Q: According to data from greenfield investment agency fDi Markets, only about $300m has been invested into Montenegro's tourism industry since 2006. Why are brownfield investments still preferred when entering this sector in Montenegro?
A: The situation with the tourism industry in Montenegro has been unenviable in recent decades. However, since 2006, after the restoration of independence, the situation has gradually improved. Locations such as Sveti Stefan, Porto Montenegro, Lustica and Splendid have a number of new and [rebuilt] small hotels, creating an image of a safe, stable and reliable location for investment.
In the past, investors wanted to make sure that Montenegro was a reliable destination for investment, so they were cautious. Additionally, there were many public-private projects and many state-owned sites were being privatised, [offering] opportunities for brownfield investment. However, we are planning to develop a number of significant greenfield sites in Lustica, the island Sveti Marko in Tivat and Dobrec-Rose in Herceg Novi. I believe that over time, greenfield investment will take precedence over brownfield investment, especially if one considers that the development of Montenegro as a country and destination is based on the principles of sustainability.
Q: How do you assess Montenegro's real estate market in the aftermath of the global financial crisis?
A: The Montenegrin real estate market, despite the fact that it was affected by the global economic crisis, has not crashed. In 2011, the state issued construction permits for an estimated value of €200m. For a small country such as Montenegro, this is a significant figure. Of course, apart from the residential projects, our focus is on developing hotels, both on the coast and the mainland. We also seeing progress in hotel construction. The estimated value of hotels for which the state issued building for in the past 14 months amounted to €150m, and brands such as Amman Resort, Hilton and Adriatic Marinas [have invested in] Montenegro.
Certainly, removing barriers to business in the construction industry has been a key premise for the government during the reforms of 2008 to 2011. A decision was [made to implement] different taxation levels for hotel owners in the [busiest] tourist sites in order to stimulate the construction of high-class hotels, as well as obligate owners of lower category hotels to raise the quality and level of service [they offer]. So, the hotel industry is certainly a priority for us. We create a favorable environment, and this has not gone unnoticed.
Q: What kind of tourism industry is your ministry aiming to develop?
A: The objective of Montenegro is to be a high-quality tourist destination and [we are moving] gradually towards achieving this goal. To attain the level of a high-quality tourist destination it is necessary to create suitable prerequisites. It is encouraging, however, that Montenegrin vacation spots are gradually grabbing tourists' attention worldwide. Constant investment in tourism, transport infrastructure and human resources brings results. Yet to be positioned as a high-quality tourist destination, we must have a wide array of [attractions on offer], which means that seaside bathing or other forms of tourism will not be neglected, but we shall work to diversify those and enrich [what the country offers to all of its tourists].