Visit-Montenegro.com : It is either That This Season had been Good, or it was the Hoteliers Trying to Evade Taxes

Podgorica – “This year’s tourist season has been solid, with a very good winter and mountain seasons in the north and also very good season in the south; also, with an excellent pre-season, relaxed height of the season and solid number of visitors in the after-season”, Minister of Tourism and Environmental Protection, Predrag Nenezic said in an interview with “Vijesti.”

“We have achieved what we have projected with this years’ Economic Policy plan of the government.

Between January and the end of September, more than 1, 1 Million registered tourists stayed in Montenegro, which is by five percent more than it was last year. These tourists had almost six million overnight stays. Total incomes are higher than they had been last year and amount at Euro 470 Million up until now”, Minister said.

• There has never been more public criticism than during this season – that is had been bad, both from the aspect of the number of tourists and from the perspective of revenues. Criticism is often addressed by the tourist workers themselves, who are in the center of events. How do you comment on that?

“I notice that there are certain tourist workers who seem to know absolutely everything, who keep presenting their opinion in Montenegrin media, for several years now. Their comments are just about everything, from their own, often narrow-minded, perspective.

At times, persons at stake are “famous” experts for German market, whose agencies’ revenues from tourists is within the limits of a statistical error of the incomes of some smaller local communities or experts who claim to be representatives of some small tourist associations, like association of, for instance, small hotel owners, who do not, in fact, own or run anything.

Majority of others is taking their businesses seriously and are marking good results. Figures speak for themselves – revenues for Montenegrin budget have increased by 21 percent in comparison to the first nine months’ last year. During the season, we have collected by 26 percent more taxes and by 20 percent more fees.

Evidence on how hotel-tourist companies have been working is in the data that they have paid 14,7 percent more in fees till the end of September this year, while this year’s calculation for the VAT is higher by whole 178 percent.

The question is: if small hoteliers have paid more, for instance, 20 percent in taxes and fees this year, does it mean that they have worked better last year and that they have been evading taxes? These figures speak for themselves.

In order to have a full picture, one must add that certain number of hoteliers have increased their prices, but they have failed to do the same with the quality. Increase in prices must be accompanied with the quality-increase. They have soon corrected their approach, but they did suffer certain losses.

• How can you convince us that this season had been better than the previous one. Most definitely – hotels, restaurants, entertainment objects, have not been packed as it has been the case over past years and that was quite visible. Do you agree with that and what was the problem?

“You are absolutely right. However, I would rather note what had happened had been the relaxation in the use of the infrastructure, nature and environment during the height of the season, and the fact that better quality of offer has been achieved.

Realistically, this year has shown a much better situation with the cleanness of the environment, water and electricity supplies and overall quality of offer.

Most certainly, a lot remains to be done, but there are huge steps ahead which have been taken. I would also like to remind you that I have been announcing, from the very start, the prolonging of the season and its’ extension, that is the relaxation of pressure during the second half of July and the first half of August.

So, we are not discussing a problem here, rather the projecting and the management of tourist flows during one tourist year. This is, also, confirmed by the figures.

Cumulative data for the first nine months indicates the growth of 8,3 percent in passengers going traveling across land border-crossings, 8,6 percent in the number of vessels, while the number of planes serviced at Montenegrin airports has increase by 15 percent. Number of passengers increased by 8 percent.

Fact of the matter is that there has been a drop in numbers of guests staying in private – in most occasions – unregistered accommodation, which is lower in quality. As you can see, this has no effect to the official statistics, nor - more importantly – effects the revenues.

So, thesis that there is a high level of correlation between the height of the season over the past years and the grey economy has proven accurate.

And, we shall keep on working on increasing the number of registered beds in the private accommodation, which came up to 60,000 this year, which is by 10,7 percent more than in 2007.

However, we shall not pull back for an inch from our course of the tourist policy, which means that those who are not registered shall remain empty, but also those who are not keeping up with the changes by increasing the quality of what they have to offer.

• Decision to introduce environmental tax for all the vehicles which enter Montenegro and decree on banning of food imports has also been criticized. Has it had a negative influence to, first and foremost, arrival of tourists from Serbia? Or, this might have been the aim?

“Discriminatory policy towards any market is out of the question. Especially that is not the case for Serbia, which is home to a large number of guests, who are our dear guests and very important for our tourism. We shall always fight for this market with the quality and all the other elements of our offer. We shall also try and increasingly attract clientele which has higher financial capabilities.

Law on Food Safety is, simply, a European standard and there is no dilemma that this is an important step in the process of harmonization of our legislature with that in the EU and the increase of quality of our offer.

Eco-tax is paid by everyone, both Montenegrins and foreigners. Amount is adequate and the funds collected are used exclusively for the environmental projects and building of communal infrastructure.

Montenegro, as an environmental and a tourist country, must make sure, much more than the other countries, that it works towards the improvement of the environment. This move has been greeted by all friendly guests and international institution. I would also remind that Montenegro is not charging its’ guests from all of the emitting markets for visas, nor does it charge for tourist passes, neither it charges for tolls.

In Turkey, one must pay Euro 10 per person for a tourist pass, same case is also in Egypt. Visas for many countries cost between Euro 35 and 80.

• Regardless of all your claims, it is evident that Montenegro is lacking tourist capacities of high category, while the service is not on the highest level. Also, investments are realized rather slowly?

“I have never claimed that we had sufficient amount of quality accommodation capacities and the estimate that interest for this type of offer exceeds what we have at the moment by 30 percent - still stands.

Nevertheless, some 10 years ago, we had nothing but ancient, ruined tourist capacities. It took several years’ to introduce a simulative legal and institutional framework, to end the process of privatization in its’ larger part, to create new tourist image for the country and to start a new investment cycle.

