Hotels and other accommodation providers in Montenegro saw a significant revenue surge last year, totaling 560 million EUR. This marks a hundred million increase from 2022 and a substantial 240 million rise compared to 2019. April of this year marked the completion of the categorization of 499 hotels, highlighting notable growth in the number of four and five-star establishments, along with an increase in bed capacity. Currently, 10.8% of beds are housed in five-star hotels, up from 7.6% in 2019.
These figures, detailed in the latest issue of Top Business Montenegro magazine by BI Communication, reveal insights into the industry’s dynamics.
Leading in accommodation capacity is state-owned Budvanska rivijera with nearly 3,500 beds. Following closely is the Montehos group, owned by businessman Žarko Rakčević, managing 2,989 beds across five hotels, achieving the highest reported profit of 8.7 million EUR and contributing significantly to tax revenues.
Portonovi Hospitality Management Company topped the revenue charts in 2023, with its luxury One&Only hotel in Portonovi generating 32.7 million EUR in revenue and a net profit of 4.9 million EUR. Hotels Group Montenegro Stars, including the renowned Splendid in Bečići, followed with 27.2 million EUR in revenue and a profit of 1.7 million.
State-owned Budvanska rivijera secured the third spot with revenues of 24.3 million EUR and a profit of 1.9 million.
The workforce in hotel companies grew to 9,400 employees last year, up by 2,700 compared to 2019 and by 1,400 compared to 2022.
Sanja Marković, Secretary of the Tourism and Hospitality Association Committee at the Chamber of Economy, emphasized the categorization of 37 five-star hotels this year, constituting 7.4% of all categorized hotels.
Since 2019, the number of five-star hotels has increased by nearly 50%, from 25 to the current count. These hotels now boast 5,300 beds, up by 60% from 3,300 beds in 2019.
There has also been substantial growth in four-star hotels, rising from 179 to 214 establishments, with bed numbers increasing from 20,900 to 26,300, a 25% increase. Currently, 53% of all beds are in four-star hotels, compared to 48% in 2019.
In 2019, Montenegro had 166 three-star hotels, now numbering 183, with bed numbers rising to 11,700 from 10,700.
Conversely, the number of two and one-star hotels has declined, along with their bed capacity. There are now eight one-star hotels, down from 14 in 2019.
Marković highlighted the imperative of enhancing the quality of tourism offerings through the development of new high-quality accommodation facilities and increasing the share of hotels in total capacity. She stressed the importance of occupancy rates as a key metric of sector success, reflecting the ratio of occupied to available rental units.
In Montenegro, hotel occupancy rates range from 26.3% in November to 78.9% in August, underscoring high seasonality. Comparative Eurostat data shows average occupancy rates from March to November 2023 at 63.67% in Spain, 56.91% in Croatia, 53.44% in Italy, and 52.24% in Greece, with Montenegro at 49.08%.
Despite Montenegro’s model of mass summer tourism with higher prices, Marković noted a marginally lower profit due to elevated operational costs.
Total tourism revenues in 2023, according to the Central Bank of Montenegro, surged to 1.515 billion EUR, marking a 44% increase from 2022 and a 38% increase from 2019. This growth was partly driven by inflationary price adjustments. Tourism’s contribution to GDP reached 22.13% in 2023, underscoring its pivotal role in the Montenegrin economy.
However, Marković acknowledged challenges such as the sector’s extended return on investment periods, higher interest rates, and short- to medium-term uncertainties, making investment complexities. To further bolster Montenegro’s appeal as a tourist destination, she advocated for extended-term investment loans, enhanced investor attraction efforts, and a more conducive business environment.
In the hospitality sector, cafes and restaurants reported a combined revenue of 422 million EUR last year, up from 193 million EUR in 2019. The number of hospitality firms increased from 1,870 to 2,669 during this period, influenced by factors including inflation, expanded hospitality outlets, increased spending by foreign visitors, and stricter fiscalization and VAT control measures.
Leading the revenue charts in this segment last year was Podgorica-based PaneVivo, generating 11 million EUR in revenue and a net profit of 1.1 million EUR. Following closely was Food Style MNE from Porto Montenegro in Tivat, with revenues of 5.5 million EUR and a profit of 596 thousand EUR.
