The number of foreign tourists to Albania dropped by 1.5 percent to 3.46 million in 2013, down from a historic high of 3.51 million in 2012, registering the first decline since 2000.
TIRANA, June 22 – For the first time in more than a decade the number of foreign tourists visiting Albania registered a slight decline in 2013 while tourism revenue continued their downward trend for the fourth year in a row, unveiling the critical situation in one of Albania’s most promising sectors.
Data from the country’s state statistical institute, INSTAT, show the number of foreign tourists to Albania dropped by 1.5 percent to 3.46 million in 2013, down from a historic high of 3.51 million in 2012, registering the first decline since 2000.
Meanwhile, tourism revenue registered a drop for the fourth consecutive year in 2013. Central bank data show tourism revenue dropped to 1.1 billion euros in 2013, down from 1.14 billion in 2012 registering the lowest level since 2007.
Albanians’ spending on trips rose to 1.1 billion euros in 2013, up from 1 billion euros in 2012 and the peak 1.12 billion euros in 2011 when Albania’s visa regime to the Schengen area was lifted.
For the first time in a decade the tourism sector registered a negative balance sheet of around 6 million euros in 2013. The tourism sector has positively contributed at 50 to 100 million euros annually in Albania’s current account.
Albania’s tourism operators say the new fiscal package which left the value added tax on the tourism industry unchanged at 20 percent and increased the income tax for mid-sized and big enterprises to 15 percent will further complicate the situation in the tourism industry which has been suffering a shrink in revenues in the past four years.
The Albanian Tourism Association said the increase in the tax burden will make the Albanian tourism industry less competitive compared to other regional countries where VAT on the tourism sector ranges from 5 to 8 percent. The Association expected VAT on tourism to drop to 10 percent under the new fiscal package as promised by the current government during the electoral campaign.
The Albanian government is working on a new law on tourism and a mid-term strategy in the tourism sector which has been facing crisis impacts in the past four years.
“The whole work targets turning Albania into a tourist destination by making full use of national resources, the beauty of Albania’s landscape, the cultural and historical heritage, hospitality, the historical and cultural values by respecting environment protection and promoting sustainable tourism to decently represent the country,” minister Gjermeni has said.
Albania lost six places in the 2013 Travel and Tourism Competitiveness Index, ranking worse to its regional competitors mainly due to poor business environment and infrastructure. The report published by the World Economic Forum surveying 140 global economies ranked Albania 77th, compared to 71st a couple of years ago, with a total score of 3.97 on a 1-to-7 scale, sandwiched between Ukraine and Armenia, leaving behind only landlocked Serbia, Bosnia and Herzegovina and Moldova among European countries.
A key sector
In its latest report, London-based World Travel & Tourism Council says the direct contribution of Travel & Tourism to Albania’s GDP was ALL 68.1 bn (4.8 percent of total GDP) in 2013, and is forecast to rise by 5.5 percent in 2014, and to rise by 5.6 percent pa, from 2014-2024, to ALL123.6bn (6.1 percent of total GDP) in 2024. The direct contribution primarily reflects the economic activity generated by industries such as hotels, travel agents, airlines and other passenger transportation services (excluding commuter services). But it also includes, for example, the activities of the restaurant and leisure industries directly supported by tourists.
The total contribution of Travel & Tourism to GDP (including wider effects from investment, the supply chain and induced income impacts) was 16.7 percent of GDP in 2013, and is forecast to rise by 4.6 percent in 2014, and to rise by 5.4 percent pa to 20.9 percent of GDP in 2024.
In 2013 Travel & Tourism directly supported 41,000 jobs (4.3 percent of total employment). This is expected to rise by 5.2 percent in 2014 and rise by 3.5 percent pa to 61,000 jobs (5.7 percent of total employment) in 2024, says the World Travel & Tourism Council.
In 2013, the total contribution of Travel & Tourism to employment, including jobs indirectly supported by the industry, was 15.2 percent of total employment (146,500 jobs). This is expected to rise by 4.1 percent in 2014 to 153,000 jobs and rise by 3.2 percent pa to 210,000 jobs in 2024 (19.5 percent of total).
Visitor exports generated ALL 154.0bn (23.2 percent of total exports) in 2013. This is forecast to grow by 6.3 percent in 2014, and grow by 5.6 percent pa, from 2014-2024, to ALL 282.5bn in 2024 (22.2 percent of total). Visitor exports includes spending within the country by international tourists for both business and leisure trips, including spending on transport, but excluding international spending on education.
By 2024, international tourist arrivals are forecast to total 4,350,000, generating expenditure of ALL 282.5bn, an increase of 5.6 percent pa. Travel & Tourism investment in 2013 was ALL15.4bn, or 4.3 percent of total investment. It should fall by 2.2 percent in 2014, and rise by 4.1 percent pa over the next ten years to ALL22.5bn in 2024 (4.4 percent of total).
Leisure travel spending (inbound and domestic) generated 77.3 percent of direct Travel & Tourism GDP in 2013 (ALL143.7bn) compared with 22.7 percent for business travel spending.
Out of 184 countries, Albania ranks 46th on long-term growth 2014-2024 and 39th for Travel and Tourism’s total contribution to GDP at 16.7 percent in 2013.
