A planned five-star hotel project adjacent to Budva’s Old Town is set for a redesign following the discovery of an ancient necropolis at the construction site. This development, spearheaded by Montenegroflight d.o.o. on the former Žuta kuća location next to Hotel Mogren, now faces increased costs and regulatory challenges.
Construction activities were halted in March 2026 after archaeological excavations revealed significant historical remains. Investigative work conducted between March 30 and April 30 confirmed the existence of an ancient burial site, which has necessitated additional heritage protection measures.
In response, Montenegro’s Cultural Heritage Protection Administration has mandated that the developer revise the existing plans to ensure the archaeological findings are preserved and integrated into the hotel’s design. The updated project is expected to feature these remains within the building structure, particularly in the basement area, introducing more complex engineering and architectural requirements than initially anticipated.
Before construction can resume, the developer must secure renewed heritage approval. At this stage, neither a revised investment figure nor a new completion timeline has been made public.
The financial ramifications for Montenegroflight could extend beyond just redesign costs. Delays associated with obtaining approvals may lead to increased financing expenses, contractor claims, and rising equipment prices, all of which could postpone revenue generation from hotel operations.
This situation underscores broader development risks in Budva, where many of Montenegro’s prime tourism sites are situated near historically sensitive locations. Projects in proximity to the Old Town encounter a more intricate planning landscape compared to greenfield developments due to overlapping heritage, archaeological, and urban design considerations.
Such risks are particularly pertinent for financial institutions involved in funding these projects. Decisions regarding financing coastal hotels increasingly require thorough assessments of potential archaeological and cultural heritage issues alongside standard planning and environmental due diligence.
An unexpected archaeological discovery during construction can significantly alter project economics, even at advanced stages of development. However, integrating the archaeological site into the hotel design could also yield commercial benefits if executed effectively. Heritage features may enhance the value of premium tourism properties by enriching the guest experience.
Nonetheless, this potential advantage comes after the investor has absorbed additional costs related to redesign and conservation efforts. The immediate focus for Montenegroflight is to create a revised hotel concept that meets heritage authority requirements while maintaining the commercial feasibility of a five-star establishment on one of Budva’s most sensitive development sites.
While the project remains feasible, the recent archaeological discovery has transformed it from a straightforward tourism investment into a more complex heritage development undertaking.
