Montenegro’s state-controlled hotel operator Budvanska Rivijera recorded higher revenue in the first half of 2026, supported by stronger pricing, increased ancillary income and improved performance at key properties as the main tourism season began. The company reported that total revenue for the first six months of 2026 increased by €462,032, representing growth of 6 per cent compared with the same period a year earlier. Turnover reached approximately €8.16 million, compared with around €7.70 million in the first half of 2025.
Revenue from package arrangements rose by 5 per cent to €5.17 million, while income generated from food, beverages and other services outside standard accommodation packages increased by 11 per cent. The revenue growth exceeded the increase in tourist nights. Budvanska Rivijera recorded 148,884 overnight stays in the first half of 2026, up 2 per cent year-on-year. The stronger revenue performance indicates higher income generated per guest night through pricing, guest structure and additional spending.
On a portfolio-wide basis, total first-half revenue represented approximately €54.80 per registered overnight stay, while package revenue amounted to about €34.70 per overnight stay. These figures are not equivalent to hotel industry indicators such as average daily room rate or revenue per available room, as the company has not published sufficient data for those calculations. They indicate that revenue per guest night increased by around 4 per cent.
June operating result improves as summer season begins
The strongest improvement came in June, when Budvanska Rivijera reported a positive business result of €1.85 million, representing a 78 per cent increase compared with June 2025. The comparable result for the previous year was approximately €1.04 million. For the full six-month period, the company said its result improved by €1.52 million, or 28 per cent. Budvanska Rivijera did not disclose the absolute first-half result, preventing calculation of the exact interim profit or loss.
The company’s performance reflects the seasonal nature of coastal tourism, with weaker winter and spring operations followed by a significant improvement during the beginning of the summer season. Early July results showed further growth. During the first 25 days of July 2026, overnight stays increased by 25 per cent, while revenue from hotel arrangements grew by 30 per cent.
Renovation of Slovenska Plaža supports higher demand
The company’s largest asset, the Slovenska Plaža tourist resort, recorded a 12 per cent increase in overnight stays during the first half of 2026. During the first 25 days of July, overnight stays at the resort increased by 41 per cent. The performance follows the completion of a €14 million refurbishment project at Slovenska Plaža in 2025, covering four accommodation blocks: Limun, Mangolija, Kana and Mirta villas.
The project included the renovation of 334 rooms, representing investment of approximately €42,000 per room. Financing included around €10 million from a loan provided by NLB Banka Podgorica, while almost €4 million came from Budvanska Rivijera’s own resources. The refurbishment improved accommodation capacity and quality at the resort without representing a complete redevelopment of the wider complex.
Growth was also supported by the expansion of Palas Lux in Petrovac, where overnight stays increased by 35 per cent after a second section entered operation. The new section added approximately 48 rooms and apartments to the higher-end accommodation offer connected with Hotel Palas.
Portfolio includes major coastal tourism assets
Budvanska Rivijera operates several major tourism properties along the Montenegrin coast. The Slovenska Plaža resort includes 1,016 accommodation units, while the nearby four-star Hotel Aleksandar has 187 units. In Petrovac, the company operates Hotel Palas with 171 units, Hotel Castellastva with 185 units, and the expanded Palas Lux facility. The smaller Hotel Mogren in Budva, with 49 units, is planned for reconstruction into a five-star hotel. The company stated that liquidity remained stable, with salaries, supplier obligations and liabilities to state and municipal institutions being paid on schedule.
Higher financing costs affect profitability
Despite operational improvements, Budvanska Rivijera’s financial structure remains affected by higher financing costs. In 2025, the company generated €1.5 million in net profit, compared with €3.9 million in 2024. Net operating profit increased to €5 million from €3.9 million, but financial losses widened significantly. The finance result deteriorated to a loss of €3.2 million in 2025, compared with €472,000 in 2024, due mainly to increased interest expenses and foreign-exchange differences.
Net sales revenue declined to €22.4 million from €24.8 million, while other revenue increased to €7.3 million from €2.5 million. The company’s recent borrowing for refurbishment projects highlights the impact financing costs can have on hotel earnings. A €10 million loan at indicative interest rates of 5.5 to 7 per cent could generate annual interest costs of approximately €550,000 to €700,000, excluding principal repayments.
MK Group proposes €700 million resort transformation
The future development of Budvanska Rivijera is linked to a proposal from MK Group, which stated that it controls 33.58 per cent of the company through related investment vehicles. The proposal envisages a transformation of Slovenska Plaža and Hotel Aleksandar with an estimated investment value of €700 million.
The concept, prepared by Make Architects, includes two six-star hotels, hotel-serviced residences, a congress centre with capacity for 2,500 people, underground parking for approximately 3,000 vehicles, retail areas, pedestrian zones and more than 100,000 square metres of green space. A central park would cover approximately 38,000 square metres. The proposed investment exceeds 20 times Budvanska Rivijera’s total 2025 income of approximately €29.7 million, meaning it would require a separate financing structure rather than relying on existing company cash flow. Potential financing would involve a combination of shareholder equity, project debt, phased construction, advance sales of serviced residences and participation from international hotel operators or institutional investors.
Government reviewing possible ownership restructuring
MK Group presented two possible ownership models for the development. Under the first option, the state and minority shareholders would jointly invest through the existing company. The second option involves dividing Budvanska Rivijera’s assets. Under this model, the state would receive almost full ownership of the Petrovac properties — Palas, Castellastva and Palas Lux — as well as Hotel Mogren in Budva. A separate company would manage Slovenska Plaža and Hotel Aleksandar, with MK Group holding approximately 60 per cent, the state retaining around 30 per cent, and other minority shareholders owning the remaining 10 per cent.
The Montenegrin government postponed a decision on the proposal in March 2026, pending additional legal, financial and technical analysis. The process involves determining the value of operating businesses, hotels, land, existing infrastructure and future development rights, while considering debt levels, refurbishment costs, planning requirements, construction expenses and future cash flows.
Shareholder structure remains central to valuation discussions
The Montenegrin government directly owns approximately 41.6 per cent of Budvanska Rivijera, while the Pension and Disability Insurance Fund and Employment Agency contribute to the state-controlled ownership bloc. Companies connected with MK Group represent the largest private shareholder position, while numerous minority investors remain exposed to decisions made by the two dominant ownership groups. The company’s last reported stock-market price was €7.30 per share, although trading activity is limited and the market price does not necessarily reflect control value, strategic land holdings or future development potential.
Tourism market recovery supports stronger outlook
Montenegro’s tourism sector recorded stronger results in June 2026, with the country registering approximately 2.11 million overnight stays, representing a 15.2 per cent increase compared with the previous year.
Overnight stays in collective accommodation facilities, including hotels, reached almost 794,000, compared with approximately 736,000 a year earlier. Budvanska Rivijera’s performance, particularly at Slovenska Plaža, exceeded broader market growth at the beginning of the peak season. The company’s increase in ancillary revenue, including food, beverages and additional services, represents an important component of the recovery by increasing income without requiring equivalent expansion of accommodation capacity.
Further company disclosures on occupancy levels, average room rates, revenue per available room, operating cash flow and debt servicing would provide additional information on the profitability of recent investments. The 2026 results demonstrate improved operating performance following targeted refurbishment projects, while the proposed €700 million transformation represents a separate development and ownership challenge involving financing, planning approvals and allocation of future value among the state, MK Group and minority shareholders.
