Albania has an active pipeline of 4,500 hotel bedrooms under construction, said Thomas Emanuel, director, STR, with developments spread across the country, particularly in the capital Tirana, and the coastal areas of Durrës, and Porto Palermo.
Largely inaccessible to foreign tourists up until the early 1990s, communist Albania was isolated not only from the West but also from Eastern Bloc countries. Now, tourist arrivals are forecast to increase 67% by 2030 compared to 2019, according to Tourism Economics.
Hylko Versteeg, head of development southern Europe, IHG Hotels & Resorts, noted Albania’s rapid development: “I go to Albania about every three months and it’s like the country has advanced 12 months. You drive into Tirana and you see new buildings popping up left, right and centre.”
With Tirana airport arrivals tripling in recent years and a second international airport near Vlora due to open in 2025, Albania is poised for significant tourism expansion.
Versteeg hoped that Albania does not follow the example of Spain in the 1970s. He said: “You don’t want to create a Torremolinos or a Benidorm. You want to create something with quality, but there is a market for everybody, from three-star to ultra luxury. There’s a lot of capital, a lot of liquidity coming into Albania.”
Moving on to the more mature and established market of Greece, Ina Plunien, VP, Cedar Capital Partners said the private equity firm, which invests exclusively in the hospitality sector, has a strong appetite for high-end leisure resorts in the country.
Cedar has invested in three properties in Greece: a 200-key resort on Corfu; the Six Senses resort at Porto Heli which has 60 rooms and branded residences; and the One&Only resort on Kéa Island.
“Today, Greece is a market that we feel very confident about when it comes to luxury. Fragmented ownership, smaller owner operators, and the huge growing demand from wealthy travellers make it a perfect storm for us,” Plunien said.
Croatia too boasts a well-developed tourism industry with 100 million overnight stays per year and plenty of opportunities in the premium segment, said Ivana Budin Arhanić, management board member, Valamar Riviera. A leading hospitality operator and asset owner in Croatia, Valamar Riviera has 56,000 bedrooms under ownership and management.
Arhanić said: “We’ve just announced another investment cycle of €450m, which will include a 500-key five-star resort. It’s the largest investment to date by the company so obviously we feel confident about demand for Croatia and the need for a sophisticated resort product.”
Stelios Demetriou, head of strategy and transactions, EY Cyprus Advisory Services, noted that sourcing labour to keep pace with such developments was a key challenge.
“Countries need to tackle demographic issues or even immigration policies to attract the right kind of people. Because in Greece, in Croatia, tourism is most developed in places where you have the least people living and we have to solve this,” added Arhanić
Investing in staff facilities has become paramount. Without it, even the most beautiful resorts risk being inoperable due to staffing shortages.
Plenien explained: “From day one, our investment decisions have included competitive packages that address the questions potential staff will ask: Where will I live? How will I live? How will I get there?”
To attract talent, hotels must offer attractive packages, which inevitably changes the cost structure. However, the reduction in seasonality and the expansion of revenue bases have helped offset these costs. Initiatives like the IHG Academy and IHG University are examples of how global brands are offering training and growth opportunities to build a sustainable talent pool, said Versteeg.
Some countries are turning to legislation. This year, Croatia introduced its Tourism Act that provides a framework for sustainable tourism development. It requires destinations to calculate their ‘carrying capacity’ – the optimal number of tourists based on natural resources, infrastructure, and resident population – to ensure high-quality experiences and the potential for premium pricing.
The goal is to manage destination development in a way that preserves the authenticity and quality of the terrain. Arhanić said: “We must maintain the unique local experiences that make destinations like Greece and Croatia luxury hotspots. It’s about preserving the essence that draws people in— the authenticity that defines us.”
All the above quotes were taken from the IHIF EMEA 2024 panel: Mediterranean Odyssey: Seizing Investment and Development Opportunities in South-East Europe
