Montenegro’s tourism sector, long regarded as a key driver of economic growth, is now grappling with a loss of competitiveness in the region. Tourism revenue has dropped by nearly 4%, amounting to a loss of €50 million in the first nine months of this year, alongside a decline in overnight stays by over 5%. This marks the first negative trend in the sector since the country regained independence, excluding the pandemic year of 2020.
This downturn is not a result of sudden changes, but rather the outcome of years of neglecting key issues in the tourism industry, according to Prof. Dr. Rade Ratković, Dean of the Faculty of Business and Tourism in Budva. According to Ratković, even when tourism revenues were increasing in previous years, it was due to temporary and artificial factors such as inflation and the influx of refugees, rather than real growth in the sector.
Degradation and lack of vision
“The statistics now reveal what was already obvious – we haven’t seriously committed to developing tourism,” Ratković said. He emphasized that a lack of vision, poor infrastructure, isolation in terms of transportation, and the destruction of the national airline have led to the inevitable degradation of the sector. He added that his repeated calls for reforms in tourism have been ignored for years, and as a result, the country’s key economic sector is slowly losing its identity and competitiveness.
“If radical measures are not urgently implemented, Montenegro could lose what has long been its most recognizable economic advantage,” Ratković warned, highlighting that the decline in tourism revenue is not a surprise but rather an expected consequence of years of neglect.
The shift from traditional tourism
Ratković pointed out that key problems in the sector stem from poor management and the absence of a long-term strategy. “Montenegro lacks serious destination management. Our infrastructure is outdated, we are isolated in terms of transportation, and the national airline is destroyed,” he said. Moreover, infrastructural works are often carried out during the tourist season, creating additional problems for visitors and undermining the overall destination experience.
According to Ratković, the current approach to tourism is leading to its inevitable degradation. “If this continues, we will see hotels closing and turning into apartment complexes. Many hotels are already eliminating services like breakfast, lunch, and dinner, leading to a loss of identity and recognition for Montenegrin tourism,” he warned, describing the sector as a victim of neglect and irresponsibility.
Ratković believes this marks the beginning of the end for traditional tourism in Montenegro. He warned that if urgent changes are not made, the country will face a rapid decline and the quiet demise of tourism as the most important economic sector.
Labor shortage and declining interest
Another major issue facing Montenegro’s tourism sector is the mass exodus of workers. Employees are leaving tourism because they see no future for career development under the current conditions.
“This type of tourism is unattractive to desirable guests, the private sector, and workers who want to build their careers,” Ratković said, stressing that the lack of quality staff is jeopardizing the sector’s ability to provide services that would attract international visitors and retain their loyalty.
Call for urgent reforms
Ratković called on the government to implement urgent and radical reforms in tourism, based on expertise and science rather than political interests. He stressed that politics should not have a dominant role in decision-making about the sector. “We need a destination management model that will involve tourism experts and all key stakeholders in the sector,” he stated.
He further emphasized that political parties should not be involved in managing tourism, and that a model should be created that allows the private sector, experts, and scientists to take on key roles in decision-making, with state support.
“The combination of outdated infrastructure, inefficient management, lack of vision, and a mass exodus of workers threatens the survival of the sector. The increase in VAT to 15% will further burden an already fragile industry, potentially resulting in further declines in revenue and competitiveness. It’s time to understand the seriousness of the situation and take decisive actions to put tourism back on the right track,” Ratković concluded.
This message comes as a final warning—if concrete steps are not taken, Montenegro could irreversibly lose one of its most important economic sectors.
Presidential warning on declining tourism revenues
Recently, President Jakov Milatović also warned that the tourist season, instead of acting as a driver for economic growth, led to a 4% decrease in revenue in the first three quarters of the year, amounting to a €50 million loss compared to the previous year. He noted that the number of overnight stays had also declined by over 5%.
Milatović stated that the tourism sector, in addition to unresolved infrastructure and communal issues, enters the next year burdened with an increase in VAT from 7% to 15%, which could further weaken Montenegro’s international competitiveness.
“We must not allow tourism, which has been the main driver of our economy, to enter a dangerous zone of stagnation,” Milatović emphasized.
