Montenegro's fledgling tourism industry poised for success

Just two years after the inception of a tourism masterplan in the tiny European country of Montenegro, the sector reports considerable advances. Visitors from EU countries increased by an average of 15% in 2003 and 2004, and the summer months of 2005 saw visits from France increase six-fold and from Finland ten-fold, while arrivals from Italy were up 66%, Austria 58%, and Russia 99%. Already, tourism accounted for 15% of Montenegro's GDP in 2004 - the target is 22% by 2015. Overnights are expected to grow from the current 5 million to 11.4 million by 2010 and 20.8 million by 2020, creating a EUR1.5 billion tourism industry.

There is already strong inward investment in the hotel sector - EUR196 million in the past two years - and 90% of hotels are now privatised. Particularly encouraging for Montenegro's tourism planners, who are trying to develop their country into a destination appealing to mid-/upper-class markets, is the interest shown by luxury hotel groups. These include Aman Resorts, which has tendered to invest at least EUR24 million to modernise and manage three of the country's most prestigious hotels including the former royal summer residence. MICE business is also a target, and Spanish group Iberostar will add conference and wellness facilities, as well as 700 beds, by summer 2006 at its beach resort near Budva,

By 2008, the country's current 26,000 bed count will expand by a further 8,000-10,000. The masterplan calls for 50,000 beds by 2010 and 100,000 in 2020. Eight coastal greenfield sites have been approved for hotel development, along with several locations for new marinas, and a new access tunnel linking the hotel sites to Podgorica airport was completed this year. Both Podgorica and Tivat airports are being upgraded and expanded (completing 2006), and efforts are being made to open the skies to low-cost airlines and to expand existing air capacity and frequency. Also positive is the government's decision to reduce VAT from 15% to 7% for packages sold abroad, and to extend the no-visa regime.