The reopening of Aman Sveti Stefan following a five-year closure returns one of Montenegro’s most internationally recognised tourism assets to operation under a settlement reached between the Government of Montenegro, leaseholder Adriatic Properties and other parties involved in arbitration before the London Court of International Arbitration. The agreement preserves the existing concession, extends the lease and introduces revised financial arrangements, including increased rent and a 10% share of the lessee’s annual profit for the state.
Tourism specialist Petar Golubović, director of Montenegro’s Centre for Tourism Research and Development, described the reopening as one of the country’s most significant tourism developments of the past decade. He said the importance lies in the return of both the Sveti Stefan destination and the Aman brand, whose guests frequently choose destinations based on the operator’s global portfolio.
Tourism Figures Highlight Shift Toward Higher Spending
Montenegro recorded 2.73 million tourist arrivals and 15.37 million overnight stays in 2025. Foreign visitors accounted for 95.8% of all overnight stays, while coastal destinations generated 92.6% of total nights. Although arrivals increased compared with 2024, the decline in overnight stays reflected shorter average visits, highlighting the importance of increasing visitor spending rather than relying solely on higher tourist volumes.
The reopening supports that objective through the resort’s position in the ultra-luxury hospitality segment. Accommodation rates at Aman Sveti Stefan exceed €1,500 per night for many room categories and rise considerably higher for premium suites during the summer season. Guests also generate spending on restaurants, wellness facilities, yacht charters, marinas, private transport, cultural excursions, wine experiences, events and personalised travel programmes, extending economic activity beyond the property into Budva, Tivat, Kotor, the Bay of Kotor and Montenegro’s wider premium tourism economy.
Settlement Introduces New Financial Terms
The settlement resolves all claims and counterclaims, maintains the existing contractual framework and extends the lease by five years, corresponding to the period during which the resort remained closed after disputes concerning beach access and operating conditions required to preserve guest privacy.
In addition to increased lease payments, the agreement grants the state a 10% participation in the lessee’s annual profit, establishes access arrangements for Sveti Stefan, Queen’s Beach and Miločer Beach, and includes measures intended to involve the local community while protecting the area’s cultural landscape.
Before the closure, annual lease payments were reported at approximately €1.9 million. The revised rental amount has not been disclosed publicly, making the increase in guaranteed state revenue impossible to quantify. The value of the profit-sharing mechanism will depend on the calculation of net profit, including deductible expenses and financial transactions involving the Aman operator, affiliated companies, financiers and service providers.
A 10% share of profit differs from participation in revenue or operating cash flow. Luxury hotels can generate substantial turnover while reporting significantly lower net earnings after management fees, depreciation, financing costs, capital expenditure and reopening expenses. Effective implementation of the profit-sharing mechanism therefore depends on transparent accounting standards, audit rights and access to the resort’s financial statements.
Estimated Revenue and Fiscal Contribution
Illustrative operating assumptions indicate the potential scale of the business. A resort with approximately 40–60 premium accommodation units, an average room rate of €1,500 and annual occupancy between 50% and 60% could generate approximately €11 million–€20 million in room revenue. Income from restaurants, spa facilities, events and other guest services could increase annual property revenue to approximately €16 million–€30 million, depending on the operating season and the year-round contribution of Villa Miločer.
With EBITDA margins of 25%–35%, earnings before interest, tax, depreciation and amortisation could range between €4 million and €10 million. Net profit would remain lower, particularly during the reopening period, leaving the state’s 10% participation worth several hundred thousand euros annually rather than several million. Additional fiscal benefits would come from lease payments, VAT, tourist taxes, employment contributions, corporate taxes and premium visitor spending outside the resort.
Employment and Workforce Challenges
Prior to the closure, the government estimated that the complex supported approximately 180–300 direct jobs, including permanent and seasonal positions. The operation also generated demand for domestic transport, food and beverage suppliers, horticulture, maintenance and hospitality services. Re-establishing these commercial relationships is expected to accompany the rebuilding of the workforce.
Montenegro’s labour market remains a constraint for the luxury hospitality sector. High-end hotels require multilingual personnel, experienced chefs, wellness specialists, sommeliers, housekeeping teams trained to international standards and managers with luxury hospitality experience. Many experienced tourism workers have relocated to Croatia, Slovenia, Austria, Germany and cruise operators offering more attractive salaries and career opportunities.
