmarks. It is precisely thanks to this that in the recent years Albania has been consistently ranked as a must-see destination.

A simple look at Wikipedia can easily highlight why such praise is deserved. Yet, a more in-depth analysis needs to be done about the challenges that tourism faces in Albania and how the Albanian government can address some of them.

According to the Albanian Institute of Statistics, around 4.73 million foreign citizens has been visited Albania in 2016. Such number is a great indicator that many are willing to visit the country. As the graph indicates below, Albania is in a sweet spot when comparing it with other countries. It is competing with countries like Chile etc, but is falling behind in comparison with its neighbors of Greece, Croatia and Italy.

(I produced the chart using the data from the following site. While the data is for different years for some countries such as 2014, 2015 or 2016, the difference is not substantial for the purposes of my argument.)

Tourism Chart

It is also important to note that the number is also a bit biased because it does not express the fact that a large portion of that number is due to patriotic tourism, namely Albanian diaspora that chooses to spend the vacations in the homeland. Any Albanian – regardless of having dual citizenship – who enters the country using the passport of another country is considered a foreign citizen for purposes of the statistic. That means that thousands of Albanians in Kosovo, Macedonia, USA, Italy, Switzerland, Germany and the rest of the world are calculated as foreign citizens.

While they are and will always be welcomed, the duty of the government is to reach to other untapped potential visitors. The Albanian government can promote tourism by doing a number of things, chief among which would be to relax its immigration controls; this could be accomplished through removing visa requirements. A current visa policy map is provided below. (courtesy of Wikipedia)

Visa_policy_of_Albania.png

This last year, the government decided to allow nationals of the following countries (Bahrain, Belarus, China, Georgia, Oman, Qatar, Russia, Saudi Arabia and Thailand) are temporarily exempt from 1 April to 31 October 2018, which is a great way to increase tourism.

According to the data provided the Albanian Institute of Statistics, below is a breakdown of the visitors by regions.

Albania data

(I produced the chart, whereas data was taking from the Albanian Institute of Statistics for 2017)

Such information, while useful, is albeit limited. The government should utilize additional resources to gather data on the tourists and their country of origin. Only in that way it can determine if its branding/marketing strategies are working in any specific country.

Furthermore, more research needs to be put on the reasons behind visiting the country. By and large, tourists prefer the south for its magnificent beaches, like to visit the northern part of the country for trekking and hiking purposes, Kruja for its historical landmarks and Tirana for its European vibe and so on.

Yet, the Albanian government (and the private sector for that matter) need to do specific research on how many days tourists decide to come, which locations they choose and why. Unless such research is done, tourism in Albania, although it might increase in aggregate numbers, will still not reach its true potential. Private sector could utilize the data to offer better, more competitive services to potential customers. It could also use the information for putting the country on the map, namely getting in touch with a lot of travel agencies and promoting Albania through them. Such research would also allow the Albanian private sector to brand its product better, which theoretically would increase the sale of their products in other markets as well.

The Albanian government has the biggest challenges. Infrastructure remains an issue, probably the main one. Transportation to and around the country is subject to a limited and declining infrastructure. Take the airports for example. The Mother Teresa International airport is the currently the only operating airport in the country, which gives it a monopoly status and de facto leads to higher (and arbitrary) pricing. Many Albanians, particularly those from the northern regions, opt out to land at the Skopje International Airport, as the difference in ticket price can offset the transportation cost from Macedonia to Albania.

Late at acknowledging this sad (and shameful in my view) reality, the Albanian government has tried to mitigate the situation by increasing the number of airports within Albania. As of today, other airports in the country are present in Kukes and one is being built in Vlora, but none of them are operational. There is even talks of building another airport in Saranda. Despite the intricacies and conspiracies associated with them (accusations of crony capitalism which I will not elaborate), the truth remains that the government is way behind in regards to Albania’s connectivity with the rest of the world. The current government has stated that it plans to make the airport in Kukes operational in 2018, whereas it also has reached an agreement to launch Air Albania through a private-public partnership and the aide of Turkish Airlines.

In my view, this is not enough. Public infrastructure needs much more serious consideration. For example, the northern regions of Albania offer amazing highlands for hiking and trekking; they could be used to attract tourists all year round. Yet, highways to those areas are underdeveloped or taking too long to being developed. Take for example, Arberi’s Road, a highway that would connect the region of Diber with Tirana. First promised in the 2005 general election as a major project that would be done within the first term of any administration, it is still not completed. If completed (the current government has stated it will be finished before 2021), it would be a major boost to tourism near the mount Korab region and the Lure National Park, as it would cut transportation time in half, while improving considerably the quality of the road.

