Montenegro is witnessing a significant shift in its economic landscape as large-scale tourism projects evolve into vital service-sector multipliers. Unlike traditional real estate developments, these initiatives are increasingly driving sustained demand for various business services, professional services, and operational outsourcing that accompany long-term tourism assets.
One notable example is the EcoVillage Shas project, which has an estimated capital expenditure of €180–320 million and projected annual operating revenues ranging from €60–95 million. This development is expected to create ongoing demand for a wide array of services, including facility management, IT systems, accounting, and environmental monitoring. Based on similar projects in Montenegro, it is anticipated that 12–18 percent of annual operating expenditures will be allocated to outsourced business services, translating to approximately €7–17 million in recurring service contracts once the project reaches maturity.
The implications of this scale are particularly significant for Ulcinj and southern Montenegro, where the existing base for business services is limited. Unlike other high-profile developments such as Porto Montenegro or Luštica Bay that rely heavily on international service providers, EcoVillage Shas is designed to encourage local service provision due to its cost-sensitive and labor-intensive nature. This approach opens up opportunities for local small and medium-sized enterprises (SMEs) in sectors like cleaning, catering logistics, and guided experience operations.
Over a projected 5–7 year period, such developments typically lead to the formation of secondary service clusters that could employ between 300 and 600 individuals, with average gross wages ranging from €900 to €1,300. This represents a substantial increase over the current municipal average in Ulcinj and serves as a clear mechanism through which tourism investment can enhance durable non-tourism business capacity.
In terms of employment elasticity, EcoVillage Shas is expected to create between 900 and 2,300 permanent operational jobs, significantly higher than the approximately 500 high-productivity jobs supported by Porto Montenegro. When factoring in indirect employment, total local labor absorption could reach between 1,600 and 3,800 positions. Assuming average net wages of €10,500 to €14,500 across various roles, the total household income injected into the Ulcinj economy could range from €17 million to €55 million annually.
With empirical consumption multipliers indicating that 65–75 percent of net wages are spent locally, this development could generate an additional €11 million to €41 million annually in demand for retail and personal services. Such economic activity has the potential to stabilize local markets by transforming seasonal businesses into year-round operations and reducing income volatility.
The fiscal implications at the municipal level are also noteworthy. EcoVillage Shas would enhance Ulcinj’s recurrent revenue base through local surtaxes on personal income and property taxes. Conservative estimates suggest that direct annual municipal revenue could increase by €4–7 million, potentially rising to €8–10 million under higher-activity scenarios. This represents a significant boost over Ulcinj’s current annual revenues.
At the state level, the fiscal importance of EcoVillage Shas lies in its capacity to generate recurring tax streams rather than relying solely on one-time fees from privatization or concessions. With annual operating revenues estimated between €60 million and €95 million, VAT contributions alone could reach between €12 million and €20 million per year. Cumulatively over a decade, state-level fiscal receipts could total between €250 million and €450 million.
Moreover, projects like EcoVillage Shas serve as accelerators for improving the business environment. International operators impose standards that local suppliers must meet in areas such as procurement transparency and environmental compliance. This pressure can elevate local firms’ capabilities and enable them to compete for contracts beyond their immediate region.
However, challenges remain. The availability of labor is a pressing concern as Montenegro grapples with shortages in hospitality and skilled trades. Additionally, infrastructure capacity issues could hinder progress if not addressed with parallel public investments estimated at €25–40 million. Governance risks also persist due to heightened scrutiny surrounding projects in southern Montenegro.
In conclusion, the transformative effects of large tourism projects like EcoVillage Shas highlight their potential as economic platforms rather than mere resorts. Their impact extends beyond visitor numbers or real estate values to foster deeper business services integration and municipal fiscal stability. The success of these initiatives will depend on effective management of labor policies, infrastructure investments, and governance challenges.
