Montenegro is at a crossroads – either it will implement comprehensive reforms across all sectors of tourism and return to sustainability, or it will become a real estate destination where tourism will no longer play a significant role in employment, profits or national promotion. The biggest mistake was opening the country to foreign investment in real estate. Residential complexes are being built, but what is needed are hotels, campsites, and tourist resorts.
This was stated by Prof. Dr. Rade Ratković, dean of the Faculty of Business and Tourism in Budva, in an interview with eKapija. According to him, for tourism to progress, Montenegro must restructure its offerings, re-engage with tour operators, and return to Western European markets.
As of December 2024, there were 515 classified accommodation facilities in Montenegro, offering 50,770 beds. Among these, 39 hotels had 5 stars (7.6% of the total), with 5,577 beds (11% of total capacity), and 229 hotels had 4 stars (44.5%), with 27,071 beds (53.3%). The country also has 181 three-star hotels (35.2%) with 11,732 beds (23.1%), 58 two-star hotels (11.2%) with 5,946 beds (11.7%), and 8 one-star hotels (1.5%) with 444 beds (0.9%).
Between 2019 and 2024, there was a 56% increase in 5-star hotels and a 28% increase in 4-star hotels. These higher-quality hotels now make up 52% of the total number of hotels and 64.3% of the total bed capacity.
Despite the increase in high-quality hotels, Ratković emphasizes that the overall hotel capacity remains insufficient. Approximately 75% of the accommodation is secondary housing, such as apartments and weekend homes, while hotel rooms make up only about 10%. Ratković points out that nearly 500 hotels are disconnected and unnetworked, limiting their ability to access the market.
He stresses that the structure of the accommodation is problematic and calls for a restructuring of Montenegro’s tourism offerings. He mentions that tour operators are not showing interest in working with Montenegro due to the limited number of hotels.
Ratković proposes adopting the model of integrated and diffuse hotels, which would link apartments and secondary housing with hotels, offering services like 3-star hotels. He believes this model could quickly increase capacity and attract more tourists. He also suggests that the government create favorable tax policies to encourage owners to adopt this model.
He further notes that increasing the number of campsites, similar to Croatia’s successful example, could significantly boost tourism. This would create new capacity and enhance Montenegro’s attractiveness to tour operators.
Ratković believes that for sustainable economic growth, Montenegro must return to European markets, as the regional market alone cannot support long seasons or profitable operations. The lack of a model for hotel networking is a significant issue, and Ratković argues that integrating hotels and re-engaging international operators could quickly improve the situation without relying on large foreign investors.
Ratković acknowledges that the arrival of major global hotel brands could positively impact Montenegro’s tourism, but only if they build proper hotels, not just apartments. Management contracts, like those with Iberostar, have proven successful even during crises, maintaining high occupancy rates and competitive salaries.
Although the number of high-quality hotels is rising, many new projects, especially those financed through the economic citizenship program, are developing hotels under condominium or mixed-use models. While these investments promise faster returns, they don’t address the real tourism issues, as they often involve significant residential components. The chamber of commerce notes that tourism in Montenegro remains a low-accrual industry with high uncertainty, making investment difficult.
To further develop tourism, it is suggested to enable investment loans and create incentives for investors to focus more on quality accommodation rather than just residential units.
