More than financing: Raiffeisen supports Albanian tourism with vision and partnership

In the years following the pandemic, there has been a significant increase in the number of foreign tourists in Albania. How has this increase affected the demand for credit from tourism-related sectors?

The last four years have brought a significant transformation to Albanian tourism. Not only because of the overall global increase in mobility and income after the pandemic, but also because Albania began to appear differently on the map of international tourist destinations. Improving infrastructure, from roads to airports, has been important, while an atmosphere of political and economic stability has created the necessary confidence for long-term investments.

Albania has successfully exploited the momentum of growth in tourism, but as a new player in the regional market, it faces significant challenges. Accommodation capacities still remain limited and fragmented. This is precisely what has pushed many businesses to seek financing to invest in larger hotel structures, modern tourist villas, or even in supporting services such as transportation, restaurants and activities for tourists. As a result, the demand for credit from this segment has increased significantly.

We at Raiffeisen Bank have read this development as a real development opportunity and have been involved as lenders in some of the most ambitious projects currently being built in the country. These initiatives not only increase accommodation capacities, but also improve the quality, standards and experience for tourists. Ultimately, these investments contribute to the return of customers and the sustainable economic development of the country.

What has been your bank's approach to financing tourism-related projects so far? Which activities or project typologies have been the most financed by you?

Raiffeisen Bank's approach has been selective, but always open to new opportunities. We are engaged in a wide range of projects, from high-standard hotels in urban areas and on the coast, to tourist villa complexes targeting domestic and foreign demand. We also support investments in tourism-related services.I would like to emphasize the importance of establishing a balance between potential and caution, offering partnership to investors even in the initial stages of projects, with the belief that early consultancy is as important as financial capital.

The growth of tourism in recent years has been combined in parallel with a new cycle of development of the real estate sector in coastal areas. How do you assess the state of the residential property market on the coast and how willing are you to finance projects of this type?Today, having a second home on the coast is a more accessible option for many Albanians. We have a growing middle class that seeks personalized vacations, alternative investments and a more balanced lifestyle.At the same time, we are noticing an increased interest from foreign buyers, including Albanian citizens of the diaspora who want to have a tangible connection with the country, or even foreign citizens who see in our coast the potential that the rest of the European Mediterranean has but with an authentic Albanian character.

At Raiffeisen Bank we are open to financing projects of this type, but we are always careful in assessing two elements. The first element is legal documentation and property titles, which unfortunately, in some areas still remain problematic, while the second is the feasibility of the project. When these conditions are met, we not only provide financing, but also help the investor structure the project in the most sustainable and efficient way.

How is the qualitative performance of tourism-related lending so far?

The performance of tourism loans has been satisfactory, even better than expected in a sector that until a few years ago was considered unpredictable. This result is the result of two factors: first, the sector is recording a stable and strong growth; second, our care in selecting projects and their continuous monitoring has made them manageable even when there have been difficulties.We are confident that this trend will continue in the coming years, as Albania’s potential to provide service throughout the year remains strong.

The year 2024 brought a high increase in lending to the business sector, including an increasing number of large bank exposures to specific projects or entities. Do you think that the economy's increased dependence on tourism could pose increased risks for the banking sector as well?

Tourism is playing an increasingly important role in the country's economic structure, becoming one of the main engines of development. This is a natural trend in the Mediterranean context, where many countries have built their economies on a well-organized tourism industry, which stimulates employment, entrepreneurship and innovation in several areas. Albania is also following this model, gradually creating an ecosystem of services and investments that turn tourism not only into a source of income, but also a sustainable factor of development.

Of course, tourism also has numerous risks. Excessive dependence on the summer season, a political crisis or a reputational blow due to the quality of service can have chain reactions. But what has changed in Albania is the perception of these risks. Previously, the country was not considered a serious tourist destination; although it had extraordinary natural resources and hospitable people, it lacked infrastructure, stability and vision.

Today, these gaps are being filled rapidly. The next challenge is to offer tourism with content and quality, so that we are not only a beautiful destination, but also a destination that provides guarantees, for the investor and the visitor.In this process, the role of banks is not only to follow the wave of demand, but also to positively influence the sustainable development of the sector.