Access the main content


Montenegro draws investors’ attention

The little principality in the Balkans has made a remarkable foray into the club of popular destinations. An independent Republic since 2006, it emerges from ex-Yugoslavia and its association with Serbia to exist with a strategy that recalls that of Monaco and Mauritius. It wants to encourage upscale tourism targeting the wealthy, combining history and its thousand-year-old heritage, the bling of coastal resorts and the diversity of inland landscapes. Shrewd private investors also decided to support this strategy such as Bernard Arnault, Chairman and CEO at LVMH, Peter Munk, Canadian billionaire, Nathaniel Rothschild and the Russian oligarch Oleg Deripaska. Today they are bound by institutional funds that are prepared to support the movement with a focus on upscale tourism infrastructures.

Slightly larger than Corsica, Montenegro benefits from its location on the Adriatic and mountainous inland region, combined with the presence of the park at Lake Shkodra. These assets mean the country has a number of cards at hand to develop its originality in Europe’s tourism landscape. Its success took off thanks to the poker game scene in Casino Royale, Daniel Craig’s first stint as James Bond, which was supposed to take place there, but was actually filmed in the Czech Republic. No matter: the destination resounded throughout Tourism with a series of references straight out of King Ottokar’s Sceptre, Hergé’s iconic Tintin comic-strip album.

A principality in the 17th to 19th centuries, Montenegro had the clever idea of calling on the heir to the former reigning family Petrović Njegoš, Nicolas II, a French architect born in Brittany. The heir accepted to return to and live in the country of his ancestors as ambassador to the destination and testimony to its historic heritage. In the 20th century, Montenegro was considered a part of the Federal Republic of Yugoslavia, and then Serbia. After the dissolution of the Federal Republic, Parliament officially proclaimed the country’s independence. Since 2010, the country has been an official candidate to the European Union, whose currency it adopted together with its independence to mark its break with its neighbors. Introducing his strategic Montenegro Tourism Development Strategy to 2020, the Minister of Tourism and Sustainable Development, Branimir Gvozdenović, insists: “We are aware that tourism in Montenegro has reached a critical crossroads while its growth rate surpasses the development of physical infrastructures and human resources, and the competitive environment promotes new destinations and new products. It is in this direction that we wish to move to avoid falling in the trap of homogeneity of offers and their banalization.”

The plan 2020 has set five complementary goals resulting from the observation that the current tourism economy is still young and based on a multitude of small businesses with an initial emergence of sizeable operators with international reach. The priorities are thus to 1) create the infrastructures for lodging and transportation that are missing throughout the country, 2) promote the destination’s originality, 3) make it a year-round destination thanks to its 240 days of sun annually, 4) reinforce the legal and regulatory framework to facilitate investments within an eco-friendly approach, and 5) increase the involvement of the population through greater awareness of the opportunities offered by the sector and an increase in skilled employment in the branches of tourism.

There is no shortage of challenges for local authorities to take on, because until now, tourism has remained very seasonal and 83% of international arrivals in 2015 took place between June and September. This resulted in a marked interest in beach resorts particularly in Budva, Herceg Novi, Ulcinj and Bar. There was also a concentration from neighboring and culturally similar countries that brought one third of visitors from Serbia and Bosnia and Herzegovina, 30% from Russia, 15% from the Ukraine, Poland and Belorussia. Western Europe, primarily Germany, Italy and France (46,000 visitors in 2015), represents more than 8% with strong growth on the more modest results.

Airports in Podgorica, the capital, and in Tivat, near Boka Bay and major shoreline resort areas, are included in a two-phase investment plan until 2030 for a forecast budget of €80 million each. There is a possibility of increasing the current capacity from 1.1 million passengers through Podgorica to 2.9 million in 2025 and 3.2 million in 2030; and that of Tivat from 920,000 in 2015 to 1.37 million in 2025 and 1.42 million in 2030.

The plan also includes major investment in the coastal highway: from Trieste to Kalamata, through seven countries across 1,500 km (Italy, Slovenia, Croatia, Bosnia and Herzegovina, Montenegro, Albania and Greece) for an estimated cost of €950 million. It will make it easier to access Montenegro’s beach resorts from nearby countries.

Hotel development is another government priority due to the country’s under-capacity. Recent statistics show that Montenegro officially has 350 hotels and residence hotels, mostly in the 2* economy category, or some 70,000 rooms and apartments for 175,000 beds. This capacity can be easily doubled by adding secondary and private residences that offer short-term rentals. However, the volume and quality of commercial accommodations is not up to par with its ambitions. Most projects underway aim to improve the range of the hotel supply. The strategic plan for 2020 sets a goal for 280,000 commercial beds, including 100,000 beds in superior categories and 110,000 others in suites. The target is for 26 million foreign nights, with at least 70% at hotel properties, corresponding to the creation of 75,000 new jobs.

The Adriatic Coast is the country’s leading attraction and has the strongest development of infrastructures, particularly around Boka Bay and the resort town of Kotor, which was ranked among ten unmissable destinations by Lonely Planet for 2016. Deep in its bay, protected by the surrounding mountains, Kotor is becoming a leading port of call for cruise ships in the Mediterranean and Adriatic. The old city is on UNESCO’s World Heritage list and is a starting point for excursions into the area’s mountainous region.

