After four years of closure, the iconic Sveti Stefan City-Hotel in Montenegro may reopen this summer if the government and the lessee, Adriatic Properties, finalize the agreement. The company, owned by Greek businessman Petros Stathis, has reportedly already approved the document.
According to multiple sources confirmed by Vijesti, a deal regarding the reopening of both Sveti Stefan and Villa Miločer is close to being finalized. The document, which incorporates the government’s suggestions, has been sent to the government for preliminary approval.
The agreement is said to propose suspending the ongoing arbitration procedure before the International Court in London for six months while the elite resort is reopened during that period. Over the next six months, both parties would negotiate and attempt to resolve their issues, aiming for a final agreement by the end of the month. The main hearing before the international tribunal is scheduled for mid-May.
A key aspect of the agreement is that the Queen’s Beach, the most beautiful beach in Montenegro, will be reserved for hotel guests from 8 AM to 8 PM, after which it will be open to the public.
Adriatic Properties has kept the Sveti Stefan City-Hotel and Villa Miločer closed for the past four summers and halted the construction of a new hotel at Queen’s Beach since the arbitration process began. Without a resolution regarding the use of the beach and the path connecting it to the spa center in the Miločer Park, the hotel operator Aman has refused to reopen Sveti Stefan, citing concerns over guest safety and privacy.
In February, world-renowned tennis player Novak Đoković tried to help resolve the closure of the City-Hotel by discussing the matter with Prime Minister Milojko Spajić. Đoković, who said it was his main reason for staying in Montenegro, promised to use his influence to help solve the problem.
The global ambassador for Aman stated that they had held initial discussions and were hopeful that a solution would soon be found for the greater good of Montenegro.
This summer marks the 65th anniversary of Sveti Stefan’s transformation from a small fishing village into a world-class resort, which began under communist rule. In the past, locals voiced frustration over the continued closure of Sveti Stefan, and protests were planned, including blocking the roundabout in Zavali near Budva. However, they were called off after assurances from the government that the city-hotel would reopen, which, as of now, has not occurred.
The closure of Sveti Stefan in 2021 was sparked by the use of Queen’s Beach, which had been reserved exclusively for hotel guests and political elites for decades. Following an incident when locals damaged the fence around Queen’s Beach, the public company for managing coastal property ordered its removal, freeing the paths in Miločer Park for public use.
After the 2021 incident, Adriatic Properties requested guarantees from the government to prevent such incidents from happening again but did not receive them. In response, the government initiated an arbitration process in London, arguing that the contract was breached. Adriatic Properties subsequently sought €100 million in damages.
As a result, Adriatic Properties refused to pay rent to the state-owned HTP Miločer for the Miločer Park complex, where the old Queen’s Beach hotel once stood. Construction of a new hotel with market-priced apartments is currently underway at that location. The quarterly rent amounts to €87,000.
Adriatic Properties also has not paid the quarterly rent of €380,000 to Sveti Stefan Hotels, the owner of the Sveti Stefan City-Hotel and Villa Miločer. Both companies are now in a difficult financial situation.
The Commercial Court has recognized the London Arbitration Court’s decision, ordering both Sveti Stefan Hotels and the government to pay €620,000 (or £522,000) to Adriatic Properties to cover the costs of the arbitration procedure.
The Government of Montenegro’s Property Protection Representative, Bojana Ćirović, has filed an appeal with the Appellate Court regarding the Commercial Court’s decision.
