TIRANA — US-based hotel giant Marriott International is set to launch Albania operations through a franchise deal with Albanian-owned Albstar, which is building the “National Arena” stadium and a 24-storey tower in downtown Tirana. The announcement was made by Prime Minister Edi Rama, who hailed the arrival as a milestone for the country’s 5-star hospitality industry.

Hyatt, another US chain, is also about to conclude an Albanian deal, which local media have suggested could involve the former Sheraton hotel currently operating under the Mak brand of Kuwait-based Kharafi Group Investments. Marriott was previously present in Albania through the Sheraton brand (a Starwood property acquired in 2016), but Sheraton left in early 2018 after the hotel was purchased by an Albanian oil company for €30 million.

The new Marriott hotel will be located next to the National Arena, a €50 million public-private partnership project with 22,000 seats. Albstar was offered public land to build commercial facilities, including the hotel tower, in return for constructing the stadium.

Tax incentives for luxury tourism

The Albanian government has introduced a package of tax breaks to attract high-end branded hotels. These include a reduced VAT of 6% on all services offered by new chained-brand luxury hotels and resorts (down from the previous 20% on accommodation), and a 10-year exemption from corporate income tax. The incentives apply to investments ranging from €8 million to €15 million for four- and five-star units operated by internationally renowned chains or local companies under management or franchise contracts.

“Five-star hotels bring higher contribution and impact to the tourism industry and the country’s economy regarding the image, high level of spending, contribution to employment, quality of jobs, wages and above all the fundamental hospitality culture,” Rama said at a Tirana tourism investment forum.

Luxury competition intensifies

Tirana’s luxury hotel market has become more competitive in recent years. The Albanian-owned Plaza Hotel, a 24-storey tower in the city centre, opened in late 2016. Hilton Garden Inn, a mid-priced Hilton brand, launched its first Tirana hotel in September 2017, a €19 million franchise investment. Austrian-owned Rogner Hotel has operated in Tirana since the early 1990s.

Further competition is expected with the opening of the Marriott hotel next year and a new giant hotel near the landmark Tirana International Hotel.

Skepticism from local experts

While the government promotes luxury investment, some local experts express skepticism, noting that demand for accommodation in Tirana is mostly for medium-priced three- or four-star hotels. They question whether the market can absorb additional high-end rooms.

Why it matters

The entry of Marriott and Hyatt signals a strategic shift in Albania’s tourism policy toward high-end, branded properties, supported by fiscal incentives. This could reshape the country’s accommodation mix and attract a higher-spending tourist segment, but the focus on luxury may overlook the dominant demand for mid-market rooms. The tax breaks also raise concerns about potential money laundering, as voiced by the opposition. With over 100 hotel construction permits issued recently, the supply side is expanding rapidly, yet informal accommodation — apartments and villas renting tax-free — remains a major competitive challenge for licensed operators. The success of this strategy will depend on whether luxury investment can help extend the tourism season beyond the coastal peak and address structural issues such as unclear property titles, which have deterred foreign investors.