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David Margason, MFIC Board Member And Executive Director Of Porto Montenegro Adriatic Marinas

We Expect Another Good Year

Despite global and domestic economic challenges, tourism has remained a strong pillar of support for the short-term growth of Montenegro. As one of the leading investors in this area, Porto Montenegro expects another successful season

Overall expectations and the needs of tourists do vary somewhat between distinct customer groups, but the fundamental in-country characteristics of the natural environment, cultural richness, fine weather and warmth of hospitality, which have attracted tourists to Montenegro for decades, still prevail, which is why – with COVID related regulatory restrictions on travel now normalised – I expect Montenegro to be as popular to tourists in 2023 as it has ever been, says David Margason, board member of the Montenegrin Foreign Investors Council and executive director of Porto Montenegro. He does still add that external and varying economic and geopolitical factors will, as ever, differentially impact willing tourists’ abilities to make their desired visits to Montenegro.

“However, overall, we expect another good year, especially in the upper market segments,” confirms our interlocutor. That said, tourists are fickle and mobile, and so the bigger long-term issue is defending an established market against ever more aggressive international competition. It is with this in mind that Margason offers a word of advice to Montenegrin policymakers: “there is clear evidence that those who are conscious of, and actively defend, their inherent USPs do not move to damage recognised fundamentals of their appeal to their core customer groups (be those groups in the coastal on-shore, marine leisure or inland mountain interested groups). They remain always inventive, while constantly improving the infrastructure required to transport willing tourism spend to and from Montenegro with acceptable levels of friction. The clear winners are those who weather broader changes to the global market and grow their tourism economies the most effectively over the long term. Montenegro will need to actively plan and consciously act to do the same, insists our interlocutor.

He also draws a fine line between different types of investments. “It is important to differentiate between ‘tourists’ and ‘investors in tourism and tourism products, including real estate’. The former will behave according to the immediate environment as above; the latter, including investors in second homes and tourism rental real estate, will behave quite differently and in accordance with factors that impact the cost and security of their planned capital investments,” says Margason.

“Those whose motives are mainly investment will be impacted more by this, while those investing for a combination of pure investment and regular self-use and visitation will be hit slightly less. However, with many other attractive locations available around the world, we can expect investment factors to take precedence and this source of investment needs to be understood and nurtured if the benefits of its largely international, inward investment are to continue to be enjoyed as a key part of the country’s social and economic development.”

The mega yacht yard Adriatic42, of which you are a co-owner, has officially opened on the site of the former Bijela shipyard. What does this entry into the mega yacht repair and maintenance market mean to you and your partner?

– Montenegro has unique advantages as a centre for marine leisure, and for superyacht activities in particular. Blessed as it is with a beautiful, safe and sheltered haven in the bays of Boka and Kotor, and with a long and proud heritage of marine engineering, as well as being strategically located on the axis between the Western Mediterranean core super-yachting arena and the Caribbean arena to the West, and the fast-growing Arabian and Asian arena to the East, it is well placed to become one of the strongest yachting hubs in the world moving forward.

The superyacht and mega yacht refit and repair industry is currently highly buoyant, despite the impact on the Mediterranean market of the Eastern European regional conflict that is affecting significant yacht owners from that region.

Montenegro has unique advantages as a centre for marine leisure, and superyacht activities in particular. It is well placed to become one of the strongest yachting hubs in the world moving forward

Whilst we await government contractors’ completion of the remediation works on a large portion of the Bijela site, our joint venture – with expert operator Dry Docks World – has forged ahead and invested enough to open a substantial first phase of the yard.

The order book at the yard is growing rapidly; servicing, refit and repair projects are already being completed and this has resulted in associated local and international product and service supply business and employment in the marine engineering sector in the Bay of Kotor growing once again.

The opening of the A42 yard marks a major milestone in the evolution of the marine leisure industry in Montenegro, as it completes the provision, here in Boka Bay, of the full suite of world class yachting amenities that are necessary for the industry to compete with the best-established yachting hubs elsewhere around the world.

How attractive do you find the Economic Citizenship Programme?

– When the real estate-based Montenegrin Citizenship By Investment Programme was launched by the Government of Montenegro, we recognised it – provided it is responsibly applied and administered – as a proven formula for such schemes around the world and as a highly effective means of strengthening confidence in the development of tourism property investment product at a time when the markets were heavily depressed by the impact of the pandemic. The scheme gave our shareholder the confidence to launch our Boka Place mixed use development, which in addition to its hotel and residential inventory, also delivers new family entertainment and health and fitness infrastructure in Tivat, creating substantial numbers of jobs across a variety of disciplines.

In terms of its appeal to investors in tourismcentric rental properties and second homes, our experience of the Montenegrin Economic Citizenship Programme has been extremely good. However, the time required for applicants to realise their citizenship and complete their investment has been much longer than was expected, which has caused concern among applicants and project investors, as well as resulting in delays in the realising of employment and economic benefits of the programme to the Municipality and central government.

It has been our hope that this Citizenship By Investment Programme, in its current form or some evolved one, would be extended, and it is in anticipation of this that we have been preparing another large and innovative tourism project centred on culture and the arts. Unfortunately, the Programme has not been extended. However, we still hope that a new Programme centred on real estate may be launched by the Government in the future, as a way to support additional inward investment, including in our next phase project at Porto Montenegro, and that if the Government should take such a step, and provided a new scheme is responsibly administered, that it would be designed to even more directly benefit the host Municipalities, where associated projects would be located, and the wider socioeconomic development of Montenegro.