More area provided for hotel construction permits

Tirana Times
By Tirana Times June 4, 2019 12:14

More area provided for hotel construction permits

Story Highlights

  • The area granted for hotel construction permits has significantly increased even though the total number has not. This indicates that some of these permits are provided for structures with high accommodation capacities, even though the regulation for 4 and 5 star rating has changed.

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TIRANA, June 3- As the political turmoil in our country is scaring the tourists away, during the first quarter of 2019 a total area of 286 thousand square meter land were given to hotellerie construction permits. According to the Albanian Institute of Statistics, 28 permits are given so far, with only three more permits compared to the same period last year, however it is estimated that the area provided is 15 times more, with an average of 10 thousand square meter per project. This indicates that some of these permits are provided for structures with high accommodation capacities.

The interest to build in the hotel sector in the country has started growing since 2016, with a rapid increase in the number of permits given. During this year a total of 11 construction permits were granted, while in the following years 53 and 75 permits were granted in 2017 and 2018, respectively. Growth rates have continued throughout 2019 where only the area given in the first three months is twice the area given throughout the whole of 2018. The approximate value of the construction permits granted during the first quarter of 2019 is estimated at 9.9 billion lek (80.9 million euros). The whole value of the entire permits granted during 2018 totals to 3.74 billion lek (30.5 million euros), or 2.6 times less.

After the Government’s fiscal ease for investment in tourism, there has been an overturn in this sector. However, according to sector experts this may lead to a market surplus for luxury hotels. Market managers say investment in luxury hotels will have overcapacity and will distort competition. Zak Topuzi from the Hotel and Tourism Association has previously made a statement to business and economy magazine Monitor where he said that there is an overwhelming market in Tirana for the hotel services of 4-5 stars. Competition to get corporate government services, regional or other conferences has brought a worrying situation on the quality over price ratio. The main hotels which are rated 4-5 stars, are playing at minimal prices below cost, damaging the market and selling in the 3-star hotel chain, and up to 50 percent cheaper than the region.

Yet, the categorization of accommodation structures that implies the number of stars each hotel can hold, according to the standards and services it offers has been pending for years. The full legal framework was adopted in 2016, when it received “a good deal” of sub-legal acts accompanying the basic tourism law. A recently approved government decision seems to pave the way for the cracking of categorization of structures, adding to the regulation “On conditions, criteria, tariffs, deadlines and the procedure for classification of accommodation structures” some points that are related precisely to this process. Thus some points added to the Regulation include underlining the categorization of accommodation structures, and a new clarifying point on the term categorization certificate. The categorization certificate, which is the addendum to the new regulation, is the document issued by the standardization committee of tourist activities for the type of accommodation structure.

The government’s decision also stipulates that any tourist entrepreneur who operates as an accommodation facility must be equipped with a categorization certificate and that the manner and procedure for categorization will be determined by an order of the Minister of Culture.

In the changes made to the regulation, it is also specified how the rating of 4 or 5 star brand names will be categorized. In two other added points, it is specified that the Ministry will be cooperating with international agencies and organizations to carry out an assessment for the classification of the accommodation structure, and in terms of foreign brand name will be made with the request of the tourist entrepreneur, until the signing of the agreement with international agencies or organizations.

Tirana Times
By Tirana Times June 4, 2019 12:14