Shala river scenery with steep mountains and lush forests in northern Albania.

Ecotourism Including Blue & Cultural Tourism

Photo by Shutterstock / Bardhok Ndoji

Ecotourism Including Blue & Cultural Tourism

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Services
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Hospitality and Recreation
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
< 5% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
< USD 50 million
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
< USD 500,000
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Decent Work and Economic Growth (SDG 8) Responsible Consumption and Production (SDG 12) Life Below Water (SDG 14)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Life on Land (SDG 15) Reduced Inequalities (SDG 10) Sustainable Cities and Communities (SDG 11)

Business Model Description

Establish and operate a tourism businesses with a strong focus on sustainable practices, blue tourism activities, and the promotion of the country's rich cultural heritage, encompassing eco-friendly accommodations and aquatic sports enhancements, collaborating with local and international organizations to strengthen the preservation and development of tourism initiatives.

Expected Impact

Safeguard national heritage and improves visitor experience, thereby generating higher tourism yield and repeated guest rates while enhancing employments for the locals.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Region
  • Albania: Vlorë
  • Albania: Durrës
  • Albania: Berat
  • Albania: Shkodër
  • Albania: Kukës
Learn more

Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Services

Development Need
In 2021, Albania's services sector experienced remarkable growth, comprising 86% of the country's businesses, employing 64% of the workforce, and contributing 65.1% to the total turnover. However, this contribution falls short of the OECD average, where services typically account for around 70% of GDP. To fully harness the economic and social potential of the sector, it is crucial to prioritize innovative measures aimed at enhancing productivity (11, 12, 13, 14).

Policy priority
As per the National Strategy for Development and European Integration 2022-2030, Albania is committed to enhancing its service sector through comprehensive infrastructure improvements in transport, electricity, water supply, and waste management. Additionally it targets an 8.4% reduction in final energy consumption, with a projected 195.2 ktoe by 2030 in the services sector (3, 15).

Gender inequalities and marginalization issues
21.6% of women are employed in the services sector, however a significant portion of women refrain from entering the workforce due to domestic responsibilities (18%) or academic commitments (22.3%), highlighting the enduring impact of societal gender expectations (10).

Investment opportunities introduction
The Albanian government prioritizes attracting foreign direct investments, particularly in the services sector, notably tourism. Albania's service exports, mainly tourism-driven, have surged fivefold, outpacing EU-11 and WB-5 economies (17, 18).

Key bottlenecks introduction
Albania's services sector faces several significant challenges, including issues related to poor education quality resulting in skill gaps, infrastructure deficiencies in electricity and transportation, limited access to finance for small and medium-sized enterprises (SMEs), and regulatory barriers identified by the OECD Services Trade Restrictiveness Index, encompassing restrictions on foreign entry and obstacles to healthy competition (14).

Sub Sector

Hospitality and Recreation

Development need
Despite facing challenges such as earthquakes and the impact of COVID-19, Albania's tourism sector received a substantial USD 210 million investment in 2021 (7.5% of total investments). Rich history and culture offer untapped potential, but infrastructural issues persist. There's potential for tourism's GDP contribution to reach 9.3% by 2028, yet blue and cultural tourism are underexplored (1, 3, 4, 6, 7).

Policy priority
Under the 2021-2025 Government Program, tourism is defined as a growth driver in all its forms, encompassing marine and mountain development, including agrotourism. Albania aims to transform the sector into a significant contributor, comprising 24% of total output at USD 5,5 billion by 2030 and by 2028 tourism investments are expected to rise to 8.2%. Furthermore, strengthening rural tourism and in particular the agrotourism value chain is a priority (2, 3, 4).

Gender inequalities and marginalization issues
In Albania's tourism sector, women often occupy informal and low-skilled roles, curtailing their progression. While female entrepreneurship is emerging in tourism, the absence of comprehensive data hinders policy development. Women grapple with limited access to market data, legal backing, as well as negative cultural norms hindering their participation (8, 9).

Investment opportunities introduction
Albania aims to attract 10 million tourists by 2030. In 2021, tourism contributed to 17.4% of the GDP and employed 7.7% of the workforce, with projections indicating this figure will rise to 8.8% by 2028. Tax incentives, including a 10-year property tax exemption for premier hotel brands and a 6% VAT for five-star hotels/resorts and agro-tourism facilities, are positioned to attract investors (3, 4, 16).

