Albanian government relaxes policies for 4- and 5-star hotels

Sheraton Tirana Hotel, Albania, Europe

Albania's government is forgoing strict regulations on its upscale and luxury hotels. The Council of Ministers told XinhuaNet the country passed a new tourism policy relaxing the criteria four- and five-star hotels must meet to gain a special status.

The draft law now states four-star hotels with an 8 million-euro minimum investment and five-star hotels with a 15 million-euro minimum investment will receive tax cuts on those investments. These five-star properties also aren't required to pay infrastructure taxes. Meanwhile, special status hotels will also benefit from 10-year tax exemptions. When the new hotel tax initiative was launched a few weeks ago, Edi Rama, the PM of Albania, told reporters that "every accommodation facility that obtains a five-star rating from the 30 international luxury brands will not pay taxes for 10 years."

According to the PM, the new government has become laser-focused on enhancing the Albanian tourism industry's service quality, including that of four-star hotels. The five-star sector will also receive this huge boost in support, especially since the country has only one or two five-star hotels in the capital city of Tirana. However, Rama warned operators would face stricter regulations if they violate market rules or fail to meet hygiene or service policies.  

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This new initiative falls in line with the current tourism boom in the country this year. The industry has rapidly gained momentum as Albania has been focused on formalizing the market, codifying hotel ratings and seeking out foreign investment in hotel development. “The increase in income from tourism makes us believe that Albania is becoming a competitive country for tourism in the region,” a source from Albania’s Ministry of Economy and Tourism told BIRN in April 2017.

According to a report from Albania’s Central Bank, the country saw its best performance so far in 2016, garnering 1.5 billion euros from tourism in that year. That was an increase of 13 percent from 2015 at about 1.35 billion euros.  

However, further foreign investment is necessary as the current guestroom stock in Albania remains low. "We still have [only] 67,000 beds, which is low compared with the growing influx [of visitors]," Zak Topuzi, chairman of the Albanian Tourism Association’s hotel department, told Monitor. "There is a total lack of investment in tourist resorts and few accommodation structures offer top standards.”

Experts from the industry also stress Albania can only sustain this growing success if the country attracts tourists throughout the year, instead of just in the summer months.