Year-Round Operations Through Villa Miločer
Operations will resume through two complementary components. Villa Miločer, the former royal residence on the mainland, is designed as a year-round destination, while the historic island of Sveti Stefan will continue operating seasonally. The structure creates opportunities to extend activity beyond July and August through wellness programmes, executive retreats, destination weddings, private gatherings, cultural events and small conferences. Although Villa Miločer contains only eight suites, its year-round operation is expected to support winter air connections, premium transport, restaurants and other tourism services outside the peak summer season.
According to Petar Golubović, the wider Sveti Stefan–Miločer area also has potential for luxury cultural tourism and meetings. The island has previously hosted exclusive weddings and private events and could continue accommodating selected concerts, exhibitions and international gatherings while preserving its heritage and privacy.
Part of Montenegro’s Expanding Luxury Hospitality Portfolio
The reopening complements Montenegro’s wider luxury tourism portfolio, which includes One&Only Portonovi, Regent Porto Montenegro, The Chedi Luštica Bay and premium hotels in Kotor and Perast. One&Only Portonovi reportedly generated approximately €24 million in revenue during 2024, demonstrating the commercial performance that a limited number of premium rooms can achieve.
Sveti Stefan remains distinct because the fortified island itself is the tourism product. Its restored stone houses, courtyards and narrow streets create an asset that cannot be replicated through conventional coastal development, supporting premium pricing and maintaining international recognition despite the five-year closure.
Investment Certainty and Future Development
The reopening also addresses concerns created by the prolonged dispute, which raised questions among hotel developers, lenders and international operators regarding contractual certainty, beach management and the balance between private investment and public access. The settlement allows operations to resume without terminating the concession. Under the agreement, the state secured increased rent, profit participation, public-access provisions and continuation of hotel operations, while the leaseholder obtained additional operating time and a framework allowing Aman to return.
Implementation of the agreement will require coordinated action by the Municipality of Budva, Morsko Dobro, Adriatic Properties and the hotel operator to apply agreed access arrangements consistently while maintaining guest privacy.
Janu Project Planned for Miločer
The future of Miločer Park remains linked to completion of the former Kraljičina Plaža hotel redevelopment. Golubović stated that the scale of the project had long been controversial but argued that leaving the unfinished structure abandoned would result in permanent visual and economic losses. The settlement provides for continuation of the hotel project under the Janu brand, Aman Group’s sister hospitality concept, while excluding additional residential apartments. Removing residential units preserves the project’s long-term tourism function instead of shifting value toward private real estate sales.
Completion of the development will require architectural and engineering measures involving façades, rooflines, landscaping, natural materials, lighting, transport access, wastewater infrastructure and construction logistics to reduce its impact on Miločer Park while preserving mature trees and the surrounding landscape. Completing the hotel would restore lease income, hotel revenue, employment and tourism tax generation while replacing an unfinished construction site that currently produces no commercial return.
Durmitor Proposal Would Expand Luxury Tourism
The reported possibility of another Aman development on Durmitor would expand Montenegro’s luxury tourism offering beyond the coast. Such a project remains prospective but could combine stays at Sveti Stefan, the Bay of Kotor, Durmitor National Park, Žabljak, Tara Canyon and northern Montenegro, supporting longer visitor stays and greater tourism activity outside the Adriatic coast. Any future Aman project on Durmitor would require careful management of protected areas, water resources, wastewater systems, construction density, transport infrastructure and visual impact to preserve the surrounding environment.
Infrastructure Remains Critical to Economic Impact
Montenegro’s infrastructure will also influence the broader economic impact of the reopening. Tivat Airport remains heavily congested during the summer season and has limited capacity for year-round expansion. Road congestion around Budva and the Bay of Kotor, together with wastewater treatment, electricity supply, coastal cleanliness and waste management, continue to affect the visitor experience beyond hotel boundaries. The government’s tourism strategy therefore links premium hospitality with investment in airports, roads, marinas, environmental infrastructure and domestic suppliers. While Aman attracts visitors prepared to spend €1,500–€5,000 per night, broader economic benefits depend on the ability of local producers, transport operators and cultural institutions to meet premium service standards.
Although Sveti Stefan will never dominate Montenegro’s visitor statistics because of its limited capacity, its significance lies in its pricing power, international reputation and influence on the country’s tourism positioning. During the resort’s closure, competing destinations in Greece, Croatia, Italy and Turkey expanded investment in branded resorts, marinas and luxury residential developments, while the reopening restores one of Montenegro’s principal reference points for high-value tourism.
The settlement has returned the state, the investor and the hotel operator to a common commercial framework. Its long-term effectiveness will depend on transparent profit accounting, consistent implementation of public-access rules, completion of the Miločer redevelopment without further environmental impact and stronger integration of domestic suppliers into Montenegro’s luxury tourism value chain.