Key bottlenecks introduction
Albania's tourism sector faces significant challenges, including inadequate accommodations, the absence of international hotel brands, limited tourist infrastructure, a short tourist season, informality, ownership issues, insufficient investment, lack of sustainable tourism practices, and restricted local community involvement and training (4, 5).

Industry

Hotels and Lodging

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Ecotourism Including Blue & Cultural Tourism

Business Model

Establish and operate a tourism businesses with a strong focus on sustainable practices, blue tourism activities, and the promotion of the country's rich cultural heritage, encompassing eco-friendly accommodations and aquatic sports enhancements, collaborating with local and international organizations to strengthen the preservation and development of tourism initiatives.

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

< USD 50 million

CAGR
Describes the historical or expected annual growth of revenues in the IOA market.

< 5%

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

1,632 registered hotels as of 2021.

During 2021, international tourists spent approximately USD 2.553 billion (ALL 255.3 billion), which constituted 43.6% of the country's total exports. Meanwhile, domestic visitors contributed around USD 621 million (ALL 62.1 billion).(18) Moreover during the summer of 2022, the country received 6.8 million visitors, with projected earnings of more than USD 3.3 billion (7).

According to an international development cooperation agency engaged in activities in Albania, the market size of the cultural and blue tourism sector in Albania is reported to be less than 50 million USD (24).

The direct contribution of Travel & Tourism to GDP is expected to grow by 4.03% pa. By 2029, the projection is set to reach 3.221 billion USD (320.09 billion ALL), accounting for 9.4% of the GDP (18).

As of 2021, the number of officially registered hotels reached 1,632, marking a 70% increase since 2010. Hotel capacities have also grown significantly, with the average number of rooms per hotel rising from 10-15 in the early 2010s to 25-30 by 2020. The overall bed capacity has almost tripled in this period, reflecting enhancements in hotel facilities over the decade (1).

The hospitality sector saw growth in 2021 with the establishment of 1,457 accommodation structures. Furthermore, there was a twofold increase in the number of nights tourists spent in these accommodations compared to 2020. On average, stays in such accommodations rose by 7.2% in comparison to the previous year. (18)

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

< 5%

ROI
Describes an expected return from the IOA investment over its lifetime.

< 5%

Ecotourism investments can produce returns up to 5% measured in terms of profit, IRR and ROI, according to a key development partner providing project financing to tourism projects (24).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Short Term (0–5 years)

According to a key development partner providing project financing to tourism projects, the estimated payback period for investments in tourism in Albania, aimed at generating returns, is less than 5 years (24).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

< USD 500,000

Market Risks & Scale Obstacles

Capital - Requires Subsidy

Lack of affordable finance, limited government resources, and difficulties in attracting foreign investment hinders Albania's tourism growth, while banks remain hesitant to fund tourism entities, particularly to SMEs who lack the knowledge to appeal to investors (13).

Market - Highly Regulated

Albania's Tourism Law requires improvements in comprehensively defining types of tourist lodging, setting licensing frameworks, expanding taxation beyond the capital and directing revenues towards sustainable infrastructure and conservation. The law partially aligns with European standards on tour operator consumer protection yet remains behind in essential elements, such as mandatory insurance (13).

Capital - Limited Investor Interest

Limited infrastructure development, including roads, airports, and accommodations, in some regions of Albania may hinder tourist accessibility to cultural heritage sites, affecting the attractiveness of investments.

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Albania's tourism sector grapples with challenges related to standards, service quality, and sustainable tourism development, including problems of insufficient infrastructure, seasonal workforce migration, and a shortage of qualified personnel. Additionally, waste management problems, particularly in coastal regions, result in water resource pollution, adversely affecting diving and bathing sites, thereby hindering the expansion of blue tourism (3, 13, 30, 34).

Limited diversity in tourism offers, primarily focused on coastal attractions, restricts potential growth in overnight stays and spending, and hinders balanced territorial distribution. The sector also faces lack of qualified personnel where skills building is reliant on on-the-job training further exacerbated by outmigration (3, 7).

Albania seeks to boost macroeconomic resilience through tourism diversification, shifting from beach destinations to new attractions to infrastructure issues, spread tourism benefits, and attract a broader international audience. However, despite abundant heritage, blue and cultural tourism sectors remain underdeveloped further constrained by challenges related to digital payment systems and infrastructure (13, 4, 29).

Gender & Marginalisation

Tourism, as a service-oriented industry, offers a wide range of professional opportunities for women, from low to high-skilled professions, yet, women often undertake managerial roles, while ownership and decision-making is often held by male counterparts (6).

