Tourism Strategy Albania 2012-2017 A Proposal Building on Albania‟s Efforts to Create

a Sustainable Travel and Tourism Industry

STRATEGY CHALLENGE MANAGEMENT REPORT

Albania

Group 27

May 31st, 2012

HONOUR CODE

As a student at the Ecole hôtelière de Lausanne, I uphold and defend academic integrity, academic rigor and academic liberty as core values of higher learning. I attest, on my word of honour, that work submitted in my name is my own work, and that any ideas or materials used in support of this work which are not originally my own are cited and referenced accordingly. Martin Chanel 403615626 . . Jael Fischer 567847446 . . Tatiana Halimi 567833929 . . Fatine Rahhou 571239389 . . Christopher Reinhard 567837055 . . Stéphanie Vonlanthen 870852318 . .

TABLE OF CONTENTS

Strategy ........................................................................................................................................... 1

Rationale ......................................................................................................................................... 1

Key Target Market .......................................................................................................................... 2

Albania‟s Positioning through Differentiation................................................................................ 2

Project Description & Objectives ................................................................................................... 3

Project Development ....................................................................................................................... 4

Project Organization and Stakeholders ....................................................................................... 4

Project Life Cycle and Timeframe .............................................................................................. 5

Pilot Test & Appraisal ............................................................................................................ 5

Implementation & Marketing ................................................................................................. 5

Project Financial Sustainability .................................................................................................. 6

Forecasted Impacts of the Project ................................................................................................... 7

Conclusion ...................................................................................................................................... 7

List of References ........................................................................................................................... 8

Bibliography ................................................................................................................................... 9

Annexes......................................................................................................................................... 12

Annex 1 – The Albanian „Experience Travel‟ Market Tourism Offer ..................................... 12

Annex 2 – Target Market Segmentation: the „Experience Travel‟ Market .............................. 13

Annex 3 – Stakeholders & Stakeholder Management .............................................................. 14

Annex 4 – Evaluation Criteria of the New Program ................................................................. 15

Annex 5 – Timeframe of Proposal ............................................................................................ 16

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Strategy Challenge Management Report | Strategy 1

STRATEGY

A quality travel and tourism (T&T) provider certification program to encourage the development

of and aid in the promotion of rural Albania as an attractive destination for the ‘experience

travel market’ (adventure, nature, and cultural tourism).

This project will contribute to the further development of Albania‟s current strategic destination

plan and policies. It aims at encouraging the development of T&T products and services based on

criteria of the Global Sustainable Tourism Council (GSTC), coalition between 27 organizations,

including tourism leaders from around the globe, introduced in 2008. The framework aims at

improving the quality of T&T products and services on offer, focusing on the conservation of the

cultural, historic, and natural attributes of the country while ensuring socioeconomic benefits for

its residents. This will allow certified T&T providers to differentiate themselves and guarantee

GSTC quality-based standards. In order to create significant international awareness about this

program, this project equally includes a focused marketing communication plan.

RATIONALE

The Strategy is in answer to an analysis of the current and forecasted evolution of the Albanian

T&T Industry and takes into account global trends. Research showed there is a:

lack of a T&T offer complying to internationally recognized quality standards

(Euromonitor, 2012);

growing demand of the international „experience travel market‟ for which Albania‟s offer

(pristine and undiscovered natural, cultural, and historical assets) is particularly suited

(refer to Annex 1 for a visualization of how the offer matches the target market);

lack of positioning in the global market;

need for countries to develop in a sustainable way in order foster long-term socioeconomic

growth.

In addition, the Strategy was created in line with the objectives of the United Nations World

Tourism Organization (UNWTO) Silk Road Initiative (SRI), as well as Albania‟s current focus

on three UN Millennium Development Goals (MDGs), poverty reduction, gender equality, and

environmental sustainability. Albania‟s limited resources available for the development of the

T&T Industry have equally been taken into account.

