Tourist numbers in Budva have increased significantly, similar to those in other Montenegrin tourist destinations. Nikola Pejovic, President of the Montenegrin Hotel Association, stated in an interview with Radio Montenegro that the tourist season is unpredictable and highlighted several challenges that need to be addressed at both local and national levels.
Although the season had a slow start, August has brought a strong influx of visitors, effectively making up for the underwhelming July. Pejovic noted that hotel occupancy has improved and that hoteliers are now more satisfied. However, he emphasised that efforts must be made to prolong the season, ideally into September, through better marketing and improved offerings. He stressed that this requires joint efforts from the Hotel Association, local governments, and the Ministry of Tourism.
Pejovic explained that tourists’ habits are changing, with shorter vacations becoming more common, and that global and regional factors are strongly influencing the season’s course. He expressed concern over the recent increase in VAT for hotels from 7% to 15%, claiming that this policy has led many hotel owners to shut down their businesses and shift to private accommodation. He argued that Montenegro should align its tax policies with neighbouring countries like Serbia, Bosnia, Croatia, and Albania, where VAT rates on accommodation are lower.
He also highlighted the grey economy as one of the biggest obstacles to tourism development. Many apartments are rented illegally and without proper registration or legalisation. This includes entire buildings with dozens of beds that operate without oversight, a situation present not just in Budva but throughout the coast from Ulcinj to Herceg Novi.
Pejovic concluded by expressing hope for better promotion of Montenegro’s overall tourism offering, so that more guests not only visit but choose to return in the future.