Other public infrastructure projects that are praised these days include the rehabilitation of the Tirana – Durres railway, a project long awaited. Indeed, while a lot of these projects will bring better connectivity between the people in both areas, they will also be useful to tourists who prefer not to drive around the country. Experts have long argued the efficacy of a robust railway system in the country but their advice has gone unheeded.

The current Albanian government has been vocal about how tourism can be used to revitalize forgotten communities, particularly in rural villages. Prime Minister Rama, a painter by trade known for his famous – or infamous – bohemian lifestyle, has pushed for the idea of labeling certain villages as touristic locations. With the motto of “100 tourist villages”, Rama hopes to attract more attention to the areas. This project follows another poster child of Rama, “Urban Renaissance,” the grand project that Rama campaigned on in 2013 that aimed at the revitalization of cities throughout Albania.

Needless to say, both projects produce more marketing headlines than concrete results. One can go as far as label them unrealistic or doomed to fail. Take the Urban Renaissance project. In an urban area such as Tirana or Fier, the project makes sense, but if you take a city like Kukes with a population of roughly 20,000 then one really questions the whole notion of urbanism. In my view, the government would be much better off investing in grand public infrastructure (roads, energy diversification, healthcare, education) rather than focusing on the local issues. It can do so with earmarking the funding or through favorable public-private partnership (which would be subject to transparency and in tune with the national interest).

Of equal importance is also the enforcement of government role. Given the totalitarian nature of the communist regime, Albania still remains a mystery to the outside world. As such, many tourists are not sure whether it is safe to visit the country, despite its location in Europe and it does not pose any immediate or additional threat to tourists. It is precisely for this reason that the government should step up its efforts to ensure better safety standards in the tourist attractions. Some work has been done but a lot more remains, particularly when it comes to beach safety. The government needs to ensure that local authorities are respecting the ordinances about lifeguards on duty, as well as, the area apportioned for the public.

Indeed, a viable government pilot program would be one that invites Albanians who live abroad to train Albanians back home in the area of tourism. There are roughly 1 million Albanians who live in Greece who have spent their days working in hotel management and catering, as well as, safety around beaches and tourist locations. The private sector can also tap in this human capital if it really wants to increase the quality of its services, whereas the government could benefit from their insights on how to implement a successful strategy.

Maintenance of traditional landmarks is also a major issue that the government needs to address. As pointed out in Dear Albania, there are many landmarks that are in serious need of attention. An inherited communist infrastructure that is declining daily seriously haunts any progress that can be made. In many ways, this should be a priority for the government considering the historical importance of such landmarks, but also the fact that many of them can be visited during all seasons, which could be a nice way to boost tourism year round.

A note of concern needs to be kept in mind. In 2017, contribution of travel and tourism to GDP (% of gdp) for Albania was 26.2 %. Contribution of travel and tourism to GDP (% of GDP) of Albania increased from 9.5 % in 1998 to 26.2 % in 2017 growing at an average annual rate of 6.05 %. While the increase is a good sign of a developing country, it also poises some concerns because it risks creating dependency on one sector. This would be imprudent for the economy; it would fluctuate based on how the sector was doing. Above all, it would create a dependency on the good graces of all countries, like the situation in Turkey has shown in the past.

In closing, it is important to acknowledge that this just a skeleton of the major challenges and opportunities that the Albanian tourism sector presents. Additional research is necessary and pivotal to reach adequate strategies. The burden of such research falls within the government if it serious about putting the country on a map as a tourist haven. Put differently, the Albanian government has no time for vacations.

 

 

 

 

 

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The Know Nothing Virus

A virus strikes Albanian public servants each time corruption scandals become public. This is the Know Nothing Virus, for its consequences are the same as its name – the victims know nothing after they get stricken. The last scandal with Bank of Albania – the central bank in the country – proves the point.

Earlier this summer, a scandal revolving around the Bank of Albania became public. Apparently, a number of employees of the bank had been stealing money, amounting to approximately the nominal value of 7.1 million dollars. Dozens of employees have been called in for interrogation and a few have been arrested. Yet no one feels responsible or acknowledges responsibility; at least, no one admits to knowing anything.