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Strategy Challenge Management Report | Key Target Market 2

KEY TARGET MARKET

There is an increasing trend in people looking for unique and personalized experiences, which

according to Deloitte (2009) shows a shift from „escapism‟ to „enrichment‟. This growing market

has been identified as the experience travel market, consisting of three niche segments:

adventure, cultural, and nature-based tourism (including ecotourism), which are all sustainable

forms of responsible tourism (Hassan, 2012). Despite differences, these three segments desire

similar T&T offers when they visit a destination and frequently overlap (Tourism New South

Wales, n.d.). This is confirmed by the Adventure Travel Trade Association (2010) that defines

adventure travel as “any domestic or international trip that includes at least two of the following

three aspects: physical activity, interaction with nature, and cultural learning or exchange”. This

is why these three segments are classified together under „experience travel‟.

The adventure travel market alone accounted for approximately 27% of global trips between

2007 and 2010 (George Washington University School of Business, ATTA, & Xola Consulting,

2010) and is forecasted to grow by 10% annually over the next ten years (Deloitte, 2009). Further

research1 highlights the key characteristics of the „experience travel‟ market as:

looking for an authentic atmosphere and seeking to learn something new;

having a long average length of stay, which is forecasted to increase;

willing to spend a considerable amount on these trips;

mostly finding their information on the Internet: many search for the destination on

Google; more than 30% look at the destination‟s website; about 20% use social media;

usually visiting a destination with no or few bookings and very few opt for a package;

tending to travel independently (not part of an organized tour).

Refer to Annex 2 for further details.

ALBANIA’S POSITIONING THROUGH DIFFERENTIATION

From an international perspective, Albania is at its early „discovery stage‟ as a destination and

remains little known. This is seen as an opportunity for the government to decide how Albania‟s

T&T offer should be positioned, against which destinations it should compete, and take action to

differentiate itself. This Strategy will attract niche markets to Albania, thereby differentiating its 1 ATLAS, 2007; George Washington University School of Business et al., 2010; Partners in Tourism: Culture and Commerce, 2011; UNWTO, n.d.; WTO, 2000.

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Strategy Challenge Management Report | Project Description & Objectives 3

T&T Industry from its neighbouring countries (Croatia, Montenegro, Greece, Turkey, and

Bulgaria), which are more mature destinations mainly attracting mass „sun and beach tourism‟

(refer to Figure 1) (Ministry of Territory Adjustment and Tourism, 2003). In light of this, and

considering the target market for this Strategy, direct competitors have been identified as being:

Thailand, New Zealand, Costa Rica, Patagonia, Uganda, and Australia. These have differentiated

themselves through their sustainable offer and international awareness (refer to Figure 2). Many

of these countries have reached maturity, whereas Albania has the opportunity to position itself as

a destination that offers something new and little known, which is important to this target market.

Figure 1: Positioning Map: Figure 2: Positioning Map: Albania & its Neighbours Albania & its Competitors

PROJECT DESCRIPTION & OBJECTIVES

In 2010, in partnership with the Albanian Tourism Association (ATA), USAID‟s Rritje Albania

(„Grow Albania‟) project launched Albania‟s first quality certification system for tourism

accommodation: the Authentic Albania Quality Mark. Since its launch, the program has

successfully evaluated 40 hotels based on international hospitality standards and GSTC criteria.

Having been developed in response to one of Albania‟s most recognized weaknesses (quality and

rating of lodging facilities), this program has true potential of creating value for its T&T Industry.

Research shows that accommodation supply is merely a prerequisite for travellers (Reisinger,

Mavondo, & Crotts, 2009). Instead, the availability and attractiveness of activities is a driving

factor to attract visitation. Taking this into consideration, it is suggested that the program‟s

certification be extended to: local tour operators, food and beverage outlets, and activity

providers (such as wineries, arts and crafts production sites, and plantations). The aim of this

UNSUSTAINABLE SUSTAINABLE

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Strategy Challenge Management Report | Project Development 4

expansion is to further develop the current program in order to increase the attractiveness of

Albania‟s T&T product and service offer for the selected target market and as a result, draw

visitation to Albania. This extended version of the program is henceforth referred to as ‘New

Program’.

