Montenegro’s tourism industry is facing a deepening crisis due to a combination of policy missteps, increased fiscal burdens, and lack of strategic direction, says Žarko Radulović, President of the Montenegrin Tourism Association.
He criticizes the government’s recent decision to raise VAT on accommodation from 7% to 15%, noting that the measure has failed to boost state revenue while burdening tourism businesses. “Even if VAT was raised by 300% or 400%, it wouldn’t fill the budget gap,” he states, highlighting a 4.2 million euro shortfall in expected February tax revenue.
Radulović warns that the current system is pushing businesses into the informal economy and discouraging investment. Despite the upcoming summer season, he says the sector is not aiming for growth but struggling for survival, with earnings likely to be minimal.
He describes the tourism policy as chaotic and unsustainable, especially for a small, fragile economy like Montenegro’s. He draws a comparison to Singapore, emphasizing that progress requires collective goodwill and vision—qualities he believes are lacking in Montenegrin politics, where personal and political interests often trump national development.
The Ministry of Tourism, he says, lacks the power to implement meaningful reforms, despite showing goodwill. Without a clear long-term strategy or qualified workforce, Montenegro’s tourism has regressed since 2019, with no real progress made in the past five years.
Radulović also highlights the ongoing labor shortage, with domestic workers seeking opportunities abroad and foreign workers filling the gap. He stresses the need to make tourism careers more appealing to young Montenegrins.
Although there is an increase in seasonal flights from countries like Germany, Poland, and Kazakhstan, Radulović warns this won’t be enough to achieve significant results. He praises individual efforts to improve air connectivity but notes that political interference remains a barrier.
He also expects delays in beach preparations due to bureaucratic inefficiencies, as seen in previous years. His final message to authorities is blunt: “Everything you’ve done so far isn’t good. If you don’t recognize the mistakes, we will keep failing”.
