The southern region of Montenegro is witnessing a surge in investments across tourism, real estate, and related services. However, concerns are mounting regarding the strain on infrastructure, labor availability, and limited coastal land, raising doubts about the sustainability of the current development model in delivering long-term economic benefits.
This issue will be a focal point at the upcoming TBM Business Talks – Southern Region conference scheduled for September 22, 2026, at the Splendid Hotel in Bečići. This event follows a successful inaugural edition in Bijelo Polje and will convene businesses, financial institutions, municipalities, and economic experts.
The conference will commence with an analysis of the 2025 financial results from companies operating in southern Montenegro. This data is expected to shed light on the region’s corporate health, sector concentration, and ability to convert substantial investment into profitable local enterprises.
Montenegro’s coastline has emerged as the primary destination for foreign investments. Major projects such as Porto Montenegro in Tivat, Luštica Bay, and Portonovi in Kumbor, along with the growing hotel and residential sector in Budva, are steering the region towards higher-end tourism and luxury real estate.
The influx of capital has attracted international hotel brands and new hospitality ventures. Notable operators like Kerzner International manage properties such as One&Only Portonovi and SIRO Porto Montenegro. Additionally, there are expectations that Porto Montenegro’s Regent hotel will transition to Kerzner’s Rare Finds collection, pending official confirmation.
These developments have not only elevated Montenegro’s global profile but also stimulated job creation within construction, hospitality, and service sectors. They have heightened demand for local suppliers, property management services, financial assistance, and transportation.
Nevertheless, the economic advantages remain unevenly distributed. A significant portion of coastal investment is concentrated in residential real estate. While construction and sales yield immediate returns, they often do not provide the same level of sustainable employment or ongoing export revenue as hotels and operational businesses.
In 2025, Montenegro’s tourism sector generated approximately €1.48 billion from foreign visitors, marking it as a vital source of external revenue. However, the industry is heavily reliant on the summer season and private accommodations, with hotels representing only a minor fraction of total bed capacity.
The municipalities in the south bear most of the infrastructure costs associated with tourism growth. Issues such as traffic congestion among Budva, Kotor, Tivat, and Herceg Novi; pressure on water resources; inadequate wastewater management; and overloaded waste disposal systems are affecting both residents’ quality of life and visitor experiences.
During peak summer months, travel times between coastal towns can extend significantly. The incomplete transport network also hampers labor mobility and increases delivery expenses for businesses operating across the Bay of Kotor.
The proposed Budva bypass and enhanced Adriatic-Ionian transport links have become crucial to improving the investment climate alongside new hotel and residential projects. Without significant infrastructure investment, new developments will exacerbate existing demands on already strained systems.
Aviation connectivity poses another challenge. The airports in Tivat and Podgorica serve as primary entry points for international tourists; however, limitations in terminal capacity and seasonal overcrowding hinder further expansion. Interest in modernizing Airports of Montenegro has grown among both foreign entities and local investors considering various investment models.
The Port of Bar presents an alternative development avenue for the southern region. Unlike the tourism-centric Bay of Kotor, Bar has potential for growth in logistics, freight transport, regional trade, and industrial services. Improved rail and road connections with Serbia and Central Europe could enhance the port’s economic significance while reducing reliance on tourism-driven revenue.
The labor market remains a pressing concern as hotels, restaurants, retailers, and construction firms increasingly depend on imported seasonal workers due to an insufficient domestic workforce to meet peak demand. Rising housing costs along the coast further complicate recruitment efforts since wages in hospitality often do not cover living expenses near major tourist hubs.
The prospect of EU membership may exacerbate this labor shortage by allowing Montenegrin workers easier access to better-paying jobs across Europe. To retain experienced employees, businesses will need to enhance productivity and wages while investing in training programs and offering longer contracts.
The financing landscape appears robust, with Montenegro’s banking sector being liquid and well-capitalized. Domestic banks remain significantly invested in property development, tourism activities, and household consumption. NLB Banka, a key sponsor of the TOP Business Montenegro platform, is actively financing ventures within the coastal economy.
However, lending decisions are increasingly influenced by factors beyond just land value. Financial institutions are now scrutinizing aspects such as construction permits, environmental approvals, infrastructure accessibility, presales agreements, operator contracts, and project viability for generating continuous cash flow.
This shift comes after Montenegro expanded its criteria for developments requiring environmental impact assessments. Projects including hotels, tourist resorts, marinas, golf courses, and commercial buildings exceeding 1,000 square meters may now undergo environmental screening processes that could prolong development timelines but potentially safeguard asset values against chaotic construction practices.
The central theme at the Bečići conference will focus on how value is shared between investors and local communities. While large-scale developments can boost municipal revenues and employment opportunities, they can also escalate land prices and increase demand for public services. The overall economic benefit diminishes when profits and management fees flow abroad while municipalities bear infrastructure costs.
Fostering local supplier networks represents one avenue to enhance economic impact. Increasing reliance on Montenegrin food producers, construction firms, maintenance services providers, transport companies, and professional service providers could help retain more tourism-related spending within the domestic economy.
The agriculture sector remains inadequately linked to coastal tourism despite evident demand from hotels and restaurants. Small-scale producers often lack sufficient volume or certification necessary to meet requirements set by larger hospitality entities. Establishing structured purchasing agreements along with investments in storage facilities could help stabilize market conditions for domestic agriculture driven by hotel demand.
The TBM program will feature discussions on investment strategies for growth alongside sustainability initiatives while highlighting companies active in southern Montenegro. The event will culminate with the presentation of the TBM Awards 2026, recognizing outstanding businesses within the region.
The effectiveness of this event will depend on whether discussions extend beyond mere investment figures. While Montenegro’s coastline has successfully attracted international capital investments thus far, addressing infrastructure needs alongside workforce development remains critical to ensuring that these investments do not result solely in isolated luxury projects amidst an increasingly congested environment.