Secondly, seeing that USAID will end its support of the Authentic Albania Quality Mark program

in 2013, a reinforcement of Authentic Albania is seen as crucial in order for it to be sustainable

over time. The key weakness of this program has been identified as being the effectiveness of its

communication strategy, demonstrated by the limited amount of information available online,

and its complete lack of presence on official T&T websites.

The New Program needs to be successfully marketed to the international community and enable

certified T&T providers to use it as a marketing tool. In order to reach these goals, the Strategy:

1. includes recommendations as to how the New Program‟s Internet presence can be

developed in order to attract potential customers to whom Albania is unknown;

2. suggests the implementation of an online trip planning platform uniting all Authentic

Albania certified T&T providers in order to reach customers already demonstrating an

interest in visiting Albania.

PROJECT DEVELOPMENT

PROJECT ORGANIZATION AND STAKEHOLDERS

In order for the New Program to be valued, it will be developed in collaboration with all sectors

involved (educational, public, and private) and bring together all major stakeholders in order to

receive their commitment to the New Program through ownership, meaning each stakeholder

knows what tasks they are responsible for.

As very little information on the current organization of the New Program is available, potential

partners have been identified. The official entity in charge of the New Program and responsible

for its implementation will be the Ministry of Tourism of Albania. However, its development will

include the educational, private, and public sectors, potentially represented by the University of

Tirana (UT), Albanian Tourism Association (ATA), and Institute for Environment Policy (IEP),

respectively. In addition, it will be supported by the Directorate of Accreditation (Ministry of

Economy, Trade, and Energy) which will be responsible for the review of applications, the

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Strategy Challenge Management Report | Project Development 5

official awarding of the certification, and regular auditing of participants. Refer to Annex 3 for

more details on stakeholders.

PROJECT LIFE CYCLE AND TIMEFRAME

It is suggested that this collaboration be carried out throughout the project‟s entire lifecycle in the

following ways:

1) The development of the rating criteria will be done during workshops focusing on specific

areas of the certification (refer to Annex 4 for more details); 2) the New Program will be pilot

tested on three to five voluntary T&T providers who will contribute to further developing the

criteria in a realistic and constructive manner; 3) the New Program will be launched nationwide

and the focused marketing communication plan will begin; 4) yearly assessments (over the period

2013-2017) of the New Program‟s progress will take place which will include all major

stakeholders, especially certified T&T providers.

PILOT TEST & APPRAISAL

A pilot test is crucial to ensure the feasibility of this New Program, as well as evaluate time,

costs, and benefits. Central Albania was chosen as a primary area of interest for the pilot test,

which will be carried out in the area along the Egnatian Way (Elbasan, Pogradec, Berat, Fier, and

Dajt), a historical trade route between the Adriatic shores of Albania and Macedonia. This area

was deemed to be representative of Albania‟s offer suited to the „experience travel‟ market and

underpins Albania‟s link to the Silk Road.

IMPLEMENTATION & MARKETING

Seeing the success the original Authentic Albania Quality Mark program has had since its launch,

it seems that a strong implementation structure has been created which can be used for the New

Program. The focus is therefore on marketing and communication.

Information about Albania‟s T&T offer is currently widespread on the Internet. Although this

means all necessary information is available, the fact that it is spread out on so many different

platforms, makes the information search a difficult task for prospect visitors. The first

Development Pilot Test & Appraisal Implementation & Marketing Evaluation

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Strategy Challenge Management Report | Project Development 6

recommendation is that Albania takes ownership of its Internet presence and consolidates all

information into one unique, official website. This website‟s architecture should consider search

engine optimization, which aims at increasing a website‟s appearance on search engines using

key words. Additionally, Albania should continue establishing its presence on Social Media

platforms as this is another important information source for the identified target market.

