European Central: Albanian Tourism Industry Struggling
GENT SHKULLAKU
In Albania, tourism has significantly increased since 2014. The number of visitors arriving in the country increased 78 percent in five years and reached a peak of 6.089 million tourists in 2019. Tourism in 2019 was responsible for over 9 percent of the annual GDP. Understandably tourism significantly decreased in 2020 as a result of the pandemic but unlike other countries such as Greece which are enthusiastically welcoming back tourists, Albania is concerned that the sector will continue to suffer. In 2020, Albania saw 60 percent fewer tourists than the country received in 2019. 2021 was a better year but still ended with just over 600,000 less tourists than 2019. Eastern Europe is the second most important region for tourists after Southern Europe and 369,000 visited Albania in 2019. With the invasion of Ukraine, Albania stands to lose a lot of tourists from Eastern Europe, who mainly previously came from Ukraine, Belarus, and Russia.
Tourism has the potential to expand and contribute more to the Albanian economy, but the problem is finding workers may be challenging. Albania has had a trend of emigration; the population peaked at 3.287 million in 1990 and the country has lost almost a million residents since then. The issue is that as people continue to leave, Albania is left with fewer workers to help grow the economy and sectors such as tourism. This has led to businesses in the hospitality industry paying more to hire foreign workers from Serbia and Italy. This results in these businesses having to charge higher prices, which is slowly pricing out Albanians from being able to enjoy their own country. These hire prices prevent Albanians from being able to travel within the country and be able to eat out or stay in a hotel room. Even with a slowly shrinking population, it still has 2.838 million potential domestic customers that it may lose due to prices.
Looking at Albania’s wages, they are amongst the lowest in Europe. In 2018, the median hourly wage was only 1.73 euros. This leads Albanians to look for work elsewhere. Within the European Union, the majority of Albanians working abroad migrated to Italy, and are the second-largest ethnic minority group in the country after Romanians, with 433,000 Albanians in the country. In order to address the issue of losing workers, one possibility is that businesses in the tourism industry could try to raise salaries to keep Albanian workers satisfied instead of having to pay even more for foreign workers. Low salaries however also raise the issue of how Albania’s economy may continue to struggle to have enough workers once it becomes a member state of the European Union. This is because after a nation becomes a member state of the bloc, other member states may only restrict the freedom of movement of workers for 7 years in order to help their national economies prepare. The new member state also has the right to restrict migration from other member states. Until there is a significant convergence between wages of Albania and EU nations, Albania can expect to continue to lose workers who migrate for higher salaries.
Tourism was also a campaign issue during the previous election in 2021. Prime minister Edi Rama who won the election promised to help the industry develop. This includes building up infrastructure such as airports. Prime Minister Rama was able to perfectly time the opening of Kukës airport to open just before the parliamentary election. Kukës airport primarily caters to cheaper flights, keeping in mind Albanians who live and work abroad. To celebrate the opening of the airport the flag carrier Air Albania had a flight arrive from London Stanstead airport carrying the Prime Minister, proving he was able to keep his campaign promise of flights between Kukës and London. The national government has partnered with a swiss consortium to build another international airport in Vlora, located 90 miles (150 kilometers) to the southwest of Tirana. The airport will have the capacity to handle 2 million passengers annually and operations will be led by the consortium for the first 35 years after it is opened. This will be Albania’s third international airport, impressive for the country based on its population.
It is additionally obvious that tourism is considered important based on how workers were treated by the government based on the national vaccine rollout. Workers in the tourism industry were also group prioritized to be vaccinated in an attempt to limit damage to the industry during the pandemic. Workers in hotels, restaurants, and property owners who rent out their homes by the sea or in the mountains were vaccinated early in order to try to allow tourism to continue in the country. In 2020 Albania still saw the fewest number of tourists based on data available going back to 2014 but fortunately rose significantly in 2021.
While people may be more familiar with Western Europe, it is important to not count out the Balkans. As is evident by the relatively quick rise in tourism in Albania, opportunities do exist and need to be supported by smart government policies. Albania’s government has tried to support the industry, but as countries around the world are realizing, external variables such as war are difficult to control. Prime Minister Rama will have to attempt to do his best to help steady all sectors of the economy and not just tourism. Looming EU membership may help Albania’s economy develop, yet simultaneously cause the economy to be short of enough labor to help continue strong economic growth.
