Montenegro’s government has deferred its decision regarding the restructuring of Hotelska grupa Budvanska rivijera, a key player in the nation’s tourism sector. This delay comes as authorities seek further expert analysis to inform the investment model for the coastal resort’s portfolio.
The matter was addressed during a meeting of Montenegro’s Council for Privatisation and Capital Projects, where legal and financial evaluations of a restructuring proposal were reviewed. This proposal was initially put forward in October 2025 by MK Group, which currently owns 33.58% of Budvanska rivijera shares.
The council examined a report from consulting firm Horwath & Horwath based in Zagreb, which assessed the proposal and presented two potential business models for restructuring the hotel group. However, the council decided that a conclusive decision would be made only after additional technical evaluations and discussions with relevant government entities and local authorities in Budva.
Officials noted that maintaining the company’s existing structure could lead to a gradual decline in its competitiveness within the regional tourism market. The council indicated that preserving the status quo would result in a diminishing market position, necessitating new long-term investments to maximize the tourism complex’s potential.
Budvanska rivijera stands as one of Montenegro’s largest hotel operators, managing several significant properties along the Adriatic coast, including hotels and tourist complexes in Budva and Petrovac. Notable assets include the Slovenska plaža tourist resort and Hotel Aleksandar, which collectively contribute to substantial accommodation capacity within the country’s tourism industry.
The restructuring proposal from MK Group outlines two strategic scenarios. The first involves a joint investment between the state and minority shareholders, including MK Group, aimed at redeveloping existing tourism assets. The second scenario suggests dividing the company into two distinct entities, allowing for varied ownership structures and investment strategies tailored to specific hotel properties.
In this latter scenario, hotels in Petrovac – such as Palas, Castellastva, and Crystal Palas – along with Budva’s Mogren hotel would largely remain under state ownership. Conversely, Slovenska plaža and Hotel Aleksandar would constitute a new entity where MK Group could acquire approximately 60% equity, while the state retains around 30%, with minority investors holding the remainder.
The proposal also presents plans for redeveloping the Slovenska plaža area into a modern hotel complex featuring a congress center, underground parking, and enhanced green spaces, designed as an open urban resort. However, this initiative has sparked public debate due to concerns over possible demolition or alteration of existing structures at the site.
The government has emphasized that any restructuring arrangement must adhere to economic, environmental, and urban planning standards while safeguarding the interests of shareholders, employees, and the local community in Budva. Given that tourism is crucial to Montenegro’s economy, modernizing significant hospitality assets is a politically sensitive topic.
This decision holds broader implications for Montenegro’s tourism strategy. The Adriatic coast has seen increasing foreign investment in luxury resorts and high-end tourism projects; however, many older state-owned hotel complexes require modernization to compete with newer developments in areas like Porto Montenegro, Portonovi, and Luštica Bay.
The ultimate decision regarding Budvanska rivijera is anticipated to influence not only its ownership structure but also the future trajectory of investment and redevelopment along the Budva Riviera—one of Montenegro’s most economically vital tourism regions.