An online application („Plan your Authentic Albanian Trip‟) will be created to promote this New

Program and certified T&T providers. Based on a series of questions (similar to a survey), it will

suggest a personalized Authentic Albania travel itinerary exclusively including certified

providers.

PROJECT FINANCIAL SUSTAINABILITY

It is suggested that this New Program development, the pilot test phase, and the set up of the

online application be entirely financed by the Albanian Government. According to benchmarked

programs and taking into consideration that the New Program will be built on an existing

structure, it can be expected that these costs reach a low US$ 250,000.

Upon implementation, a onetime certification fee as well as an annual membership fee will apply

to partnering T&T providers in order to cover the ongoing operating costs of the New Program.

These fees will be established based on business size and turnover; yet, the membership fee will

be exponential whereby larger firms will partially support the costs of smaller ones.

In order for the project to rapidly meet its objectives, it is critical that it successfully penetrates

the Albanian T&T market. Increasing the number and diversity of certified T&T providers will

increase the opportunities there are to market the label and to gain recognition for it. In turn, the

more consumers become familiar with the label and associate with it, the greater the marketing

power it will provide.

The abovementioned fees are expected to be the main barrier to market penetration in the first

stages of implementation, with businesses likely question if the expected benefits of the New

Program will offset its costs. In order to encourage T&T providers to apply for the certification,

the certification fee will be reduced and the first membership fee will be offered to businesses

having applied within the first year of implementation. The funding necessary for this part of the

project will equally originate from the government and is expected to reach about US$ 50‟000.

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Strategy Challenge Management Report | Forecasted Impacts of the Project 7

FORECASTED IMPACTS OF THE PROJECT

The impacts of this project are closely linked to the number of visitors it will be able to attract. A

similar program in Costa Rica yielded an average annual growth rate of 10.8% in terms of

demand over a ten year period following its implementation (The World Bank Group, 2011).

Using this as a benchmark, and considering Albania‟s early stage of development as a destination

and its low international awareness, a 5% annual growth rate in demand is deemed realistic for

this New Program. This growth rate has been applied to 30% of forecasted international arrivals

(representing the „experience travel‟ market) to establish the following numbers:

Total International ‘Experience Travel’ Market Arrivals

2012 2013 2014 2015 2016 2017 483'462 535'434 592'993 656'740 727'340 805'529

Seeing this forecast and taking into consideration the aforementioned project description, it can

be expected that this Project will have the following impacts:

Impacts Key Performance Indicators Increase Albania‟s competitiveness as a tourism destination; WTTC T&T competitiveness

index Increase visitation to Albania; International arrivals statistics, Enhance visitor dispersal and tourism expenditure throughout rural Albania;

Occupancy rates an n° of visits to attractions in rural Albania

Promote sustainable tourism development in rural Albania; N° of certified businesses Contribute to long term economic growth of Albania. GDP, T&T contribution to GDP

CONCLUSION

This project proposal aims at serving as a vehicle for socioeconomic growth in rural Albania. For

it to succeed, it must receive the support of all stakeholders, especially T&T providers. For the

proposed New Program to yield benefits for its certified providers, its marketing communication

actions need to be continuous over the first critical years of development in order to create global

awareness of this certification. In fact, the proposal represents a relatively small investment and

the pilot test ensures minimal risk. If the New Program proves to be successful in attracting

international visitors to Albania, it can be further extended to other Silk Road countries in order

to unify the T&T offer and create a network of authentic providers in key countries along the

route. In the future, it is also recommended that the project is developed to have an educational

program to assist uncertified providers become more sustainable to achieve the certification.

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Strategy Challenge Management Report | List of References 8

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Hassan, A. (2012). ‘Package Eco-tour’ as Special Interest Tourism Product-Bangladesh

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Reisinger, Y., Mavondo, F., Crotts, J. (2009). The importance of destination attributes: Western

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The World Bank Group. (2011). International Tourism: Number of Arrivals in Costa Rica.

