Tourism businesses suffer 40% shrink after spoilt image

TIRANA, March 17 – Tourism businesses say the ongoing political crisis and its escalation in a Jan. 21 anti-government demonstration when four protestors were shot dead has negatively influenced on the industry’s performance with revenues during the first two months of 2010 nearly 40 percent down compared to the same period in 2010.
The figures were announced on Monday during a meeting the Albanian Tourism Association (ATA) had to analyze the impacts of the political situation and the deepening of crisis in the tourism industry following the spoilt image from violence and killings on Jan. 21, image which were aired all over the world.
“Following the events of January 21st and the subsequent political crisis, hotels and other tourism businesses were the first to get hit in the very basic dimensions of their activity such as cancellations, immediate reduction in cash flow, and the resulting layoff in personnel due to reduced volume of business,” said the association.
As one of the industries with the greatest multiplier effect in the economy, the tourism industry is the basis of the sustained economic growth of Albania. Based on official statistics, the sector contributes over 14% of Albania’s GDP, while the hotel sector alone is estimated to provide over 140,000 jobs. Taking into account the whole value chain, tourism is the most active industry in job creation. Yet, it is also the most vulnerable to factors that damage Albania’s image as a stable country, such as the recent events, ATA representatives said.
With less than three months to go before the new tourist season kicks, ATA reiterated its request to reduce VAT to 10 percent, from 20 percent currently, and lower local government accommodation taxes to below the current 5 percent rate. It also suggests that state authorities should develop and promote the image of Albania as a unique tourism destination through professional branding, marketing and strategic planning.
The ATA representatives highlighted that the tourism industry is dependent on the image of Albania as a stable, safe and welcoming country, an image which gets immediately negatively influenced by political instability.
“After 20 years of transition and serious problems with the image of the country as a tourism destination, Albanian tourism was presented with unique marketing opportunities when it was listed as No.1 destination by the Lonely Planet and received coverage by several international travel media. The interest generated from this positive media coverage should have resulted in increased number of reservations for the coming season. Instead, the sector was negatively impacted by the deep political crisis which culminated on January 21, 2011.”
Tourism revenues during the third quarter of 2010 grew by only a slight 26 million euros year-on-year and dropped by 59 million euros compared to the first nine months of 2009, figures proving Albania’s most promising future industry did not manage to escape the crisis effects despite a significant rise in visitors reported by government officials.