Albania Woos Luxury Hotel Brands with Tax Breaks

Albania is planning to try to lure five-star hotel brands with tax breaks, including scrapping profit and property taxes, to increase its appeal for the higher-end of the tourist trade.

With travel and tourism accounting for 8.4 percent of gross domestic product in 2016, rising demand to visit the country between Montenegro and Greece washed by the Adriatic and Ionian Seas is not being met by present facilities and infrastructure.

One of Europe’s poorest but also most unspoiled countries, Albania has been wooing tourists by encouraging them to “Go Your Own Way,” counting on the appeal of adventure tourism.

Now, to lure international hotel brands, the government is to pass a law this month to exempt them from profit tax for 10 years, scrap infrastructure tax and property taxes, and have them pay a VAT tax of 6 percent for any service on their hotels or resorts.

International hotel chains or anyone possessing a franchise from them is welcome provided they invest no less than eight million euros for a four-star hotel and no less than 15 million euros for a five-star hotel, said Elton Orozi, an official at the tourism ministry.

“Albania is trying to offer more to tourists who spend more time and money so as to get acquainted with the culture, history and nature,” added Orozi.

The incentives will apply to developers only if they do not sell on the units since the government wants to avoid villas being built on the seashore by wealthy Albanians using them as second homes.

Building luxury hotels will also depend on whether the investors steer clear of land ownership troubles, which doomed an effort to lure the French Club Med holiday company to Albania more than a decade ago.
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