The development of a planned five-star hotel near Budva’s Old Town has been suspended pending a revised design after archaeological excavations uncovered an ancient necropolis at the construction site, requiring additional heritage protection measures and renewed approval. The project is being developed by Montenegroflight d.o.o. on the former Žuta kuća site, next to Hotel Mogren. Construction was halted during excavation works, with investigations confirming the presence of an ancient burial site.
Archaeological investigations conducted between March 30 and April 30 identified remains that must be preserved and incorporated into the completed development.
Montenegro’s Cultural Heritage Protection Administration has instructed the developer to revise the project to ensure the archaeological findings are protected and presented within the hotel. The updated design is expected to include the remains in the building, including its basement area. The changes introduce additional architectural and engineering requirements, while construction cannot resume until the developer obtains renewed heritage approval. No revised investment value or completion date has been disclosed.
The discovery creates potential additional costs beyond redesign and conservation work. Construction delays can increase financing expenses, contractor claims and equipment prices, while postponing the start of hotel operations and the generation of revenue.
The project illustrates the development constraints affecting tourism investments in Budva, where valuable coastal sites are located near historically and archaeologically sensitive areas. Developments close to the Old Town face additional planning requirements when construction intersects with archaeological remains, heritage protection and urban-design considerations.
For lenders, archaeological and cultural-heritage risks are relevant to financing assessments for coastal hotel projects, alongside conventional planning, environmental and property-title due diligence. Discoveries made after construction begins can alter project economics even when development has already advanced beyond the planning stage.
The archaeological remains could also become part of the hotel’s commercial offering if incorporated effectively into the design and guest experience. However, that potential depends on the developer meeting conservation requirements and absorbing the additional costs associated with redesign and delays.
Montenegroflight d.o.o. must now prepare a revised hotel concept that meets the requirements of heritage authorities while maintaining the commercial viability of the five-star development on the sensitive site beside Budva’s Old Town.
