The redevelopment of Hotel Galeb in Ulcinj remains on hold pending government approval of revised planning documentation, leaving a multimillion-euro tourism investment without a confirmed construction schedule.
The investor, Sunny Palace, based in Kotor, is awaiting completion of the planning process after years of project preparation and discussions with a prospective international hotel operator.
The proposed development has already undergone significant changes following objections concerning building density, coastal views and compliance with higher-level planning documents. The investor reduced the planned building height from 15 to 11 storeys.
Revised planning documentation was submitted in July 2024, and the public-consultation report was completed in September 2025. Final government approval remains outstanding.
The framework defining the investor’s obligations was established by the government in June 2022, with the project initially expected to move towards operation by 2027. The planning delay has put that timetable under pressure.
No construction permit, financing agreement or confirmed construction start has been announced.
Ulcinj has considerable potential for tourism development but has historically attracted less high-end hotel investment than Budva, Tivat and Kotor. A new internationally operated hotel could increase accommodation standards, attract higher-spending visitors and support longer tourism seasons.
Municipal representatives raised concerns about building density and the project’s compatibility with broader planning documents. The ministry responsible for spatial planning accepted some of these objections, prompting revisions to the development scheme.
Despite the reduction in the proposed building height and the completion of the public-consultation process, the investment remains unable to advance.
The unresolved planning procedures also affect the project’s financial prospects. Capital allocated to land, design, consultants and project preparation remains tied up, while construction costs and financing assumptions may change during the delay. Uncertainty over the opening schedule could also affect the prospective hotel operator’s involvement.
For banks, unresolved development rights, final building parameters and permitting schedules make it difficult to establish the conditions required for financial close.
The project also involves coordination between tourism investment, municipal planning and infrastructure requirements. Large-scale hotel and residential developments place additional demands on roads, water supply, wastewater treatment, electricity networks and municipal services, making cooperation between the state, local authorities and developers important.
If the revised planning documentation receives approval, Hotel Galeb would still need to proceed through permitting, financing, contractor appointment and potentially the finalisation of an international hotel operating agreement. The redevelopment therefore remains dependent on a series of outstanding steps, with final planning approval representing the next major milestone.
