The president of the Montenegrin Tourist Association (CTU), Žarko Radulović, stated that the Montenegrin tourism sector is on the verge of collapse due to increased value added tax (VAT), excessive fiscal burdens, and the lack of support and vision. He emphasized that there is still a chance to improve the situation, but only if there is “goodwill.”
Radulović described the current situation in tourism as extremely difficult and almost alarming. He pointed out that existing problems have been exacerbated by new taxes, with the most significant impact being the VAT increase on accommodation from 7% to 15%. This has doubled the obligations to the state, making it difficult for guests to afford the increased costs.
He warned that even if VAT were increased by 300-400%, it wouldn’t solve the budget shortfall. He believes this approach has missed the mark and that businesses will not see increased guests or revenue. Radulović argued that the government is pushing businesses into the gray economy instead of narrowing it.
He stressed the importance of starting the pre-season earlier this year to ensure a successful high season, as last year’s poor pre-season had a negative impact on overall results. Despite hopes for more flights from countries like Germany, Scandinavia, and Kazakhstan, he believes the current system is unsustainable for Montenegro’s fragile economy.
Radulović concluded by saying that tourism in Montenegro will continue to be chaotic and inefficient, without significant improvements, and that foreign labor will be filling vacant positions again this year.