“There was chaos. There was no regulation about the responsibilities of each person. We are still shocked. We don’t know anything,” said Petrit Ramohitaj, Chief of the Active Cash, and Bashkim Xhilaga, former Monitoring Supervisor, after they were arrested.

The Director of the Banknote Emitting Department, Dorian Collaku, couldn’t believe that the investigators had the nerve to call him in for a deposition while he was on vacation. His answer: “Let me finish my vacation and then I will come to testify.” And so he did, only to state that he knew nothing.

The Governor of the Bank of Albania, Ardian Fullani, is probably the most controversial figure in this scandal. Mr. Fullani met with members of the Parliamentary Commission of Economy to discuss the issue. In a public declaration, he stated that the act itself does not reflect on the vital role of the institution and that the people responsible will face justice.

Reasonable observers agree that it would be absurd to expect justice with Mr. Fullani still in charge of the central bank. So far, he has not even stated that he feels morally responsible for the act. There is an American saying that President Harry S Truman made into a sign for his desk: “The buck stops here.” For Mr. Fullani, the buck doesn’t seem to stop anywhere – certainly not on his desk. How do we know that? It is basic accounting. The person in charge of the organization is responsible, in the end, for accounting errors, deliberate or not, made while he is in charge. Any accounting student is taught that, on a trial balance, debits must equal credits – no matter what. Any student is also taught that the person in charge of the business is responsible for any serious accounting problems affecting the business accounts while he is in charge. Perhaps Mr. Fullani skipped those lessons.

Mr. Fullani states that Parliament will make sure that a thorough investigation takes place of the Bank of Albania. By Albanian political standard, “a thorough investigation” means a never-ending, non-productive investigation that will end by blaming the poor slob with no connections or influence. And how could any reasonable person expect the investigation to be candid when Mr. Fullani is in charge of almost every committee that would undertake or assist such an investigation? Albania does not have a constitutional privilege against self-incrimination (which Americans know as the Fifth Amendment) if events take an unexpected turn, revealing criminal responsibility on the part of the bank’s management, and Mr. Fullani knows that.

The public demands that Mr. Fullani resign, and yet it seems they are powerless. A few protests were organized but they were unsuccessful. In an extraordinary meeting of the Supervisory Council of the Bank of Albania, one of its seven members, Ermelinda Meksi, a former MP, proposed that the council demand the resignation of Mr. Fullani. All the members of the Council voted for the proposition to be put on the agenda. However, the other six members of the Council, including Mr. Fullani as its chairman, rejected the proposition once it was motioned.

Nonetheless, even if this Council did require the discharge of Mr. Fullani, the Albanian Parliament would have the last say on the matter by voting on it. But Parliament is out of session this summer, as its members are on vacation, and Mr. Collaku’s answer – Let me finish my vacations and then I shall come – seems to be standard in this case.

Erion Brace, MP for the Socialist Party and also chairman of the Parliamentary Commission on the Economy, posted recently on his Facebook page that he thinks that a profound legal, structural and human reform is still needed at the Bank of Albania. Somehow, those who have been watching the Bank of Albania slide into scandal and incompetence already figured out that such a reform is vitally needed.

Mr. Brace also stated that there are restrictions on the government’s power to suspend the Governor of the Bank and other members of the Supervisory Council. Reasonable observers might feel entitled to ask what restrictions could prevent the government from dismissing the bank’s management when bank employees had stolen over 7 million dollars without being detected or stopped. If such restrictions do exist, they would make a supervisory post at the Bank of Albania a dream job for many government functionaries and even many legislators.

Many critics consider the thefts at the Bank of Albania as a case similar in wrongdoing and scandalous significance to the case of the American company Enron, one of the biggest financial scandals in recent history. In light of such similarities, citizens of Albania started signing a petition to ask members of Parliament to discharge Mr. Fullani. The petition is expected to be signed in the upcoming days and then will be sent to the President.

And yet is the President of Albania, Bujar Nishani, the right man to receive this petition? Like the managers of the Bank, he too clearly knows nothing, as he hasn’t made any statement yet about the biggest theft ever made at the Bank of Albania. He too seems to suffer from the Know Nothing Virus, for which there seems to be no cure.

 

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Courtesy of Bank of Albania (at least this isn’t stolen yet :P)