Beton's Pyramid Scheme: As in “burging” Albania Savings in Low-Const Tourism

It says: Adri Nurellari

Albania's Tax Administration just gave us, unwittingly, the most clear testimony that Albanian tourism is more of a propagandistic balloon than a gold mine, just as it is being taxed. Announcing that there is access to Booking data to threaten owners who have issued property for tourist rent; taxes revealed a mathematical reality that hurts. In fact, this announcement has been accompanied by an infographic show that 17225 properties have had rounds of 80,122,524 with bookings in 9 months, of which 12,858,004 have gone to committees for the Booking platform.

Ironically, then, this announcement of Albania's General Taxation Directorate, more than a denouncing the tax evasion of those who rent short-term tourist contracts, is involuntarily translated into a denouncing of government propaganda for a “tourist boom”. Thanks to the government and media influenced by the main builders in the country, a strong belief has been established in Albania that Albanian tourism has become goose with golden eggs. This myth has “infected” and our countrymen from Kosovo, who, according to Pristina banking data, have received over half a billion euros in loans in recent years only to buy property in Albania. But when we look at the real mathematics of this market, we clearly diagnose a flusque because we have many scattered capital symptoms, many similar offers, and a productivity that decreases as much as competition increases.

So let's make a simple account of the exposed data. In the 9 months of last year, 80.1m euros in reservations have been realised, of which about 12.86m euros -- approximately 16% -- have gone directly to platform commissions. Thus, real income for owners falls to about 67.26m euros. If we lift a minimum operating cost of around 20% (cleaning, washing clothes; maintenance, energy, water, basic amortisation), then effective revenues drop to about 51.24 million. In the best case, it's roughly 68.32 million annually, even though it's known that the remaining three months of the year are on average worse for tourism than the January-September average.

This is the figure to be estimated, which is divided among about 17,225 properties, results in an average property generating about 3966 euros per year's net operating net. Given that property is mainly in Tirana and the coast, an average conservative value of around 120,000 euros per entity is the least that can be taken as an example for our analysis. This translates into a real return of about 3.3% a year, in terms of tax evasion, and this in a good tourist year. If 15% profit tax is applied, then the return falls to about 2.8%.

So, after all of the “boom”, the result is an productivity that's barely competing inflation and going is how much treasury bonds are in zero risk and out of work. When we consider the Bank of Albania's recent auctions, we see that 7-year bonds yield up to 4.7% annual return. So, the state pays more for its debt than wins an investor from its property used for tourism.

Meanwhile, in all this analysis, only one actor comes out clear winner and he doesn't speak Albanian. It's about the online booking platform.com mediating reservations gets about 16% of total income (all this without investing in property, without cost of maintenance and without facing the risk of seasonal gaps. Otherwise, the only one who has Iverdi is the middleman who earns more, more safely and without investing anything out of his pocket.

This simple estimate highlights the essence of illusion. We look at low-comst tourists and assume profit; we see volume, so we assume prosperity and make new investments in real estate. Just these “el levels of Albanian tourism” have erupted the offer on the market, bringing construction to peak size in Albania. Recently, it has been reported for about 1.9 million m2 new permits and about 14.5% of gross domestic output (taking the largest weight in Europe in proportion to the economy while the EU average is 5.5% GDP.

On the other hand, increased demand is by no means going with the same step. Of the some 7.5 million visitors we had in 2022 we went to 10.1 million in 2023 (+35%), to 11.7 million in 2024 (+15%) and about 12 million in 2025 (+223%). In short, tourism in Albania continues to grow, but at a rate that is slowing significantly, signalling the shift towards market maturity.

Agreeing; for accuracy, this writing serves as a rough model that gives a general picture rather than a “lathe pharmacy for each apartment, as complete data on annual exploitation (occupancy) and the average daily (ADR). We're just talking about Booking (which plays the lion's booking; even if we add the reservations to Airb, offline or through agencies, the panorama doesn't change much, because the profit still remains low. If a bank loan for real estate in Albania or Kosovo fluctuates at 5507%, any productivity below 8% fails to justify the risk undertaken, turning investment from an active producer into a financial burden. So if you don't pass this percentage, which in finance is called the minimum acceptable return rate, you're actually paying the bank more than you're paying for. I'm practically losing money every month, hoping only for future property value (capital application), which is gambling, not business.

On the surface, Albania is experiencing a collective drunkenness from Rina's chaotic figures that prevails “as a granite rock in the Adriatic” and government statistics cooked according to the mood for electoral consumption. In reality, however, the latest tax figures pierce the huge toll of tourist success, showing that we are not dealing with the low-bulled “industria, but with the reconstruction of the coast and our cities in huge dormitories. There is no doubt that if your profit after all that investment in expensive properties and the ability to expect tourists is lower than the interest of a state title (where the risk is zero and work consists of only one signature) then you're not doing business but funding an illusion.

Therefore, once the light of propaganda producers is turned off, there remains an unpleasant truth that suggests that Albanian tourism is turning into a modern-day pyramid <x0) scheme of” with jobs; hopes, noises, commissions and operational costs, but with a real gain that is a mockery of investors and mines for the country's economic future.