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DESTINATION OF THE FUTURE - A region that welcomes the world
Ranko Jovović, President of the Board of the Tourism and Hospitality Association of the Chamber of Commerce of Montenegro: Apartments fill the statistics, premium hotels fill the budget
Ranko Jovović (Photo: Privredna komora Crne Gore)
This was said in an interview for eKapija by the president of the Board of the Tourism and Hospitality Association of the Chamber of Commerce of Montenegro, Ranko Jovović, while pointing out that the strategic focus in the coming period must be the transformation of the growth model - from quantitative to revenue.
Jovović sees the greatest development potential in the premium segment, sustainable tourism, health and wellness offerings, as well as active tourism in the north of the country. He warns that intensive and uncontrolled apartment building on the coast represents one of the most serious limitations of the long-term competitiveness of Montenegrin tourism. That is why Montenegro needs new hotels, especially high category hotels under international brands, which can raise the service standard, generate stable employment and increase the fiscal effects of tourism.
As key directions of action, he sees the extension of the tourist season, strengthening of the hotel sector, operational development of the north and decisive management of space.
How do you evaluate the tourism results of Montenegro in the last year - are you satisfied with both the structure and the income? Has the growth in arrivals been accompanied by the growth in consumption per guest?
- Tourism results in terms of physical volume - number of arrivals and overnight stays - can be assessed as stable and to some extent satisfactory, especially bearing in mind the recovery of the key emission markets and the overall dynamics of tourist traffic. However, the essential evaluation of the success of a tourist year cannot be based exclusively on quantitative indicators, but primarily on income and structural effects.
The growth in arrivals did not follow a proportional increase in consumption per guest, which clearly confirms that Montenegrin tourism is still dominantly based on the price-sensitive demand segment. Such a model generates traffic, but it does not generate sufficient added value either for the economy or for public finances.
One of the key structural issues remains the relationship between private and organized accommodation. With the dominant participation of individual and residential accommodation, it is difficult to expect a stronger income growth, an extension of the season or a significant increase in the fiscal effects of tourism. The hotel sector, especially higher category facilities, is the only one with the capacity to generate higher consumption, stable employment and long-term investment value.
That is why it is important that tourism development is measured through revenue per guest, added value and total economic effects, and not only through the statistics of arrivals. Quantity without structural change does not mean development.
What are the expectations of tourism entering this season? What are the key risks that could influence this year`s results?
- Tourism enters the season with cautious optimism, but in a significantly more complex and uncertain environment than in previous years.
Inflationary pressures in key emission markets directly affect the available budget of tourists, which makes Montenegro, as a price-sensitive destination, particularly vulnerable. Geopolitical instabilities additionally affect travel safety and the dynamics of reservations, while disruptions in air availability may redirect the flow of guests.
Internally, labor shortage remains one of the most critical operating constraints, with a direct impact on the quality of service and the reputation of the destination. At the same time, infrastructural limitations - above all, traffic loads, border flow and utility capacities – are already showing the limits of endurance during peak season.
A special challenge is to maintain price competitiveness in relation to the countries of the region which actively adjust fiscal rates, subsidies and promotional budgets for tourism. If there is no strategic and coordinated response, the risk is not only a weaker result of one season, but a gradual loss of the market position of the destination.
What are the greatest structural weaknesses in Montenegrin tourism today? Can Montenegro truly become a year-round destination and under what conditions?
- The biggest structural weakness of Montenegrin tourism remains its marked seasonality. The concentration of income and tourist traffic in the narrow summer period creates an unstable economic model, makes investment planning difficult and produces a chronic labor force deficit.
Another serious problem is the unfavorable housing structure, which is dominated by private and residential accommodation. This capacity ratio limits the possibility of extending the season, quality standardization and increase in spending per guest. Without a strong hotel sector, there is no fundamental transformation of the tourist model.
