Abstract
This market systems analysis (MSA) examines the HoReCa sector’s structure, challenges and opportunities. It applies a market systems development (MSD) lens to understand the core transactions, supporting functions and regulatory environment that shape the sector’s performance. Based on a variety of research methods, including stakeholder interviews and desk research, the study provides an overview of the sector’s structure, highlighting the dependence of the hotel industry on tourism trends and the central role of restaurants and cafés in Kosovo’s urban culture. The sector relies on both skilled and unskilled labour, but low retention rates create persistent challenges. The analysis identifies key constraints in the market system. The HoReCa sector struggles with high turnover rates for low-skilled professions, low levels of labour mobility for mid-skilled professions, and a lack of career guidance, which deters young people from entering the industry. This goes hand in hand with low levels of product differentiation. Business services remain fragmented, limiting access to marketing, certification and supply chain management support. At the regulatory level, weak enforcement of safety standards hampers competitiveness.