PAVLE RADULOVIĆ, Montenegro’s Minister of Tourism and Sustainable Development: INTERNATIONAL BRANDS BOOST COMPETITION

Last year, for the first time ever, we exceeded the limit of one billion euro of tourism revenue, but we look at the moment only as a step forward

Montenegro stands shoulder to shoulder with the leading, elite tourist destinations. Investing in tourism is a priority. In the first four months of this year, according to official data, German tourists occupy the first place in terms of tourism revenue generated in collective accommodation with the number of tourist arrivals from Germany being five times higher than in the same period last year. A large number of tourists from Austria, France, Great Britain, Sweden, Turkey and Croatia have been registered too. The total assigned revenue, which includes income from the residence tax, membership fees, and tourist tax, collected since the beginning of the year, amounts to 891.38 thousand euros, which is 20.9% higher in relation to the comparative period. We have talked to Montenegro’s Minister of Tourism and Sustainable Development, Pavle Radulović about further expectations, everything that has been done in tourism so far and the upcoming period.
Summer season is upon us. Do you think that 2019 will be a record year for tourism and what revenue do you expect?

– In the last few years, both summer and winter season in Montenegro have been starting earlier and lasting longer, so it is very difficult to discern when the winter post-season ends and summer pre-season begins, and whether its end ctually means the beginning of a new winter cycle. That is precisely why the preparation for the period when the biggest number of tourists resides in our country, started last year. From the beginning of the year to the end of April, about 44% more tourists stayed in hotels in Montenegro compared to the same period the previous year, which was a record year. This data, as well as data on announced reservations and new flights, give us the reason for optimism, so we expect that all tourism parameters will increase significantly this year. Montenegro will be connected by air to 68 destinations this year, and we expect this number to increase in the coming years. Last year, for the first time ever, we exceeded the limit of one billion euro of tourism revenue, but we look at that moment only as a step forward. We have more potential for growth and we expect this year to generate revenues significantly above 1 billion euros.

Extending the season is one of the priority goals of all tourism officials. What should be done in order for this goal to be accomplished?

– The extension of the season is very important to us both because of our strategic goal and the fact that the system is quite encumbered during the season’s peak. The diversification of offers and putting the focus on forms of tourism that do not depend entirely on summer and nice weather are crucial. Festival, rural, cultural, active and conference tourism bring guests in before and after the season, and the Ministry support such tourist offers through the Incentive Measures Programme. This year, close to 800,000 euros was allocated for the programme. I must point out that we are getting better results in the period after the season, and that the tourism industry is developing its offer in order to attract tourists throughout the year.

In 2018, 25 new hotels were opened, of which 15 hotels are four- and five-star. Is Montenegro striving towards becoming an elite tourist destination?

–  Montenegro’s strategic goal is to become top quality, year-round tourist destination and all our activities, and even the results, are geared towards this goal, which is slowly being accomplished. Today, Montenegro has 21 fivestar hotels with nearly 3,000 beds and 162 four-star hotels with over 19,000 beds, while several more projects are in the preparatory stage. The Economic Citizenship Programme also envisages the construction of several high-category hotels, so, in the coming period, we expect an expansion of investments in such accommodation capacities. I am particularly pleased that there is great interest in investing in new capacities in the northern part of Montenegro, which bring about a more balanced regional development and enable more tourists to stay in this part of the country.

What does Montenegro’s tourism offer lack in order to become even more prestigious? 

– The offer is expanding and improving year-on-year, but the offer of accommodation that is not hotels is not yet at the appropriate level for the high-paying guests. Therefore, it is necessary to provide a range of top-notch experiences that will attract tourists to get acquainted with the destination, but also to spend more money there. I’m glad that the tourism industry is increasingly recognizing the potential in this segment and we have more offers for tourists that stay at 5-star hotels.

In recent years, Montenegrin tourism has attracted global tourism brands. Are there any world-famous brands that are interested in entering the market and invest in tourism development in the north of Montenegro?

– Despite being a small country, there are many international brands operating in Montenegro such as Hilton, Regent (which recently joined the InterContinental chain), Aman, Chedi, Falkensteiner, Four Points by Sheraton and others. This is proof that we have created an environment conducive to investments and that we have recognized the potential that the tourism sector in Montenegro has. The famous One & Only brand will open its first European resort right in Montenegro, while H Hotels from Abu Dhabi is the first city four-star hotel opened in Podgorica, under the CenterVille brand. International brands boost the competition here, but also service standards, which is another benefit for our tourism. There is interest both for the country’s north and south. For instance, the Westin Hotel will be built in the town of Kolašin under the auspices of an economic citizenship project. There is interest in Žabljak too, but we cannot reveal any names, as yet.

How much will Montenegro profit from economic citizenship?

– Montenegro will achieve significant financial and other benefits from the economic citizenship programme. Thanks to this programme, foreign investors will have a new incentive to invest and a more balanced regional development will be accomplished. The pilot program is limited by time and number of applicants, while each applicant must invest at least 450,000 euros in the south and in Podgorica and at least 250,000 euros in the north of Montenegro in development projects defined by the Government. Regardless which part of the country receives the investment, each applicant has to pay 100,000 euros into a special budget account that will be used for development and infrastructure projects in lesser developed parts of Montenegro. Development projects from the tourism sector, that will be offered to investors, entail hotels or mixed 5-star complexes in the south and in Podgorica, and the four- and five-star accommodation in
the north. If the investment is made in the country’s south, the investor has to create at least 80 jobs or 25 if the investment is made in the north. Therefore, in addition to new high-category capacities, and direct financial revenues for the budget, a large number of new jobs will be created through the economic citizenship programme. The programme has already attracted great attention from investors from all over the world, and recently, the implementation of the very first project was announced in Kolašin. I am particularly pleased to note that this is a project in Montenegro’s north, which exceeds the minimum required parameters by approximately 2.5 times. We expect new project applications to be made soon.
Can tourism, if it implies the construction of new hotels and other accommodation facilities in the most attractive natural sites and environmental protection go hand in hand?

–  The very name of the Ministry that I am at the helm of – the Ministry of Tourism and Sustainable Development – highlights our obligation towards creating conditions for development that will not be harmful to the environment. It is still possible to take advantage of the tourist potential of nature, and to preserve and protect it, at the same time so that tourists and our children can enjoy it in the future. Each major project has to be accompanied by an environmental impact assessment study in for the natural resources, that are very important to Montenegro, to be preserved. Also, about 13% of Montenegro’s territory is under some kind of protection, and in the following period, this percentage will go up. As you have pointed out, the most attractive natural sites will always be attractive to tourists, and we will be valued accordingly, although it is not easy to balance between conservation and profit.

You’ve opened chapter 27. According to current projections, you need to invest about 1.43 billion euros in the environment by 2035. How do you plan to get that money?

– Chapter 27 is one of the most significant and most demanding in the EU accession process, in terms of required funding and complying with standards. The aforementioned investments will include the construction of new and maintenance of existing ecological infrastructure and elimination of the consequences of pollution and degradation of natural resources. In addition to the state and municipal budgets, the main sources of funding will be IPA funds, donations and favourable credit arrangements. Eco Fund will be another important source of funding, which will be set up in line with the “polluter pays” principle, which means that companies – polluters will pay special fees. Also, when Montenegro becomes an EU member, the available funds will be significantly higher and we will be able to use the EU’s Structural Funds. There are still many challenges ahead of us in this process, including building up administrative capacities and raising environmental awareness among all citizens. However, all efforts and investments will be result-worthy, meaning that the environment will be preserved for future generations in the best possible condition.

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