Montenegro’s government has delayed a critical decision regarding the restructuring of Hotelska grupa Budvanska rivijera, a key player in the nation’s tourism sector. The postponement comes as authorities seek additional expert analysis to inform the investment strategy for this state-controlled hotel company, which is crucial for the coastal resort’s future.
The matter was addressed during a meeting of Montenegro’s Council for Privatisation and Capital Projects, where legal and financial evaluations of a restructuring proposal were discussed. This proposal was initially put forth by MK Group in October 2025, which currently holds a 33.58% stake in Budvanska rivijera.
The council reviewed a report from consulting firm Horwath & Horwath, which detailed two potential business models for the hotel group’s restructuring. However, the council determined that a final decision would require further technical assessments and consultations with local authorities in Budva.
Officials have pointed out that maintaining the current structure could diminish Budvanska rivijera’s competitiveness within the regional tourism market. According to council assessments, preserving the status quo could lead to a gradual decline in market position, necessitating substantial long-term investments to fully leverage the tourism complex’s potential.
Budvanska rivijera stands as one of Montenegro’s largest hotel operators, managing several significant properties along the Adriatic coast, including hotels and tourist complexes in Budva and Petrovac. Notable assets include the Slovenska plaža tourist resort and the Hotel Aleksandar complex, which together represent substantial accommodation capacities within Montenegro’s tourism landscape.
The restructuring proposal from MK Group outlines two strategic scenarios. The first involves a joint investment model between the state and minority shareholders, including MK Group, aimed at redeveloping existing tourism assets. The second scenario suggests dividing the company into two distinct entities, allowing for varied ownership structures and investment strategies tailored to specific hotel properties.
In this second model, hotels situated in Petrovac—such as Palas, Castellastva, and Crystal Palas—along with the Mogren hotel in Budva would largely remain under state control. Conversely, properties like Slovenska plaža and Hotel Aleksandar would be part of a new entity where MK Group could secure approximately 60% equity, while state ownership would be around 30%, with remaining shares allocated to minority investors.
The proposal also envisions redeveloping the Slovenska plaža site into a modern hotel complex featuring a congress center, underground parking, and enhanced green spaces designed as an open urban resort. However, this initiative has sparked public debate, with some critics expressing concerns over potential demolitions or alterations to existing structures at the site.
The government has emphasized that any restructuring must adhere to economic, environmental, and urban planning standards while safeguarding shareholder interests, employees, and local community needs in Budva. Given that tourism is a cornerstone of Montenegro’s economy, modernizing key hospitality assets remains a politically sensitive topic.
This decision carries significant implications for Montenegro’s overall tourism strategy. The Adriatic coast has seen rising international investments in luxury resorts and high-end tourism projects; however, many older state-owned hotel complexes require upgrades to compete with newer developments like Porto Montenegro and Luštica Bay.
Ultimately, the forthcoming decision on Budvanska rivijera is poised to influence not only the ownership structure of one of Montenegro’s major hotel groups but also the broader investment landscape along the Budva Riviera—an economically vital tourism area.
