The Ministry of Economic Development and Tourism (MERT), which in November planned to propose to the Government to approve a change in the business model according to which the five-star luxury tourist resort Liko Soho will be built in Bar, withdrew that proposal at the last minute from the session for revision.
News asked the minister Goran Đurović’s department whether it had decided regarding the request of the Ukrainian-Montenegrin company Liko Soho Group to build a hotel according to a mixed business model or if the hotel will be built according to a condo model, as well as what has been done so far within this project.
In October 2021, the government included the construction of the Liko Soho hotel in Bar on the list of development projects in the field of tourism as part of the economic citizenship project, where by purchasing an apartment you can get a Montenegrin passport, and according to the condo model. The value of the investment is more than EUR 60 million.
According to the Law on Tourism, the difference between a condo and a mixed hotel is that the owners of apartments in the condo hotel must make the apartments available to the hotel for renting out for 10 months a year, while in the mixed business model renting out is on a voluntary basis.
In 2019, the company Liko Soho Group concluded an agreement with the Government on the purchase and sale of real estate with investment investments in the Municipality of Bar, by which it committed itself to the investment obligation to build exclusive tourism facilities, namely a high-category hotel – 5 stars in accordance with the investment program, as well as the development the rest of the supporting content.
We would like to point out that MERT is not competent to make a decision on the business model of any tourist facility. Also, we emphasize that the investor is obliged to indicate to the competent authority when submitting the application for construction whether in the specific case it is a hotel with a condo model or a mixed business model – they said in this department.
MERT stated that depending on the application for construction and the final report on the facility’s suitability for use, the so-called use permit, the registration of the building in the real estate cadastre also depends.
After fulfilling these conditions, the interested party can submit a request for the approval of a hotel with a condo or mixed business model, with the conditions prescribed by Articles 96, 96a and 97 of the Law on Tourism and Hospitality – adding that when it comes to a specific project, MERT is responsible for monitoring the implementation of all projects that are on the list of development projects and informs the Government about all possible changes that occur in the projects. The Ministry did not specify what stage of construction this project is in, that is, what has been done so far.
According to the reports of the independent controller on the findings of the factual situation regarding the realization of the construction project of the Liko Soho hotel in Bar as of October 14, 2022, the company has invested 1,179,505 euros – they said in MERT.
The investor asked for consent to change the business model because the hotel should operate within a renowned global brand, which does not suit the condo business model or it conflicts with their brand, the business policy they represent. At a press conference in November 2021, the government announced that the hotel should be part of the world chain Radisson hotel group.
In the revised business plan that was submitted to the MERT, i.e. the Government, it was noted that the price of the accommodation unit had changed to EUR 5,000 per square meter, while in the previously submitted plan the price per square meter was EUR 5.4 thousand. In addition, the investor planned to increase the number of accommodation units from 322 to 409 different structures, of which 165 will be of the hotel type, and the remaining 244 of the apartment type.
The founder and president of the Ukrainian company Liko Holding and the investor of the project is Igor Lisov. He previously announced the construction of an aqua park, within which there will be sports bases for various forms of water sports.
Changing the business model would be more favorable for the state
In November, on the occasion of what they claimed was a negative media campaign, the Liko Soho Group stated that by changing the business model from condo to mixed, which is certainly more favorable for the country from several aspects, the company will reduce the number of apartments for sale from 322 to 244 and thus to offer a 5* hotel to the market, with 168 hotel rooms that cannot be sold by law, and which will operate throughout the year as a single entity owned by the company.
It is important to point out that we specified the condo business model in the business plan, which is part of the documentation for applying to the Economic Citizenship Program, while the model registration procedure in accordance with the Law on Tourism and Hospitality has yet to take place in the coming period. The choice of business model is the only and exclusive right of the investor, which is clearly defined by law, and which is the exclusive requirement of the brand – said the company’s executive director Ivan Krstajić at the time.
Sign up for business news updates & special reports.
