Geci is one of Albania’s most important infrastructure companies, having worked to create and maintain some of the country’s central motorways since 1993. In 2004, as Albania’s connectivity improved and the country became more accessible to tourism, Geci decided to diversify into the burgeoning sector. Today it is the full owner of the four-star Tirana International Hotel & Conference Center, in the heart of Albania’s capital. Building on its success in hospitality, the company is now embarking on the construction of a 38-floor five-star hotel that will further cater to the country’s growing arrivals. Here, the company’s owner Ram Geci explains his company’s growth story and how new government measures are incentivizing new business
Geci is one of the top infrastructure companies in Albania. How has it grown over the years?
I can say that it has grown alongside Albania. Geci was founded in 1993 as democracy began to establish itself in the nation. The main activity of the company is infrastructure and has been since its beginnings. We have constructed, and continue to build, some of the most important roads in Albania. Each year we have got more and more contracts and with 25 years’ experience under our belt, the company has grown steadily in terms of revenue and assets. Today, we have a full range of machinery and more than 200 vehicles to carry out our various projects. Depending on the contracts we are working with, we employ up to 500 people.
Like the company’s growth, each year the situation with the government has been improving. With all the reforms that the government has done, everything has changed. The standards of the roads and of the work has improved. This is very positive news.
At the moment, we have two big contracts for road maintenance in Albania. These contracts last for five years, and they began two years ago. This is something new because it’s the first time in Albania that these contracts for road maintenance have existed. This is part of the government’s strategy. The World Bank is helping to finance these contracts and the results have been excellent for Albania. Everybody can feel the standards of the roads and understand the improvements. The results are obvious. Even though we know that there is still a need to build and maintain more roads, that which has been done has been very successful.
The relationship between the government and the companies executing the contracts has also improved significantly. The government has been very careful in understanding how to make these projects even better for both the country and the contractors. Likewise, in order for these projects to be successfully applied, they’ve also contacted foreign experts in road construction who are supervising the projects and bringing them up to European standards. These experts are helping a lot. For the first time we have quality roads, and this makes a huge difference to the overall quality of life for citizens and businesses. More investment is needed, but right now the government is on the right path, with the right politics and mechanisms to bring positive changes. They’re trying very hard to improve standards.
This year, one of the most positive changes made by the government has been in relation to taxes. Formerly profits were taxed at a rate of 15 percent, but starting in 2019, they decreased to eight percent. This helps the companies reinvest and increase their capacities to do more for Albania. This measure is not only for infrastructure companies, but for all the companies in Albania, so it will improve the overall economic situation.
Geci is also becoming an increasingly important player in the tourism industry. Why did you decide to enter that sector?
As we grew into one of the most important infrastructure companies, it gave us the opportunity to invest in other fields. In 2004, Geci became one of the shareholders of the Tirana International Hotel & Conference Center. From there, tourism became a focus. Then in 2011, Geci became 100-percent owner of the hotel, which is the biggest hotel and conference center in the country. Now that tourism in Albania is rapidly developing, we have come up with a project to invest further in the sector. The new project is very ambitious. We are going to build a five-star hotel that will be 33 stories high and five floors underground. It’s going to have more than 200 rooms, a large conference area that will fit 1,000 people and many other facilities inside. It’s going to have everything necessary for it to be considered five-star, from facilities to impeccable service. It’s going to be a more-than-€50 million investment.
And what is the timeline?
We’re going to start building in March 2019. We hope to finish it within four years – by 2023 – or perhaps even sooner. Finishing this hotel means increasing the capacity of Tirana to host tourists and further enhancing the hospitality standards of the city. The number of tourists in Albania is increasing by more than 50 percent almost every year, so we believe this investment is needed and will be profitable. Of course, we cannot make it without the right kind of support from the authorities. The government has been investing a lot in tourism and helping private companies who want to do the same. One of the forms of assistance the government is providing is decreasing the VAT. It used to be 20 percent; now it is six percent. I believe that improving taxation is the most important thing the government can do. These tax decreases have not only been for VAT; other taxes are decreasing as well. Now, for example, if you make an investment in this field of more than €15 million over ten years, you are excluded from certain taxes that you would normally pay. This is a new methodology of the government to encourage investment. Furthermore, the leadership is helping with documents, permissions, everything to make the whole process easier and more attractive.
Have these changes already made an impact on the tourism industry?
These incentives have brought many good results. You can see a lot of important investments springing up in tourism today. Not only in Tirana or on the coast, but almost everywhere you can see a lot of tourism complexes and resorts going up. With every new government reform, the situation is getting better. If this continues, Albania will become a hugely important tourism hub. These changes have also made it very attractive for foreign investors. Businesses from abroad have a lot of support and incentives from the government to invest in Albanian tourism, and we see more and more entering the market. They know that the situation is totally different today than in it was in the past and that today there is a huge opportunity to grow the sector.
What message would you send to potential German investors in tourism?
Albania is a perfect place for investment in tourism. The weather conditions are the best in all the Mediterranean. Out of the 365 days of the year we have more than 300 days of sun, which is a very rare advantage. The coast is 400km long and there is a lot of space to invest. The seashore is not only an important focus, but the mountains are very interesting as well. We still don’t have so much development happening there but there are so many beautiful spaces that could give rise to beautiful tourism complexes. Now is the right time to come in.