Additionally, insufficient diversification of the tourist product, along with infrastructural limitations and insufficient valorization of the northern part of the country, they slow down development. The north of Montenegro, although it has considerable potential, does not yet have investment and operational dynamics which could alter the overall structure of tourism.
Montenegro can become a year-round destination, but only with a clear strategic turn - development of off-season segments, strengthening of the hotel offer, improvement of infrastructure and consistent management of space. Without this, year-round tourism remains a development ambition, not an economic reality.
Where do you see the greatest development potential - in the premium segment, sustainable tourism, specialized niches? Which destinations or regions in Montenegro are not sufficiently valorized today, and do they have real potential to become strong carriers of tourism growth and diversification of offer in the coming period?
I see the greatest development potential in the premium segment, sustainable tourism, health and wellness offer, and active tourism in the north of the country.
The north of Montenegro represents a key development opportunity for extending the season, diversification of the tourist product and more balanced regional development, but it requires a stronger investment cycle, infrastructural improvement and a clear development policy.
How much does dominance of private and residential accommodation, together with the intensive apartment development of the coast, affect the destination`s long-term competitiveness, and has that development model already reached the limit of sustainability?
- The intensive and uncontrolled apartment building of the coast represents one of the most serious limitations of the long-term competitiveness of Montenegrin tourism.
Although it increases capacity in the short term and generates quick income, long-term consequences are degradation of space, pressure on infrastructure, the decline in average consumption and the collapse of the structure of tourist demand
Apartmentization produces quantity, but it collapses the value of the tourist product. Without a strong regulatory turn and prioritization of the organized hotel industry, we risk permanent erosion of the quality and market position of the destination.
Does Montenegro have enough classic hotels and how do you assess the quality of the existing hotel offer? In what way could the building of new hotels and the development of organized hotel industry be encouraged?
- Montenegro does not have enough hotels, especially high-end hotels and international brands. Without changing the accommodation structure, there is no change in the revenue structure of tourism.
Stimulating fiscal measures, a stable investment environment, available funding sources and more efficient administrative procedures are needed to encourage investments.
How much does the current tax and investment policy stimulate or discourage serious hotel investments? To what extent does the amount of VAT on tourist services affect the competitiveness of the domestic hotel industry in relation to the region?
The tourism product is one of the extremely price sensitive products that require long-term planning. Fiscal policy is therefore not only a budgetary issue, but a strategic issue of state competitiveness.
Reviewing the amount of VAT, the overall fiscal burden, the introduction of stimulus measures for the hotel sector and a more decisive suppression of the gray economy are the key prerequisites for investments, employment and competitive growth.
Tourism has been facing labor shortages for years, and one of the solutions to this problem, which has been talked about for years, is the introduction of the "permanent seasonal worker" category. The government has recently established the Bill on permanent seasonal work. How do you rate this legal solution? Will the proposed law respond to the needs of the tourism industry and to what extent?
- The introduction of the category of permanent seasonal worker represents a positive institutional step forward because it systematically recognizes the specifics of the tourism labor market.
However, according to the views of the economy, the proposed model is not yet flexible enough in terms of engagement duration, operational procedures and total labor costs. It can be part of the solution, but without additional adjustment it will not give the full effect.
At the conference "New Days of Better Tourism" organized by the Chamber of Commerce in December one of the conclusions was that the national project "Premium Tourism of Montenegro" should be established. Could you tell us more about this concept and what the project would entail?
Premium tourism implies the development of luxury facilities, raising service standards, sustainable space management and stronger international branding of the destination.
Less pressure on space, but higher consumption per guest - this is the development direction that generates the greatest added value.
What, in your opinion, should be the key priorities and directions of strategic development of tourism in 2026 to ensure a long-term sustainable, competitive and economically stable system?
The strategic focus must be the transformation of the growth model – from quantitative to revenue.
Extension of the tourist season, strengthening of the hotel sector, operational development of the north and decisive management of space represent the key directions of action.
Without transitioning to sustainable and high-value tourism, there is no long-term competitiveness or economic stability of the tourism sector.
Dragana Obradović
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