'Investment opportunities in the Western Balkans with emphasis on the tourism and hospitality related investments'
Monday 27 October 2008 at 18:19
Peter Vesenjak, CEO of Hosting d.o.o.(ltd.), Ljubljana
(Hosting d.o.o. (ltd.) represents a group of companies located in Slovenia, Croatia and Serbia, www.hosting.si )
Western Balkans is a European region situated between western, central, eastern and southern Europe which means that it is positioned closest to the main European markets and is rich with tremendous and very attractive natural (Adriatic sea, Mountainous areas, many thermal healing water sources, excellent wine regions, etc.) and historic (Old historical cities, e.g. Dubrovnik, museums, etc.) resources, favorable climate (mixture of continental and Mediterranean climate) and fast and easy traffic access.
Western Balkans economic growth in past 5 years has been marked as one of the highest and most stabile in Europe. The comparison of the absolute numbers of economic development and the potential for further growth (rich resources, positive political changes, opening of the countries for foreign investment, etc.) show that the potential for growth is still high in near and long term future. This is why the level of growth in western Balkans countries show further tendency of growth, above the level of most of the western countries despite the global financial markets crisis.
Data for GDP and GDP per capita – Western Balkans Countries
Source: CIA World Factbook 2008
The level of foreign investment and especially FDI in past years was still rather low in comparison to the above mentioned potentials and resources of the western Balkans countries and in comparison to the other e.g. eastern European emerging markets. This was mostly due to the perceived image of the region by the international capital markets after the 90s rough political changes. It is to be stressed that the western Balkans countries with the latest political changes and developments are becoming stabile and future oriented countries, very much open for foreign investment (with all the countries of the Western Balkans the EU has established a process – known as the Stabilization and Association process - which aims to bring them progressively closer to the EU. Thanks to this process, these countries already enjoy free access to that of the EU single market for practically all their exports, as well as EU financial support for their reform efforts.).
Tourism investment and real estate investment opportunities are one of the most attractive potentials in the region, due to the most attractive natural and historical resources, internationally traditionally already well recognized tourism destinations (Dubrovnik, Montenegro, etc.), fast developing infrastructure and general economic growth generating international business clientele. At the same time underdeveloped tourism capacities as by the quantity and as well the quality demanded by the international tourism market, grows the need of the western Balkans countries to open to the international foreign investment to comply with the demand for growth in future.
All western Balkans regions altogether in 2007 generated 11,7 million tourist arrivals and 12,3 billion USD of foreign currency income, which is way under the real potential of the region. Most of the existing tourism capacities (Hotels, etc), except those developed and reconstructed in the last 10 years, which were developed mostly in 70s and 80s, are seldom meeting the standards and demands for its turning to the modern and successful tourism facilities so the experience show that the international investors do a better job if they develop a new Greenfield investment or at least achieve a total reconstruction and/or enlargement of the existing facility to be able to design and technologically meet all the necessary standards for future years of tourism. Investors did meet problems in urban planning efficiency by the public sector in some sub regions of the western Balkans in the past, but the experiences are very different in different countries, sub regions or even municipalities so investors should primarily check for these before they start the development.
Attractive developments can be made on the Adriatic coast in Croatia and Montenegro and in the near hinterland (also B&H) where there is still place for Greenfield investments related to the Mediterranean climate and vicinity of the sea. Due to the international socio-demographic trends and need of the population in entire European market also spa resorts, for which the western Balkans is very rich of resources, are great potential for investment development. Cities, especially the capitals and even smaller but historically important and attractive cities can be great opportunity for investment in hospitality related facilities for meeting growing demand of business, transient and city touring clientele discovering (again) the region.
All these grounds put the western Balkans countries on the market as one of the rare opportunities for potential for stabile and growing investments in coming years as well as long term positive perspective.
Western Balkans is a European region situated between western, central, eastern and southern Europe which means that it is positioned closest to the main European markets and is rich with tremendous and very attractive natural (Adriatic sea, Mountainous areas, many thermal healing water sources, excellent wine regions, etc.) and historic (Old historical cities, e.g. Dubrovnik, museums, etc.) resources, favorable climate (mixture of continental and Mediterranean climate) and fast and easy traffic access.
Western Balkans economic growth in past 5 years has been marked as one of the highest and most stabile in Europe. The comparison of the absolute numbers of economic development and the potential for further growth (rich resources, positive political changes, opening of the countries for foreign investment, etc.) show that the potential for growth is still high in near and long term future. This is why the level of growth in western Balkans countries show further tendency of growth, above the level of most of the western countries despite the global financial markets crisis.
Data for GDP and GDP per capita – Western Balkans Countries
Source: CIA World Factbook 2008
The level of foreign investment and especially FDI in past years was still rather low in comparison to the above mentioned potentials and resources of the western Balkans countries and in comparison to the other e.g. eastern European emerging markets. This was mostly due to the perceived image of the region by the international capital markets after the 90s rough political changes. It is to be stressed that the western Balkans countries with the latest political changes and developments are becoming stabile and future oriented countries, very much open for foreign investment (with all the countries of the Western Balkans the EU has established a process – known as the Stabilization and Association process - which aims to bring them progressively closer to the EU. Thanks to this process, these countries already enjoy free access to that of the EU single market for practically all their exports, as well as EU financial support for their reform efforts.).
Tourism investment and real estate investment opportunities are one of the most attractive potentials in the region, due to the most attractive natural and historical resources, internationally traditionally already well recognized tourism destinations (Dubrovnik, Montenegro, etc.), fast developing infrastructure and general economic growth generating international business clientele. At the same time underdeveloped tourism capacities as by the quantity and as well the quality demanded by the international tourism market, grows the need of the western Balkans countries to open to the international foreign investment to comply with the demand for growth in future.
All western Balkans regions altogether in 2007 generated 11,7 million tourist arrivals and 12,3 billion USD of foreign currency income, which is way under the real potential of the region. Most of the existing tourism capacities (Hotels, etc), except those developed and reconstructed in the last 10 years, which were developed mostly in 70s and 80s, are seldom meeting the standards and demands for its turning to the modern and successful tourism facilities so the experience show that the international investors do a better job if they develop a new Greenfield investment or at least achieve a total reconstruction and/or enlargement of the existing facility to be able to design and technologically meet all the necessary standards for future years of tourism. Investors did meet problems in urban planning efficiency by the public sector in some sub regions of the western Balkans in the past, but the experiences are very different in different countries, sub regions or even municipalities so investors should primarily check for these before they start the development.
Attractive developments can be made on the Adriatic coast in Croatia and Montenegro and in the near hinterland (also B&H) where there is still place for Greenfield investments related to the Mediterranean climate and vicinity of the sea. Due to the international socio-demographic trends and need of the population in entire European market also spa resorts, for which the western Balkans is very rich of resources, are great potential for investment development. Cities, especially the capitals and even smaller but historically important and attractive cities can be great opportunity for investment in hospitality related facilities for meeting growing demand of business, transient and city touring clientele discovering (again) the region.
All these grounds put the western Balkans countries on the market as one of the rare opportunities for potential for stabile and growing investments in coming years as well as long term positive perspective.