Women are mainly concentrated in informal sectors like agriculture, tourism, and textiles, where labor protections and formal data gathering are limited, excluding women from social protection measures (33).

While the National Sustainable Tourism Strategy 2019–2023 sets the direction for Albania's tourism and eco-tourism growth, it fails to recognize the substantial contributions of women in the tourism sector and the potential benefits of promoting their active participation in the industry (33).

Expected Development Outcome

Investments in ecotourism establishments will lead to improved standards, services and infrastructure revitalizing business and tourism growth, while efficient waste management especially in coastal areas will prevent pollution enhancing blue tourism opportunities (7).

Diversified tourism offerings, through the development of ecological and cultural tourism and associated infrastructure, will promote longer stays, increase tourist spending, and ensure a balanced territorial distribution.

Developing niche tourism offerings through investments in ecotourism and the associated skills will help reduce reliance on on-the-job training and tap into a more skilful workforce, whilst reducing out-migration through enhanced livelihood opportunities across various geographies.

Gender & Marginalisation

Ecotourism investments that mainstream gender equality can lead to enhanced tourism growth in Albania, tapping into the significant potential of women's contributions and ensuring a more inclusive development.

Shifting away from the traditional sun and sea model through eco-tourism activities will help develop regions beyond the coast tapping into the diverse landscape of the country including mountains, forests, and lakes, namely in the northern hinterland (46).

Primary SDGs addressed

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.9.1 Tourism direct GDP as a proportion of total GDP and in growth rate

Current Value

In 2021, tourism drove 17.4% of GDP. (3) The direct contribution of Travel & Tourism to GDP is expected to grow by 4.03% per year (18).

Target Value

The National Strategy for Sustainable Tourism Development anticipates that by 2028, the tourism sector, with its growing contribution, could constitute up to 9.3% of the GDP (4).

Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

12.2.2 Domestic material consumption

Current Value

In 2019, the domestic material consumption in Albania amounted to 31.6 million tonnes, which included approximately 1.436 million tonnes of fossil fuels (35).

Target Value

N/A

Life Below Water (SDG 14)
14 - Life Below Water

14.1.1 (a) Index of coastal eutrophication; and (b) plastic debris density

14.5.1 Coverage of protected areas in relation to marine areas

Current Value

Beach litter per square kilometre measured at 1284796.5739 in 2018 (35).

Average proportion of Marine Key Biodiversity Areas (KBAs) covered by protected areas, 67.3% in 2022 (35).

Target Value

N/A

N/A

Secondary SDGs addressed

15 - Life on Land
10 - Reduced Inequalities
11 - Sustainable Cities and Communities

Directly impacted stakeholders

People

Communities residing in regions rich in cultural and natural attractions have the chance to secure employment opportunities, benefitting both the local population and those indirectly connected to the tourism sector.

Gender inequality and/or marginalization

Rural communities and women will see improved livelihoods and infrastructure due to increased cultural and eco-tourism activities.

Planet

The natural parks and heritage sites in Albania will experience improvements in conservation practices and reduced negative environmental impacts from the tourism sector, especially as sustainable tourism activities are promoted.

Corporates

Tourism-related businesses, from hotels to SMEs, will expand their operations, particularly in non-capital areas, thanks to tourism sub-sector growth.

Public sector

Albanian Government has set ambitious goals to make tourism a substantial contributor, targeting 24% of total output amounting to USD 5.5 billion by 2030, and anticipating a growth in tourism investments to 8.2% by 2028 (3, 4).

Indirectly impacted stakeholders

People

Other community members residing in regions with cultural and natural attractions might indirectly benefit from the economic opportunities generated by tourism, visitors enjoy diversified range of touristic offerings.

Gender inequality and/or marginalization

Tourism can highlight women and marginalized roles, offering a platform for crafts and traditions, promoting empowerment and cultural acknowledgment.

Planet

Areas beyond main attractions also gain from sustainable tourism. Conservation efforts might expand, with tourists exploring lesser-known spots, emphasizing broader environmental commitment.

Corporates

Industries and businesses outside of the tourism sector, such as suppliers and service providers, may indirectly witness increased demand for their products and services as tourism-related businesses expand.

Public sector

Local administrations may benefit from increased tax income and enhanced political leverage, which can have an impact on nationwide tourism strategies. Their stature within the region might boost their say in decisions.

