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Tourism that is attracting foreign investors, but is image alone enough?

2024-01-27 11:06:04Biznes SHKRUAR NGA REDAKSIA VOX

Tourism that is attracting foreign investors, but is image alone enough?

In 2023, Albania had the highest promotion in the international media for tourism. The effect achieved is a historical record in the number of visitors. The impact of this boom was clearly seen in the growth of supporting industries and was sealed by the positive current account balance. But can an improved tourism image sway investors' compass? For international institutions in Albania, as a link between potential investors and our country, only a good tourist image is not enough. For Italian, German and Dutch businesses there is a need for additional steps in order to improve the business climate. However, this good moment for tourism is an element that gives Albania points in the eyes of everyone.

Albania was visited in 2023 by over 10 million foreigners, turning it into the best historical year of the tourism sector.

The impact of this increase is clearly seen in the current account balance, where according to the Bank of Albania, the expenses of foreigners in Albania reached a record of 3.2 billion euros in the 9th month, with an increase of 47% compared to the same period a year ago and double that of 2019.

The impact of tourism went beyond the sector, extending this effect to supporting industries, which have also been booming, ranging from rental cars to the marine industry.

This moment for Albania, whose name was mentioned more than ever in promotional articles, is a key point for what steps will be taken next.

This has to do not only with the measures to continue the growth of the sector through the improvement of service, infrastructure, transport, but also with its consolidation as a tourist destination or brand in foreign markets.

In this new context, the questions naturally arise: Can this new touristic dimension of Albania also change the approach of investors to our country? Has the new exposure brought increased interest in new investment projects?

"Monitor" received impressions from three international organizations that are the first meeting point between potential investors and Albania, starting with ICE Tirana for relations with Italy, the German Chamber of Commerce and Industry (DIHA) and the Embassy of the Netherlands.

Italians, interested in mechanics, pharmaceuticals and tourism

Italy remains the main trading partner of Albania with 29.5% of trade exchanges according to the Foreign Trade statistics of October 2023. The geographical proximity has also made the Italian enterprises that have invested in Albania take the first place and the sectors are more comprehensive.

Francesca Mondello, Director of ICE Tirana, an agency with the mission of facilitating the internationalization of Italian companies in Albanian distribution channels, estimates that the interest in Albania continues to remain high and the good tourist performance has awakened curiosity about our country throughout Europe. But what are Italian investors most interested in when they come to ICE Tirana?

"Requests from Italian enterprises are mainly related to the analysis of the potential of specific sectors, promotion, business climate, research and verification of the reliability of local partner companies and local legislation.

Attention is paid to infrastructural development projects in the transport, energy, agriculture, digitization sectors," she asserts.

Regarding the sectors where investments have been stable year after year, Mrs. Mondello underlines that they range from mechanics, chemistry, pharmaceuticals and the medical sector, agri-food, textile and clothing, construction, engineering services, infrastructure and contract services to tourism and training.

German business, interest in IT; Netherlands for energy and agriculture

The global developments, but also the internal ones of Albania, have changed the projects or potential investments that are oriented to the country. Bledar Mankollari, Executive Director of the German Chamber of Commerce and Industry (DIHA), claims that developments in the labor market have made Albania less attractive in projects that require a large workforce.

On the other hand, technological developments have given rise to professions related to information technology, and German companies have begun to expand this sector in Albania as well.

"In terms of access to the labor market, we can say that Albania is no longer as attractive as it was in the last 30 years for textile and footwear companies.

In the last two years, we have mainly had requests from companies for software development, which want to settle in Albania and work for clients in Germany," he affirms.

Regarding other sectors that present potential, Mr. Mankollari emphasizes that infrastructure, energy and tourism remain strong points for investment in Albania.

As for businesses from the Netherlands, the embassy confirms that interest continues to remain in some sectors.

"The figures on the trade between Albania and the Netherlands have had a continuous increase during the last years. The official annual data for 2023 will be available soon, but interest remains high in sectors such as agriculture, dairy, energy and infrastructure", the Embassy of the Netherlands underlines.

Only the good image of tourism is not enough, what investors are looking for

Promoting and creating a positive image for Albania as a tourist destination can be positive, but it is not enough to convince an investor to bring and implement various investment projects in our country.

At least this is the idea that is created by the impressions that the contact offices between foreign businesses and Albania currently have. A number of other more important elements, which are summarized in what is called the business climate, need to be improved in order to convince a business to invest.

"I have been running the ICE Office in Tirana for two years now. I think that it is essential for the progress of Albania's journey towards the European Union and, as a result, the fulfillment of the conditions defined by the three Copenhagen criteria.

The business climate still needs to be improved and the reliability and stability of the system requires a combination of different factors, such as further strengthening of the rule of law, administrative and judicial reforms, the fight against corruption, accurate information, incentives and above all the active support of institutions ", underlines Mr. Mondello from ICE Tirana.

Improving the climate is closely related to legal measures aimed at removing barriers or red tape, so that doing business is easier.

"In the short term, I think that simply the implementation of legal deadlines by the public administration, both in the granting of various permits and also in VAT refunds, would have a very positive effect on the improvement of the business climate.

In the medium and long term, I think that the government's deregulation initiative is in the right direction, which would give businesses more oxygen in their daily work.

This coupled with a more positive approach in the law for public consultation, but not only at the level of the law, as it is foreseen, but also in the by-laws, would improve the climate of doing business", says Mr. Mankollari from DIHA.

For the Embassy of the Netherlands, the latest report of the European Commission for our country can provide better guidance for improvements that can be made.

"Albania offers opportunities, both for its geographical position and for the current geopolitical context. Regarding the opportunities to improve the business climate in Albania, we suggest that we take a look at the assessment made by the European Commission in its latest report on Albania, as part of the enlargement package", the embassy's response states.


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