The biggest development underway is located a few kilometers away, near the opening of the sea maze leading towards Kotor, across from Tivat airport, with the ex-novo creation of Porto Montenegro. This ambitious project launched by a quartet of billionaires (Arnault, Munk, Rothschild and Deripaska) was taken over by Dubai’s sovereign fund. The initial 250-mooring marina grew to 480 moorings with a series of tourism infrastructures to accommodate the biggest yachts, their wealthy owners and rich guests. Already referred to as the Adriatic St Tropez, Porto Montenegro is a “village” designed by ReardonSmith Architects, including 130 luxury residences, a 20-boutique mall, athletic installations, a yacht club with a 64 m long swimming pool overlooking the sea, a naval museum and a Regent Hotel with 90 rooms and suites.

In Kumbor, overlooking the bay of Tivat, Kerzner International has contracted with Triangle Investment & Development Ltd to develop and manage a new One&Only resort of 150 luxury rooms and villas, including a residence with private marina, a tennis school, a spa, restaurants and retail shops. The project spreads over  24 ha between mountains and the sea along a 1.2 kilometer of sandy beach on the Adriatic. This will be the first One&Only resort in Europe, only one hour away from the international airport of Dubrovnik.

Boka Bay will receive another major investment, through Metropol Development, a Russian developer that has set its sights on Sveti Marko Island to make it the first 6* resort in Europe. This island currently has no installation and is protected by far-reaching eco-regulations of the government of Montenegro; it will nonetheless welcome 108 luxury residences and 120 other keys to bungalows and hotel suites, 3,000 m² of shops and 120 moorings.

Two cables away, at the foot of Tivat, the sovereign fund Qatari Diar, which plans to invest $250 million in a 5-star resort, baptized Blue Horizon, with Mediterranean design for several hotels, villas, a spa, athletic installations, boutiques, restaurants and bars. Also on the Adriatic coast, in Traste Bay near Boka Bay, on the peninsula of Lustica, the Egyptian group Orascom Development has undertaken a Pharaonic program of 690 hectares on a former military area. The ground plan is to develop a veritable new coastal city with 14 residential areas including 500 villas, residences with 1,000 apartments to sell or rent, 7 hotels including a Chedi, a thalassotherapy center, a golf course, shops, and finally one or two marinas. The one-billion-euro project will continue until 2028.

Further south along the coast, in the towns of Budva and Bar, the Royal Group, from the United Arab Emirates, planned to build two tourist complexes with hotel and spa for a budget of €180 million. Already present in Budva as owneroperator of Sveti Stephan Island, Aman Resorts group is growing its presence beyond the private peninsula with the renovation of the Milocer Hotel on the mainland and the addition of suites on Queen Beach. Because of its discretion, Sveti Stephan is a refuge destination for sports and show-biz celebrities and appears on all promotional flyers as a symbol of luxury tourism.

The major projects don’t stop there; the town of Ulcinj should host “Velika Plaza”, a complex to be developed on 1,450 hectares along 13 km of fine beaches.

The only deluxe hotel will occupy a 400-kilometer stretch of beach and be able to host more than 25,000 clients with recreational and leisure equipment. The global budget is evaluated at €6.5 billion. The project is being led by Van Den Oever, Zaaijer & Partners, a Dutch architect-developer that has been struggling until now to mobilize investors. Although it is currently on stand-by, Velika Plaza has not giving up on existing one day. Other sites that could receive calls to tender have been identified by the Minister of Economic Development. These are the delta of the river near Ada Bojana, a 500 ha terrain to build a 4 or 5* eco-tourism complex; Valdanos Bay, a wooded military terrain of 320 ha is available for a luxury resort with villas dispersed in the surrounding nature or even Jaz Bay with its sandy, one-and-ahalf kilometer beach.

As part of its strategy to prolong the tourist season, the Montenegrin government also wants to encourage investment inland, as in the case of the tourism development on Crno Lake, at an altitude of 1,500 m in Durmitor National Park. In the north of Montenegro, the mountainous region of Bjelasica and Komovi covers around one quarter of the country and yet has no tourism development. The strategic plan identified a dozen suitable locations to develop ski resorts. A call to tender was launched with Russian investors who developed the project for the Olympics resort in Sotchi.

The trend is underway and major hotel groups are participating in calls to tender alongside developers and promoters. Until now they were not very well represented, with exception to Iberostar and Best Western. Since the arrival of Regent in Porto Montenegro, Kempinski is already working with the local group Soho Hotels for a resort on 20 ha with a hotel and 52 luxury villas in Sutomore, near Bar. The group Hilton Worldwide will hang its banner on the 180-room (20 suite) former Crna Gora hotel, a veritable institution in the capital of Podgorica. Located at the confluence of the Zeta and the Moraca, the city has no noteworthy monuments, but several ancient relics, picturesque Turkish remains and the 10th century Saint George’s Church.

To accompany hotel development, Vatel Group, specialized in hotel management training, opened a new school for its network in the capital of Podgorica.

Now that it is under the spotlight, Montenegro relies on a strategy that favors investments, political stability and its forthcoming integration in the European Union to accelerate its economic growth based on tourism development in all possible segments, from beach resort to ski resort, from thalassotherapy to seminars, from sports to culture.

Register for free access to the rest of this article

Register for an account to access exclusive content


Already registered?


Vous avez consulté 10 content. Go back home page or en haut de la page.

Access next article.

Sign up to add topics in favorite. Sign up to add categories in favorite. Sign up to add content in favorite. Register for free to vote for the application.

Already signed up? Already signed up? Already signed up? Already registered?