Montenegro’s tourism sector appears to be experiencing a downturn this year compared to the previous one, according to analysts. This trend is particularly noticeable in the decrease of accommodation tax collections from private accommodations, suggesting a drop in guest numbers, as highlighted by Prof. Dr. Rade Ratković, Dean of the Faculty of Tourism and Business, in an interview on Television E’s “24 Hours” program.
Ratković emphasized the need to confront the reality of the situation rather than indulging in unfounded claims of record-breaking achievements. He predicts that Montenegro’s tourism season will end with a loss of approximately twenty million euros, similar to previous years.
The dean noted that many hoteliers had prepared their establishments expecting higher-spending guests. Instead, they have received guests with lower purchasing power, primarily from the region and local areas, who are unable to afford the high prices. While these prices might be justified with European tourists, the lack of such visitors and the absence of new market offerings raise concerns for the next season.
Ratković criticized the coastal area’s chaotic state, comparing it to an ethnographic fair rather than a well-managed tourist destination. He noted that instead of modern, paved roads, vehicles are navigating cobblestone streets, and the application of foreign models that do not fit the local context is problematic. He concluded that those responsible for managing tourist destinations are failing to meet expectations.
The proposed increase in VAT on accommodation from 7% to 15% is expected to reduce competitiveness and drive up prices, signaling that tourism is merely a nominal priority. Ratković observed that Montenegro’s tourism sector is increasingly being overshadowed by real estate developments, with around 70% of the accommodation capacity consisting of apartments and secondary residences. Many hoteliers are considering closing their hospitality businesses and focusing solely on renting out accommodation.
To address these issues, Ratković calls for significant structural reforms in tourism. He advocates for urgent updates to tourism legislation, including clearer division of responsibilities, transforming destination management into a public-private partnership, and implementing the marketing strategy from 2019. Without these changes, he warns that Montenegro risks losing its tourism sector altogether.
