Albania Ranked #90 in World Economic Forum Study on Tourism Competitiveness
Lawrence Pratt[1]
Last week the World Economic Forum (WEF, at a leading international convening forum for business, government and civil society leaders launched its first ever Travel & Tourism Competitiveness Report 2007. This report parallels and complements WEF studies assessing and ranking the competitiveness of countries.
Albania is to be congratulated. The country ranked #90 out of 124 countries from around the globe, ranking ahead of countries with long established and successful tourism sectors, such as Kenya, Ecuador and Nepal. This study, and the accompanying rankings, are not a “beauty contest” – it is a detailed examination of the underlying factors that are likely to determine Albania’s ability to compete successfully in international markets.
More important than the ranking itself is the objective (though far from perfect) analysis of the countries strengths and weaknesses in a number of dimensions – ranging from the countries’ natural and cultural asset base, to the sophistication of its sector and human resources, and perhaps most importantly, the role of institutions in building and supporting a successful tourism sector for the long term.
The ranking indicates that Albania has excellent growth potential in tourism, and that its potential can be realized through concrete action by policy makers and the collective efforts of the private, civil and governmental sector. However, it also points to very troubling weakness that could limit severely Albania’s competitiveness if not addressed in a coherent manner across sectors and Ministerial portfolios.
Strategic Orientation
The WEF rankings place a very strong emphasis on the natural and cultural environment. This is a direct reflection of trends in tourist preferences (particularly high-spending educated tourists) for destinations that are interesting, attractive, and clean. The countries that ranked highest (Switzerland, Austria and Germany, ) were noted for not only their beautiful attractions, but also their stringent environmental regulations that protect that beauty. This emphasis strongly validates Albanian government decisions to focus on nature and culture tourism across the country. Albania ranked 43rd in the world in its “Natural, Cultural and Human Resources.” However, it ranked very low on environmental protection and inclusion of its natural and cultural resource base in its tourism sector. indicating that more work must be done across Ministries to support tourism competitiveness.
Strengths and Weaknesses
Perhaps the most positive result from this study shows that Albania is already very strong in areas that are very difficult (or require a long time) to change, while most of its weaknesses are in areas that can be improved quickly through political will and concrete action.
The study confirms that Albania is a welcoming country. Travel restrictions are non-existent (tied for 1st), and the country ranked 4th in “tourism openness” a measure of citizen, government, and private sector openness to foreign visitors.
Albania is a healthy country for its tourism workers and visitors -- it scored well on malaria (tied for 1st), HIV incidence (25th) and tuberculosis (38), potable water and sanitation (42 and 49), and overall health and hygiene (58).
Albania’s labor markets are competitive. The country ranked very high in human resource issues -- 35th in the world. It tied for 1st in primary school enrollment and did well in ease of hiring foreign labor (8th), and ability to hire/fire workers (18th). In contrast however, the investment climate is seen as difficult.
A number of weaknesses are pointed out in the study; several are particularly notable. Property rights (116th), and infrastructure (particularly airport, roads, and internet, all greater than 110th) are well-known issues, understood to be long-term, and which the country is addressing through many efforts. They will improve over time with continued national efforts.
Of greater policy interest, the country could improve its competitiveness (and its rankings) by addressing a number of issues that appear to be within direct control of policy-makers.
Investment climate: Rules regarding foreign ownership (113th) and direct investment (110th) are seen as obstacles. While the government is engaged in significant recent efforts, tourism investment has a number of complexities that require special attention.
Tourism image: Albania has not been effective in promoting itself. Effectiveness of marketing and branding was ranked 120th. Few business travelers wish to stay longer (87th), an important indicator of how well the country is selling itself to visitors already in the country. Of greatest concern, however, is that tourism is perceived to be a very low government priority (107th), and within tourism planning the country is underemphasizing the market importance of its natural and cultural assets (116th in its emphasis on “sustainable” tourism).
Natural resource management: The country’s weak system for solid waste management, control of deforestation and land use, coupled with its limited designation of protected areas (87th), and unstable (113th) and non-stringent (124th) regulatory system make this area the country’s “Achilles Heel” for tourism and perhaps other critical economic sectors.
Analysis
Albania has ranked well in tourism competitiveness because the country is interesting and beautiful, and its people kind, educated and welcoming. The country has also made important strides in peace, stability, safety, infrastructure and entrepreneurship.
However, if the country is to succeed in harnessing its tourism potential, it must address its policy weaknesses. Determined political will and concrete actions will make Albania’s tourism sector an important contributor to national development.
Three areas emerge as priorities:
Political coherence. Tourism is of vital national economic interest. According to a recent publication by the National Bank of Albania , travel and tourism may represent more than 10% of GDP, and perhaps more than 60% of services trade. The country scored 107th in the ranking in government “Prioritization of Travel and Tourism.” Although the current government has paid significant attention to tourism, its current importance and future potential are in stark contrast to the minimal human, budget and political resources assigned to the Ministry of Tourism, Culture, Youth and Sports, and to complementary programs in other Ministries.
Strategy Coherence. Albania is a cultural and natural destination. The markets are clearly telling Albania that its correct strategic position in international markets is a strong emphasis on its outstanding nature and culture, avoiding mass tourism and direct competition with Greece, Turkey, Croatia, and other “discount” or “bargain” destinations. The government’s strategies, which focus on nature and culture, offer Albania its best chance for success. However, the virtual lack of regulatory or other systems for managing forests, parks, coastal and cultural resources, solid waste and water pollution severely limit Albania’s potential to develop a tourism sector capable of raising Albanians out of poverty.
Coherence of Attitude. The wonderful and welcoming attitude of the Albanian people and their pride in, and love for, their country are Albania’s most important assets. However, in business and policy there is a big gap. For example, almost no other private sector in the world pays less attention to protecting its natural environment (122nd), and few countries focus less government attention to protecting it. The notable decline of cultural monuments is a concern of most Albanians. Without the love and pride of country extending to business practice and government policy, the country will not advance in tourism, and doors will close in other business areas as well.
All the natural, cultural and human conditions for success in international tourism markets are in place, or within easy reach. The remaining question is whether Albania’s political, business and civil society leaders will rise to meet their part of the challenge.
[1] Professor, INCAEBusinessSchool ( and Senior Tourism Consultant, UNDP-Albania. Mr Pratt has been working on tourism strategy and policy issues in Albania since 2005.