Outcome Risks

Under the Business As Usual (BAU) forecast up to 2050, the growth of the tourism sector is predicted to increase energy consumption by 154%, elevate greenhouse gas emissions by 131%, amplify water usage by 152%, and boost solid waste production by a staggering 251% (31).

Tourist destinations often face multiple environmental challenges, including air and noise pollution, waste generation, sewage issues, and increased car usage. Overcrowded and poorly managed tourism can lead to the depletion of natural resources, decreased service quality, and a significant rise in waste and pollution (32).

Excessive tourism can lead to detrimental environmental impacts like soil degradation, excessive resource use, and amplified waste. It poses risks to biodiversity, disrupts socio-cultural ecosystems, and threatens the untouched beauty of terrestrial and aquatic environments (32).

Gender inequality and/or marginalization risk: Tourism development may commodify local cultures and lead to displacement, particularly affecting indigenous populations. Over tourism can elevate living costs, limit economic prospects, and misuse public areas, deteriorating residents' quality of life, with women and marginalized groups being most vulnerable (26).

Impact Risks

Albanian tourist destinations encounter infrastructure challenges, including connectivity and parking shortages. The underutilization of digital technology and a lack of structured management and public-private cooperation hinder market exploration and service innovation in the tourism sector (3, 4, 28).

There's a significant risk associated with the lack of standardization in the classification system for tourism services; without it, service quality and reliability may be compromised, potentially diminishing tourist satisfaction and trust (30).

Albania's tourism sector faces risks due to inadequate data collection and analysis that falls short of EU standards, hampering strategic planning and intended impact. Lack of a coordinated regional destination-marketing network restricts access to essential information for prospective tourists (13).

Gender inequality and/or marginalization risk: The tourism sector faces gender disparities, with a significant number of women employed in informal, low-skilled roles, limiting the positive of sustainable investments for informal workers and women (8).

Impact Classification

C—Contribute to Solutions

What

Investments in sustainable blue and eco-tourism will broaden offerings across different regions of Albania, foster sustainability, enhance contribution to GDP and promote responsible practices benefiting both tourists and the planet.

Risk

Underinvestment, infrastructure challenges, lack of standardization, data limitations, and gender disparities pose risks in Albania's eco-tourism sector, potentially impacting growth and sustainability.

Contribution

Diversifying and developing the tourism sector in Albania enhances resilience and appeals to a broader international audience, fostering sustainable growth.

Impact Thesis

Safeguard national heritage and improves visitor experience, thereby generating higher tourism yield and repeated guest rates while enhancing employments for the locals.

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

National Strategy for Development and European Integration 2022-2030: sets the goal of attracting 10 million tourists by 2030, intending to make tourism a key driver of sustainable economic development, accounting for around 24% of total gross output, equivalent to USD 5.5 billion, including through the establishment of ecotourism packages (3).

The National Strategy for Sustainable Tourism Development 2019-2023: envisions Albania as a prominent global tourism destination, with a strategic focus on various subsectors, including coastal, maritime, mountain tourism, ecotourism, and cultural tourism. By 2028, it aims for significant growth in employment (8.8%) and investments (8.2%) within the tourism sector (4).

The 2021-2025 Government plan for Albania is centered around modernizing the productive economy, tourism, energy, agriculture, digital economy, transport, and services. The objective is to position Albania as the top choice for tourists in the region and a significant European destination by combining beach tourism, sea and sailing experiences, mountain and nature ecotourism, agritourism, cultural heritage, and a rich culinary tradition (2).

Financial Environment

Financial incentives: The government promotes investment in tourist resorts by providing state-owned land under the "Albania 1 Euro scheme" for a tenure of 99 years to prospective investors (18).

Fiscal incentives: 4-5 star accommodations with internationally recognized trademarks receive a 10-year corporate tax break, starting within 3 years of achieving special status. Services in Five star hotels/resorts with this status benefit from a 6% VAT reduction. Infrastructure impact tax exemptions apply to new Five star constructions and investments in cultural sites with protective status (18).

Other Incentives: In 2018, Albania's Ministry of Culture launched a USD 213,260 project focusing on community-based inventories of intangible cultural heritage. The EU and the United Nations Office for Project Services joined forces on the USD 40 million EU4Culture initiative to restore 20 cultural venues impacted by the 2019 earthquake and improve tourism amenities. Furthermore, under the EU-funded DestiMED Plus project, Albanian Trip devised a specific ecotourism itinerary (41, 42, 48).