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Strategy Challenge Management Report | Bibliography 9

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Strategy Challenge Management Report | Annexes 12

ANNEXES

ANNEX 1 – THE ALBANIAN „EXPERIENCE TRAVEL‟ MARKET TOURISM OFFER

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Strategy Challenge Management Report | Annexes 13

ANNEX 2 – TARGET MARKET SEGMENTATION: THE „EXPERIENCE TRAVEL‟ MARKET

Rationale In today‟s fast-paced world and rapidly evolving environment, people are seeking a break from

their daily routine when they go on holiday (Sodhi, 2011). They are increasingly interested in

discovering something new and are in need of experience-based travel (Deloitte, 2009).

Additional causes of this change in travel habits are an increase in the number of health-

conscious consumers who want to remain fit while avoiding stress (Sodhi, 2011), as well as an

increase in worldwide environmental awareness and social responsibility. The ageing

population is also contributing to this shift in travel habits since they have a demand for

„experience travel‟ (Deloitte, 2009).

Segmentation Variables Geographic: Key Sources of Origin - Latin America (about 35%); Europe, mostly Germany (about 25%); North America (about

20%); emerging markets: China, Brazil, and India; other: Australia and New Zealand Demographic: Income - Generally have a higher disposable incomes, leading to greater spending Psychographic: Lifestyle, Social Class, and Attitudes - Interested in discovering new, authentic places and willing to visit far-off destinations to do so - Ask for authentic experiences - Enjoy spending time in nature, practicing sports, and learning about new cultures - Mostly middle class, well-educated tourists interested in natural and intangible elements - Want to learn about and understand the places they visit by engaging with new cultures Technographic: Level of Use of Technology - Very knowledgeable about technology, which forms a vital part of their life Buying Behaviour: Purpose/Occasion, Frequency of Use, Buying Habits, Sources of Information before Purchase, and Booking Methods: - Seek a realistic, authentic snapshot of a destination; interested in adventure, culture and nature - Average length of stay of about seven days - Willing to spend considerable amounts in order to experience something new - Mainly use the Internet to find information, especially by searching for a destination on

Google, looking at a destination‟s website, and using social media (including reading a blog or viewing a friend‟s photos to find out more about a destination)

- Tend to visit a destination with no or few bookings, and usually travel independently Sources: George Washington University School of Business et al., 2010; ATLAS, 2007; Mintel, 2010

ANNEX 3 – STAKEHOLDERS & STAKEHOLDER MANAGEMENT

Stakeholder Their Contribution Project Benefits on them Bargaining power Interest Priority Management plan

Government related institutions

The continuity, quality, and recognition of the program depends on their support as they are included in every stage of the program‟s lifecycle and are the only source of financing

support the development of the T&T industry in-line with their strategy

contribution to the image and attractiveness of Albania

economic growth and environmental conservation

High, as they are the funding source

Medium, but

increasing

Key

player

regular performance measurement

collaboration with USAID and coordinated transition

clear objectives, responsibilities, hierarchy and program organization

Targeted tour operators, F&B outlets, and activity providers

Their adoption to the program and commitment to sustainable practices put forth by it will determine its level of success

differentiation opportunities promotion benefits alignment of their offer with

future trends enhancement of org.

reputation

High, but will decrease as the number of

participants increases High

Key

player

create awareness of the Program + benefits

educate on sustainable practices

support in the implementation

University of Tirana

Innovation of sustainable practices, contribution to the development of the criteria for the New Program

institutional credibility real-life projects for students

& faculty opportunity to contribute to

the country‟s development

High, as they hold the decision to participate, but will decrease once

committed (credibility of the institution)

