Montenegro is evaluating a proposal to significantly increase its tourist accommodation tax, potentially raising the maximum levy to €1-€3 per person per night, up from the current €0.10-€1. This change is under discussion in parliament and would grant municipalities the power to establish their own rates within this new range.
If implemented at the highest level, this adjustment would effectively triple the existing ceiling, thereby increasing expenses for hotel and private accommodation, particularly impacting families and those planning longer stays. The initiative is part of Montenegro’s strategy to enhance revenue streams aimed at improving tourism infrastructure, destination management, and promotional efforts following several years of robust visitor increases.
Currently, 80% of accommodation-tax revenues are allocated to local tourism organizations, while 20% is directed to the national tourism organization. Advocates for the tax increase argue that the existing maximum has remained unchanged since 2015 and does not adequately reflect inflation or the rising costs associated with maintaining tourism infrastructure.
For key tourist destinations such as Budva, Kotor, Tivat, Herceg Novi, and Ulcinj, a higher accommodation tax could provide a substantial additional revenue source during the peak summer season. The financial implications of this tax increase would differ across various accommodation types.
A nightly charge of €2-€3 may seem modest for luxury hotels; however, it could represent a more significant burden for budget accommodations and families traveling together. Additionally, private accommodation providers might experience increased pressure to accurately register guests and report overnight stays if the tax becomes more substantial.
As it stands, this measure remains a proposal in parliament and has not yet been enacted. For Montenegro’s tourism sector, the challenge lies in balancing the need for increased revenue from record visitor numbers against potential additional costs that could undermine its competitiveness with neighboring countries like Croatia, Albania, and Greece.
The critical consideration will be whether any increases in tourism taxes will be accompanied by tangible enhancements in infrastructure, destination management, and overall visitor experience.
