The EcoVillage Shas initiative, located in Ulcinj and developed by Eagle Hills Montenegro in collaboration with local development organizations, aims to establish a significant eco-tourism hub that combines hospitality, residential, wellness, cultural, and recreational elements. The project’s economic ramifications are expected to unfold over three distinct phases: construction, early operations, and mature operations, impacting employment levels, regional GDP, tourism revenues, and public finances.
Initial projections indicate that the project will necessitate a considerable capital investment over several years. Early planning suggests the initial design and permitting phase could take approximately 12 months, followed by a phased construction period of 24 to 30 months. Although specific capital expenditure (CAPEX) figures have not been disclosed by Eagle Hills, similar eco-tourism developments in the Mediterranean typically require total investments ranging from €150 million to €350 million for land development, infrastructure, and community amenities. This analysis considers three investment scenarios: a Base Case with €180 million total CAPEX, an Upside Case with €250 million total CAPEX, and a High Commitment Case with €320 million total CAPEX.
During the construction phase, EcoVillage Shas is anticipated to create a significant number of jobs. The construction intensity for large tourism projects averages between 8 to 12 direct jobs per €1 million invested in construction. Under the Base Case CAPEX of €180 million, this could translate to approximately 1,440 to 2,160 direct construction jobs. Additional indirect employment opportunities are expected in areas such as materials supply and engineering services. With typical indirect multipliers of 1.6 to 2.0 for large tourism infrastructure investments, total employment related to construction could range from 2,300 to 4,300 full-time equivalent job-years throughout the build-out period.
If the project reaches the Upside Case scenario with a €250 million CAPEX, direct construction jobs may rise to between 2,000 and 3,000. In this scenario, total labor impact could reach 3,200 to 5,200 job-years. For the High Commitment Case with a €320 million CAPEX, these figures would increase further to approximately 2,560 to 3,840 direct jobs and between 4,100 and 6,700 total job-years.
Once operational, EcoVillage Shas is expected to provide substantial ongoing employment. The facility will feature various accommodations along with wellness centers and dining venues. Established tourism destinations of similar scale generally support around 150 to 250 permanent jobs for every €100 million in operating revenue. Assuming EcoVillage Shas achieves annual operating revenues between €60 million and €95 million at maturity—derived from room bookings and ancillary services—it could support approximately 900 to 2,375 direct operational jobs while generating indirect employment totaling between 1,600 and 3,800 jobs in the regional economy.
Tourist arrivals will play a crucial role in determining EcoVillage Shas’s overall economic influence. In recent years, Montenegro’s tourism sector has seen record international passenger traffic exceeding 3 million visitors annually. The project aims to attract an additional 60,000 to 110,000 visitors each year who are expected to spend between €150 and €230 per person per night during their stay of approximately 4.5 to 6 nights. Consequently, annual incremental tourism receipts associated with EcoVillage Shas could range from €40 million to €150 million once fully operational.
Considering typical tourism spending multipliers for small open economies—often ranging from 1.6 to 2.0—the total economic impact from visitor spending could yield gross value added between €64 million and €300 million annually across both regional and national economies.
The fiscal contributions from EcoVillage Shas will arise through various channels including VAT on tourism services and payroll taxes associated with employment. Montenegro’s VAT rate on hotel services is set at 21%, while payroll taxes add an estimated additional burden of roughly 17% to 21% on employers’ labor costs. With projected annual operating revenues between €60 million and €95 million, VAT receipts alone could yield between €12.6 million and €19.9 million annually. Payroll contributions linked to direct employment may generate an additional fiscal income of approximately €8 million to €18 million per year. When accounting for indirect employment effects and other tax flows, total annual fiscal contributions could reach between €25 million and €55 million at full operational maturity.
In more favorable scenarios—characterized by higher visitor numbers and increased spending—the potential fiscal contributions would be proportionally larger due to an expanded taxable base.
The EcoVillage Shas project is also anticipated to positively influence regional development beyond immediate economic metrics through infrastructural enhancements such as improved access roads and utilities that would elevate investment attractiveness in surrounding areas. If complemented by public investments in transport connectivity and environmental management initiatives—such as coastal protection—the project may stimulate further private investment in tourism-related sectors.
Multiplier effects from wage income are expected to enhance domestic consumption as well; average wages for operational roles may range from €12,000 to €16,500 annually while management positions might see salaries between €18,000 and €26,000. Consequently, total direct wage payroll could vary from €18 million to €39 million based on the Base Case scenario.
However, various risk factors may influence these economic projections including the timing of infrastructure delivery, macroeconomic stability given Montenegro’s euroized economy, fluctuations in tourism demand linked to global economic cycles, cost inflation in construction inputs which have seen annual increases of around 4% to 7%, and regulatory approval timelines for eco-tourism projects.
Through scenario analysis that accommodates both conservative and optimistic outcomes based on visitor patterns and operational performance expectations—cumulative direct and indirect value added over a ten-year horizon could reach between €1.1 billion and €2.2 billion while cumulative fiscal receipts may surpass €220 million to €450 million assuming stable conditions prevail.
This comprehensive economic profile underscores the potential impacts of EcoVillage Shas on Montenegro’s tourism landscape while providing a basis for investor assessment against comparable developments throughout the Adriatic region.