The real thing will come only now. And, I am most optimistic in that respect, as I feel that we have not made a single more significant mistake in the process of preparation for great investments.

• Even the biggest investments, like Monk’s Porto Montenegro in Tivat or Aman Resorts project at Sveti Stefan are implemented rather slowly. We still waiting for the valorization on the locations like Velika plaza, Ada, Valdanos, Kumbor… Why is everything so slow?

“There are many objective reasons for that. Starting with the fact that it takes a certain time to prepare quality projects, introduce spatial and planning documentation, all the way to the fact that, with such a delicate project like the one conducted by Aman, it takes much more time to conduct the works.

However, as the Minister of Tourism, I can say that I am not satisfied with the fact that some of the projects are realized so slowly. This is not good, as we must keep up with the most developed destinations, we must offer new and high-quality offers, if we wish to remain in the game. For this reason, I think that these projects must be implemented much more vigorously.

When I talk about that, I have in mind more engagement from us in the government, from the local authorities, but also from the investors.

Some new, powerful partners are announcing their arrival, which is good. Montenegro shall realize projects it has set before itself and it will become a high-quality tourist destination in all segments of its’ offer, also elite in most of its’ part. For this reason, there can be no sentimentality to those who fail to meet their obligations.

• You and PM Djukanovic often mention elite tourism. One could say that we are not too close to that?

“We have never said that we were an elite destination, but it is clear that we are using all the potentials which our country has in order to become a high-quality destination, with the significant parts of our offer which would be qualified as elite. Every approach other than this would be irresponsible and would mean an inadequate use of resources and too much pressure imposed on the environment.

• What is that quality segment which Montenegro can offer at the moment, in order to attract tourists. Which are they and which is the level of those capacities and offers?

“Montenegro does have a certain number of quality, large hotels, which have all the content it needs to welcome guests at any time of year.

We have many new or renewed small hotels of the required quality, which constitutes a special advantage.

Our restaurants, both in the northern and in the central part, as well as those on the coast, provide highest quality food. Most of them are authentic and, what is most important, they are trying to preserve at least a part of the traditional kitchen and that authentic homely atmosphere, which is of highest importance and leaves the excellent impression on our guests.

Our cultural and entertainment program is becoming more and more diverse and it can be used throughout the year. And, of course, we have an extremely wealthy and diverse cultural and historic heritage in a relatively small area. There are not too many countries in the world which can say the same.

We should also not forget a favorable geographic position and the vicinity of Europe’s big metropolises. Last, but not least – we have the people.

Even if we are lacking some skills which we must master as soon as possible, traditional hospitality of Montenegrin citizens and the way they treat a guest and a foreigner, which is the reminiscence to many centuries of our history is, most certainly, our greatest comparative asset.

Sometimes we are not able to see this by ourselves, but there are our friends – guests and partners from abroad – who remind us of that. And, that is something we must not loose.

Roads, Water, Electricity...

There are still problems with roads, water, electricity… These are the chronic diseases of Montenegrin tourism?

“An action plan for the preparation of the next tourist season will be endorsed soon. There will be many projects for the improvement of road infrastructure, airports, border crossing, electricity supply system and optimization of local water supply systems.

The most significant project is, most certainly, regional water pipeline for Montenegrin coastline, which is one of the biggest projects in the entire region. Project is worth more than Euro 70 Million and will be completed by September of next year.

Also, projects which deal with solid waste and waste waters are very important. And, I must emphasize that we are not satisfied with the dynamics of the realization of most of these works across Montenegro.

For this reason, the government and we in the Ministry, as well as people in the new unit for the implementation of utility projects, which has been formed, will step up our efforts in this direction. From the Municipalities, we expect a determined action, efficiency and dedication to resolving these problems, which are a precondition for the quality of life and tourism. Without that, there is no sustainable tourism in Montenegro.

Foreigners Have a Better Perspective on what We are Like


We are witnesses that there have been many features about Montenegro in the international press, and positive at that. Are these paid, promotional articles or is it that foreigner are really seeing us from a different perspective?

“Montenegro is successfully presented at global television networks and that is being funded. Effects are excellent, as it is not only tourism being advertised. These advertisements also help the creation of the image for the entire country, as well as an investment climate within it.

As far as articles in “Guardian”, “Times”, “Sunday Times”, “Financial Times”, “Conde Nast Taveller”, “Forbes”, “Le Monde” are concerned – so, articles in the most prestigious global magazines or papers – these are works of journalists. And, you know it is close to impossible to pay for the space or order what a journalist what to write.

So, it very important that they are writing convincingly about our country, its’ beauties, people and economic and political progress. It has no price. It is obvious that one can see much more objectively and have a better view from the outside perspective, even from our neighboring Croatia.

It is up to us to cease this positive climate in relation to Montenegro and position as such country on the map of the world and attract as many tourists and investors as possible.

Investments are Certain

In your opinion, how soon can we expect investments and will it happen within some reasonable time?

“Porto Montenegro and Amman Resorts are most certainly at Sveti Stefan. Then, the Island of St. Marko and Tivat’s part of Lustica, several projects in Budva and Becici, hotel Lido in Ulcinj, beginning of construction works at Vektra-Boka hotels in Herceg Novi, at least one or two new projects in Kotor at location of Fjord, Jugooceanija, former URC and Vrmac. Then, continuation of works at “As” in Perazica do, hotel Vile Oliva in Petrovac, continuation of Avala complex, then the skiing center at Kolasin, several objects at Zabljak, etc. And, at least 15 to 20 small, high-quality hotels across Montenegro.

(13 October 2008)

By: Z. VUČINIĆ