The tourism sector in Montenegro is a vital component of the national economy, contributing significantly to export revenues. According to the latest OECD tourism profile, while the country remains a popular destination for international visitors, it faces challenges that could impact future growth. The focus is shifting from merely increasing visitor numbers to enhancing the overall value of the tourism experience, extending the travel season, and improving infrastructure.
In 2024, travel exports represented 54.6% of Montenegro’s total service exports, highlighting tourism as a crucial revenue source. However, preliminary data from the Central Bank of Montenegro indicates that tourism revenues are projected to reach €1.5 billion in 2024, reflecting a 3.1% decrease compared to 2023. This decline raises concerns about the sustainability of revenue generation despite stable visitor numbers.
The number of international tourists staying in commercial accommodations was approximately 2.5 million in 2024, consistent with figures from 2023, resulting in around 15.0 million overnight stays. The primary source markets include Serbia at 18.4%, followed by Bosnia and Herzegovina at 8.5%, and the Russian Federation at 8.1%. Domestic tourism remains limited, accounting for only 3.9% of overnight stays.
This dependency on foreign visitors exposes Montenegro’s tourism sector to external factors such as transportation connectivity and regional economic conditions. A limited domestic market reduces resilience against downturns in international demand, making it crucial for stakeholders to enhance air connectivity and address regional disparities.
The OECD report indicates that Montenegro’s tourism strategy for 2022–2025 aims to foster sustainable management, develop innovative tourism products, increase visitor spending, and reduce seasonality. While these objectives are commendable, the challenge lies in translating them into tangible outcomes that improve economic productivity and regional equity.
The governance framework surrounding tourism has been strengthened with the Ministry of Tourism overseeing policy implementation alongside local organizations focusing on destination management. A National Tourism Council established in December 2022 aims to enhance standards and create a more stable investment environment. The proposed budget for tourism in 2025 includes allocations of €3.9 million for the Ministry, €3.2 million for the National Tourism Organisation, and €9.9 million for capital projects.
This budget appears modest compared to the sector’s substantial contributions to the economy. To effectively manage an industry generating €1.5 billion, comprehensive investments in infrastructure and services are essential beyond promotional efforts alone.
The infrastructure landscape presents both opportunities and challenges for Montenegro’s tourism growth. While high-end investments have been made along the coast, issues such as congestion, waste management, and inadequate transportation infrastructure persist. The OECD emphasizes the need for a broad action plan addressing institutional capacity, inspection services, and product diversification to improve overall service quality.
The country’s fiscal policies have influenced its accommodation market significantly. Montenegro has implemented a standard VAT rate of 21%, with a reduced rate of 15% for hospitality services to attract investment in higher-category hotels. Since tax relief measures were introduced in 2012, there has been a notable increase in luxury accommodations, including an addition of 38 five-star hotels.
The rise in hotel quality does not automatically resolve underlying issues such as seasonality and labor shortages. The effectiveness of higher-end accommodations will depend on their integration into broader destination management strategies that support year-round employment and local supply chains.
The digital transformation within the sector is gaining momentum through initiatives like the “Tourism Industry 4.0” project aimed at enhancing competitiveness through technological innovation. A new Tourist Information System set to launch in July 2025, is expected to improve monitoring and transparency within the sector.
Sustainability initiatives are also becoming increasingly important as Montenegro seeks to enhance energy efficiency across its hospitality sector with EU support. These measures aim to reduce operational costs while appealing to environmentally conscious travelers.
Northern Montenegro’s development agenda prioritizes tourism diversification through projects focused on winter sports and nature-based experiences, including several ski resorts and other recreational facilities aimed at reducing coastal congestion.
The OECD profile suggests that future success will hinge on addressing deeper systemic issues rather than merely increasing visibility or visitor numbers. Key challenges include fostering domestic tourism growth, managing seasonality effectively, and closing existing infrastructure gaps to maximize the full potential of Montenegro as a year-round tourist destination.