High

Key player

recognize their contribution involve them in the whole

process include them in all official

communications

UNWTO The instigator of the project giving its framework and main objectives

contribution to the UNWTO SRI‟s objectives

image credibility

Low, as their implication is primarily supportive

High

Keep informed

include millennium objectives communicate on project needs

and achievements recognition of their support

Local communities

Coherence of the program in the eyes of visitors

preservation of their environment

contribution to the increase in their disposable income

promotion of their culture job creation and skill

development

Low, as their participation can be

ensured by regulatory frameworks

High

Keep informed

communication of the program value for them

reinvestment of income directed to the community

educate the population through schools on tourism and sustainability for Albania

International „Experience Travel Market‟

Economic contribution through the use of the services offered by certified businesses

opportunity to minimize their impact on the environment

ease of travel planning increased customer service matching offer to their profile

Medium / High, as their participation in the

project is determinant for its success

High

Keep informed

create awareness update and consolidate

customer profiles ask and consider feedback gather data

NGO‟s (environmental conservation)

Through supporting actions can contribute to this project and/or bring financing possibilities

supports their actions contributes to their success

Low, as they will not be directly implicated in the

project High

Keep

informed

communicate on the project goals, actions, achievements

identify areas needing support

Strategy Challenge Management Report | Annexes 15

ANNEX 4 – EVALUATION CRITERIA OF THE NEW PROGRAM

Certification Components

Description Indicators

Maximize

benefits for the

environment

and minimize

negative

impacts

T&T providers

consider their

immediate

environment in the

development of their

offer and contribute to

the conservation of

resources.

- Development of an offer minimizing the impact on

the environment

- Respect international and local legislation and

regulations

- Use of natural settings or attractions

- Customer education on responsible travel

- Implementation of recycling and waste management

Maximize

socioeconomic

benefits for the

local

community and

minimize

negative

impacts

T&T providers value

local communities and

conduct business in an

ethical manner.

- Contribution to gender equality through employment

and skill development through training

- Contribution to the reduction of local unemployment

(employment of local staff, guides, suppliers)

- Ethical wage levels

- Contribution to the economic development of local

sites, organizations, associations or businesses

included in their offer

Maximize

benefits for

cultural heritage

and minimize

negative

impacts

T&T providers put

great emphasis on

promoting the

Albanian culture and

seek to offer an

Albanian experience to

their customers.

- Promote visits to local cultural and historical sites

- Contribution to the protection of local historical,

archaeological, and culturally important sites

- Offer access to cultural discoveries (arts & craft

production, farming, etc)

Strategy Challenge Management Report | Annexes 16

ANNEX 5 – TIMEFRAME OF PROPOSAL

Description Stakeholders involved Actions Time (Months)

Inform all stakeholders Round tables and workshops

The Ministry of Tourism, Culture, Youth and Sport; the Directorate of Accreditation (Ministry of Economy, Trade, and Energy); UT; ATA; IEP.

- Project description and objectives approval - Setting, contribution, responsibilities and tasks

of each stakeholder - Budgeting and budget approval

3

Establish Framework Workshops

The Ministry of Tourism, Culture, Youth and Sport; UT; ATA; IEP.

- Adapt criteria for new business types - Determine rating method and grading system 6

Pilot Test The Ministry of Tourism, Culture, Youth and Sport; the Directorate of Accreditation (Ministry of Economy, Trade, and Energy); UT; ATA; IEP.

- Determine participating businesses - Evaluate according to framework - Develop action plan & implement changes - Adapt framework

12-18

Data collection (applications), audit

The Directorate of Accreditation - Collect data from applicants - Audit applicants - Attribute certifications

-

Creation of ‘Plan your Albanian Trip’ application Design contest within UT

The Ministry of Tourism, Culture, Youth and Sport; UT.

- Design and create the application - Integrate all certified T&T providers to the

system - Pilot test application - Translate application - Roll out on national website

8-12

Web presence management

The Ministry of Tourism, Culture, Youth and Sport; ATA

- Restrict the number of websites using the terms: Albania – Tourism – Authentic

- Consolidate all information - Delete current public tourism websites - Redesign national website - Link the official website to the social medias

3-6