Once a symbol of luxury and the crown jewel of Montenegrin tourism, the iconic island-hotel Sveti Stefan remains closed on its 65th anniversary. Despite several announcements, there is still no confirmation of when or if it will reopen — not even tennis legend Novak Đoković could change that.
Since 2021, Sveti Stefan has been off-limits to tourists due to a dispute between the Montenegrin government and the hotel’s leaseholder, Adriatic Properties. The disagreement centers around access to the island and beaches for non-hotel guests. The matter, estimated to be worth €100 million, is currently in arbitration in London, with a verdict expected at the end of July.
Local officials and tourism experts say the prolonged closure of Sveti Stefan symbolizes the broader decline of Montenegro’s tourism sector. They warn the hotel is deteriorating and could suffer further damage if a resolution is not found soon.
Despite official figures showing over 130,000 tourists in the country, many in the tourism industry say the season has been disappointing. Montenegro reportedly has about 500,000 beds available, but current occupancy is far below that capacity. Comparisons to the 1990s — when the country logged 10 million overnight stays — highlight the stark contrast to today’s numbers, which struggle to surpass 1.5 million.
Budva, a key tourist destination, has seen mixed results. While visitor numbers are up slightly compared to last year, overnight stays have declined by 4%. Tourists primarily come from Germany, Serbia, France, the UK, and several other countries.
Analysts argue that Montenegro is losing ground to regional competitors like Albania, which has emerged as a rising tourism hotspot due to better planning, infrastructure, pricing, and hospitality offerings. Without serious reforms and strategic direction, many fear Montenegro’s tourism appeal will continue to fade.