Regulatory Environment

Law no. 93/2015 on Tourism, 2015: aims to promote Albania as an attractive tourism destination, encompassing support for the development of a sustainable tourism sector and the assurance that service providers effectively meet the needs of tourists, and establishes rules pertaining to financial support for investors, criteria for the operation of tourism-related activities, and other essential guidelines (38).

Law no. 55/2015 on Strategic Investments, 2016: aims to increase Albanian and foreign strategic investments in the sectors of the economy considered as strategic sectors, through the establishment of special favourable administrative procedures, mitigating support services to the investors (39).

Law no. 43/2020, on Maritime Tourism Activities, 2020: aims to regulate maritime tourism in Albania and defines rules, conditions, and criteria for vessels used for tourism and entertainment, along with necessary infrastructure applying to both local and foreign individuals (40).

Law No. 125/2013 on Concessions and Public Private Partnership, 2013: establishes a framework to boost investments via public-private collaborations covering sectors like transport, energy, waste management, telecommunications, education and notably tourism, leisure, and hospitality sector to attract investments (43, 44).

Marketplace Participants

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Private Sector

Saranda Diving Center, Meliá Dürres, Harmonia Hotels Group, Best Western Premier Ark Hotel, Ecotour Albania, Albanian Trip, The Adriatik Hotel.

Government

Ministry of Tourism and Environment, Ministry of Culture, State Agency for Strategic Programming and Aid Coordination, Ministry of Economy, Culture, and Innovation, Ministry of Infrastructure and Energy, Albanian Investment Development Agency, Albania Investment Council.

Multilaterals

European Bank for Reconstruction and Development (EBRD), European Union, United Nations Development Programme (UNDP), UN Women, European Investment Bank, World Bank Group, United Nations Educational, Scientific and Cultural Organization (UNESCO).

Non-Profit

Foreign Investors Association of Albania (FIAA), The Visit Gjirokastra Association (VGA), Risi Albania, Albanian Tourism Association (ATA), Albanian Tourism Union, Albanian Tour Operators Association.

Public-Private Partnership

Albanian Adventure Resort, represents a pioneering endeavour in the adventure tourism sector and operates under a public-private partnership (PPP) between the Albanian Rafting Federation and the Ministry of Education and Sports (19).

Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
rural

Albania: Vlorë

Vlora, located in southern Albania, is adjacent to the Nartes Lagoon and the Karaburun Peninsula, and near Sazan Island, the city has seen a surge in tourism, particularly ecotourism, emphasizing its unique biodiversity and cultural heritage, including beaches, castles, religious edifices, museums, and historical sites. The region is among the main destinations for cultural tourism and is among the key tourism development clusters of the National Tourism Strategy (4, 45).
semi-urban

Albania: Durrës

Durrës, housing 289,797 residents and accounting for 10.5% of Albania's population, is a significant coastal city and a crucial port in the Balkans. With a history spanning 3,000 years, the city is renowned for its pristine beaches and a welcoming Mediterranean climate. Durrës offers 10% of Albania's hotels listed on Booking.com and features monumental sites like the Balkans' second-largest amphitheatre and the medieval Durrës Castle (1, 53, 50).
rural

Albania: Berat

Located in central Albania, Berat is renowned for its historic center, a UNESCO World Heritage Site that showcases centuries of religious and cultural endowments. The city is anchored by the Kala, a castle primarily from the 13th century with origins in the 4th century BC. Berat houses numerous Byzantine churches from the 13th century and mosques from the Ottoman era, and is among the main regions visited by organized cultural tours (4, 49).
rural

Albania: Shkodër

The region is known as the traditional capital of northern Albania, houses the mountainous national parks part of the Albanian Alps, and is among the key tourism development clusters set by the National Tourism Strategy. The city’s main tourist destination is Rozafa Castle, a thousand-year-old monument erected on a rocky hill at the entrance to the city of Shkodra, surrounded by the Buna and Drin rivers, with additional natural monuments including the Theth Falls, Lake Jezerce and 13 peaks of the Alps of Albania (4, 51).
rural

Albania: Kukës

Also part of the Albanian Alps, the region hosts multiple national parks and heritage centers including Tropoja town, Kukesi city, and District of Has. The development of mountain tourism in the region is among the local government's key goals for regional development, and the county is part of the National Tourism Strategy's tourism development clusters (4, 52).

References

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