Without urgent and coordinated action by institutions, the key problems burdening the tourism industry could cause serious consequences for the success of the summer season, business sustainability and overall public revenues, it was assessed at a session of the Tourism and Hospitality Committee of the Chamber of Commerce and Industry (PKCG).
The Chairman of the Committee, Ranko Jovović, said that last year's decline in tourism revenues represents a serious warning and requires urgent and strategically considered measures to avoid a continuation of the negative trend, especially in the context of a lack of key strategic documents and inadequate involvement of the economy in creating legal solutions.
He believes that more efficient and digitalized procedures are needed for hiring seasonal labor, and appealed for the completion of all infrastructure projects and construction works before the start of the season.
Jovović assessed that the increase in value added tax (VAT) from seven to 15 percent will negatively affect the competitiveness of the Montenegrin tourism product, especially compared to countries in the region that maintain lower tax rates.
"Delays in the implementation of tender procedures for the lease of parts of the coastal zone and uncertainty about the readiness of bathing areas can seriously jeopardize the start of the season. Without a clear strategic direction, even the greatest advantages that Montenegro has as a destination, natural beauty, diverse offer and cultural heritage, can be called into question," warned Jovović at a session held in Budva.
He called on all stakeholders in the tourism industry to jointly contribute to solving the challenges in order to ensure the quality implementation of the upcoming summer season.
The President of the Municipality of Budva, Nikola Jovanović, assessed that the holding of the Board session represents an example of cooperation between the Chamber of Commerce and Industry of Montenegro, that is, the entire economy and local self-government.
"Our goal is to work with the economy to improve conditions so that we can join forces to better realize the tourist season. We consider communication with the economy to be essential in order to jointly examine problems and find the best ways to overcome them," said Jovanović.
The municipality, through the work of the Coordination Body for Monitoring Preparations for the Tourist Season, has identified key challenges.
"This year, unfortunately, we are entering the season insufficiently prepared. Preparations are coming late, which is bad practice. The main current challenge is the tenders for the lease of bathing areas, especially in Budva, which generates 50 percent of tourist revenue. To date, not a single request for approval for the opening of bathing areas has been submitted in Budva. The tenders were implemented late, and we especially expect delays in those where there was a change of tenant," Jovanović said.
The municipality, according to him, appeals for the procedure to be expedited with strict compliance with the law and bylaw procedures.
Jovanović cited the challenges of increasing beach rental prices, which will make services more expensive and thus reduce the competitiveness of the destination, as well as the still unfinished work on the boulevard from Tivat to Budva.
He announced that the Municipality will form a body that will monitor important investments.
"A strong investment cycle must be opened, which is essential for the valorization of tourism potential," said Jovović.
The President of the Budva Municipal Assembly, Petar Odžić, said that an uncertain tourist season is expected.
"As for the local level, the tourist season will be prepared in the best possible way," said Odžić.
He believes that tenders for the lease of bathing areas have destabilized the beginning of the season, and that the increase in VAT in this sector calls into question the competitiveness of business.
"Increasing tax burdens does not necessarily lead to an increase in tax revenues, but rather to a decrease in collection and an increase in the gray zone. A drastic increase in taxes in tourism will not produce the desired financial effects. We will seek a return of VAT to the previous rate," said Odžić.
The Vice President of the Chamber of Commerce and Industry of Montenegro, Nikola Vujović, said that in preparation for the tourist season, strategic documents, prerequisites in terms of infrastructure and a favorable business environment are lacking.
"Such a basis for engaging in tourism seems quite discouraging, especially if we see what the competition in the region is doing. The economy has long recognized the aforementioned problems and is pleased with the willingness of local governments to talk to businesspeople. PKCG will be a partner in all projects so that we can solve the problems in tourism as soon as possible," said Vujović.
Businessmen cited the lack of qualified labor as one of the biggest problems, adding that work permit procedures are slow, complicated, and often inefficient. They also reported that workers from third countries wait months for permits, preventing them from starting work on time.
New administrative requirements have also been introduced, such as a certificate of no criminal record, which further complicates the situation. At the same time, tourism schools do not have enough students, and young staff often do not stay in the profession, which threatens the future of local tourism.
The meeting assessed that the lack of air connections and poor infrastructure further distance Montenegro from regional competitors such as Croatia and Albania, which are constantly improving their offer. In particular, it was discussed that the prices for renting beaches have increased significantly, and that due to the late tender, there is a serious risk that they will not be ready by mid-July.
Businessmen also believe that the VAT increase should not have occurred after the prices for this year were booked, as it could jeopardize the profitability of the business. Real estate taxes have also risen sharply, which puts hoteliers at a disadvantage.
The representative of the Tourist Organization (TO) of Budva, Aleksandar Božović, pointed out the key challenges and potentials ahead of the summer season, including infrastructure limitations, the lack of strategic documents, and the need for better cooperation between institutions.
"It is necessary to start promoting destinations more strongly as soon as possible and develop a new tourism strategy that will include all stakeholders - from local tourism organizations to the relevant ministry," said Božović.
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