The EcoVillage Shas initiative, led by Eagle Hills Montenegro in collaboration with local development entities, is poised to become a significant eco-tourism destination in Ulcinj. This project aims to integrate various components such as hospitality, residential areas, wellness facilities, cultural experiences, and recreational opportunities. Its economic impact will be evaluated across multiple phases: construction, early operations, and full operational maturity, influencing employment rates, regional GDP, tourism revenues, and public finances.
Initially, the project will necessitate a substantial capital investment over several years. The preliminary phase of design and site preparation is expected to last approximately 12 months, followed by a phased construction period of 24 to 30 months. Although Eagle Hills has not disclosed specific capital expenditure figures, similar eco-tourism projects in the Mediterranean typically require total investments ranging from €150 million to €350 million. For analysis purposes, three investment scenarios have been modeled: a Base Case at €180 million, an Upside Case at €250 million, and a High Commitment Case at €320 million.
During the construction phase, EcoVillage Shas is projected to create a considerable number of jobs. The construction labor intensity for large tourism projects averages between 8 to 12 direct jobs per €1 million invested. Under the Base Case scenario of €180 million CAPEX, this could translate to approximately 1,440 to 2,160 direct construction jobs. Including indirect employment from supply chains and professional services, total job creation could range from 2,300 to 4,300 full-time equivalent job-years throughout the construction period.
In the Upside Case with a €250 million investment, direct construction jobs may increase to between 2,000 and 3,000. The High Commitment Case would further elevate these numbers to an estimated 2,560 to 3,840 direct jobs. Once operational, EcoVillage Shas is anticipated to support between 900 and 2,375 permanent jobs based on projected annual operating revenues of €60 million to €95 million.
Tourism receipts will be a critical component of the project’s economic contribution. Montenegro’s tourism sector has seen record growth with over 3 million international passengers in recent years and national tourism revenues estimated between €2.7 billion and €3 billion. EcoVillage Shas aims to attract an additional 60,000 to 110,000 visitors annually who are expected to spend between €150 and €230 per person per night during their stay. This could result in annual tourism receipts ranging from €40 million to €150 million when fully operational.
Utilizing typical tourism spending multipliers for small economies—often between 1.6 and 2.0—the overall economic impact from visitor spending could yield gross value added ranging from €64 million to €300 million annually across the regional economy.
The fiscal implications of EcoVillage Shas are also noteworthy. Revenue contributions will stem from VAT on services and goods related to tourism, payroll taxes from employment generated by the project, property taxes, and various tourism-related fees. With VAT set at 21% on hotel services and total payroll contributions averaging around 17% to 21%, projected annual VAT receipts could amount to between €12.6 million and €19.9 million based on operating revenues. When factoring in indirect employment and tax flows, the total fiscal contribution could reach between €25 million and €55 million annually at maturity.
In addition to direct economic benefits, EcoVillage Shas is expected to enhance infrastructure in Ulcinj through improvements in access roads and utilities that may attract further private investments in tourism-related ventures. These developments can lead to increased off-season tourism and diversification into wellness and cultural tourism sectors.
However, several risk factors could influence these projections including infrastructure delivery timelines, macroeconomic stability affecting Montenegro’s euroized economy, fluctuations in global tourism demand due to economic cycles, cost inflation in construction materials (which have risen by approximately 4% to 7% annually), and regulatory approval timelines for environmental assessments.
Over a ten-year horizon, cumulative direct and indirect value added from EcoVillage Shas could reach between €1.1 billion and €2.2 billion while fiscal receipts may exceed €220 million to €450 million under stable operating conditions. This project represents a significant opportunity for economic engagement within Montenegro’s tourism sector while providing a framework for investor assessment against similar developments in the Adriatic region.
