Analyse of the sector 29/11/2010
A booming industry

Travel and tourism in Montenegro is booming and the country is regarded to be amongst the top three in the world for tourism expansion. Its 19% increase in tourism expenditure in 2008 would have been spectacular in any other country but is actually slower than in previous years in Montenegro. Nevertheless, Montenegro has a huge potential for developing almost all types of tourism and its track record of successful implementation, which led to the explosion of its summer tourism receipts gives reassurances for future growth.

 

Foreign summer leisure tourists drive the demand

 

The main reason for explosive growth in tourism is foreign leisure tourists going to Montenegro to spend their summer holidays there. With huge investments already under way and more announced for the following years, Montenegro’s coast should be able to attract ever larger numbers of foreign tourists over the forecast period. However, the main aim for Montenegro today is to develop also other types of tourism such as mountain and spa resorts, to move up the value chain, to expand its tourism season and the tourist regions of the country.

 

Competition is strong and increasing

 

Large hotel resorts have mainly been privatised and often acquired by foreign developers in Montenegro. As they are distributed in different areas of the country they breed competition not only amongst companies but also amongst towns. International companies have also invested a lot into renovation and new developments, which assures future development. Some markets could use even more competition though, for instance air transportation, as there are currently no low-cost carriers operating in the country.

 

Incoming tourism agencies are the crucial booking channel

 

As the whole tourism industry depends on the arrival of foreign leisure guests, incoming tourism agencies are crucially important as they arrange packaged deals to Montenegro coastal resorts. While independent travellers are also numerous, package holidays are necessary to fill the increasing capacities of Montenegro tourist resorts. Online sales are increasingly important; however, they are significant only in some markets, such as car rental, while they represent only a niche of the demand in others.

 

Targeting high spenders

 

Montenegro tourism developed a great deal in the last few years of the review period, but only to reach the level of arrivals of its “golden era”, two decades before that. Its recent investment drive has assured future development, but the main issue facing the industry today is to be able to increase the quality of its services and move up the value chain – earning more from each visitor. Montenegro certainly has enough potential for the development of high-end tourism provided the continued investments in infrastructure and promotion.