In the first three quarters of 2024, Montenegro’s tourism revenues amounted to €1.312 billion, which is €49.5 million less than in the same period last year, according to the Central Bank of Montenegro (CBCG).
In the third quarter, covering July, August, and September, tourism revenues totaled €877.1 million. This represents a decrease of 3.47%, or €31.5 million, compared to the third quarter of the previous year.
These figures confirm what had been speculated throughout the summer—that the tourism season was weaker compared to last year.
According to CBCG data, tourism revenues were €94.5 million in the first quarter, €340.1 million in the second quarter, and €877.1 million in the third quarter.
In 2023, total tourism revenues were €1.507 billion. Revenues in the first quarter were €119 million, €333.7 million in the second, €908.6 million in the third, and €146.4 million in the fourth.
President of Montenegro, Jakov Milatović, commented on the data, noting that this is the first time since the country’s independence in 2006 (excluding the pandemic year of 2020) that tourism revenues have decreased compared to the previous year.
“The tourism season, instead of acting as an economic growth driver, resulted in a decrease in revenue of nearly 4% or about €50 million in the first three quarters of this year compared to the same period last year. Additionally, the number of overnight stays has dropped by over 5%,” Milatović wrote on X (formerly Twitter). He added that the tourism sector, facing unresolved infrastructure and municipal issues, is entering next year with another challenge—the increase in the value-added tax (VAT) from 7% to 15%.
“This could further weaken our international competitiveness. We must not allow tourism, as the main driver of our economy, to enter a dangerous stagnation zone,” Milatović warned.
Starting next year, the VAT rate in tourism will be raised to 15%, up from the current 7% on accommodation services. This increase is a significant challenge for tourism businesses. Hotel owners have already announced that they will raise accommodation prices by over 50%. The exact price increase will be more precisely known at the beginning of the new year.
Higher accommodation prices will likely not attract more tourists but will result in higher state revenues from tourism. Hotel owners are also concerned about the announced visa requirement for Russian nationals.
In addition to the VAT increase, hotel owners are worried about the introduction of visas for Russian citizens. “The introduction of visas will further reduce the number of Russian tourists, who are already fewer due to sanctions,” said Nikola Pejović, president of the Montenegro Hotels Association, in an interview with Dan.
Pejović added that next year will be challenging, with the VAT increase on accommodation services being one of the biggest issues. “Currently, we pay 7% VAT, which will rise to 15%. That’s a 105% increase, which is a huge blow to us,” he emphasized.
He also pointed out that this move is not in line with regional practices. “In Albania, for example, the VAT is 6%, and they are developing faster and better than us. We are a transit country, where people only pass through on their way to Albania,” Pejović said.
In addition to tax pressures, Pejović highlighted the issue of poor air connectivity to Montenegro. “We have too few airlines, and many low-cost routes have been canceled, which directly affects the number of tourists coming,” he explained.
