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David Margason, MFIC BoD member (Porto Montenegro Managing Director)

Poised for Success

Montenegro provides a safe environment, rich natural beauty and a deep connection to traditional values, all of which align well with emerging tourism trends

The global tourism sector is in a state of flux, both in terms of the products and experiences customers demand today and where they desire to spend their time. It would appear that luxury tourism customers are redefining their definition of luxury towards wholesome experiences that offer a deep-rooted sense of fulfilment in secure, comfortable and uplifting settings. Excitement and entertainment are still on the list of demands, but even young customers who are extremely anxious about today’s world are less thrill-seeking and more fulfilment-seeking. Consequently, investors in tourism are having to move in line with these shifts in customer demands, and we see investors entering the sector from traditionally different sectors, such as music, film and health, science & technology, which are being drawn into the new experience-driven tourism definitions ~ explains MFIC BoD member and Porto Montenegro CEO David Margason.

“Fortunately, Montenegro offers many of the new experiences being sought, which should attract new investment to various strands of the sector here, provided taxation and regulatory complexities are not allowed to undermine its competitive position, despite almost uniquely meeting the cocktail of new customer needs in tourism,” adds our interlocutor.

What would you highlight as Montenegro’s advantages as a tourist destination today?

Montenegro offers an environment of safety, natural beauty and traditional values, all of which play into the new tourism paradigms we’re seeing. It is also located just two-three hours from most major European gateway cities, which gives it a strategically positive placement, provided travel and transport infrastructure is improved to facilitate increased customer flows.

Being a relatively small yet very diverse country, Montenegro offers a traditional and homogeneous cultural experience and a diverse range of environments and experiences in close proximity to one another, which places it well for short and medium break tourism, as a growing sub-sector.

The MFIC Index for 2023 showed a decline in the tourism sector. What factors influenced this result?

There is no doubt that the mid-market sector of tourism in Montenegro has seen declines in visitor numbers and in the average spend of visitors. However, this seems to be a reflection of global trends and conflicts in the region and beyond, having first created immediate demand for migration among those who could afford it, which has now given way to the corrosive economic effects of those conflicts and limitations, particularly on the mobility of mid-market and lower-market customers.

Infrastructure shortcomings for travel by air, water and road have also become a deterrent to making return visits for some, especially following the sharp increase in resident migration to the country that is non-seasonal and has effects that are felt year-round but that exasperate the summer pressures on infrastructure.

In your opinion, what would be the key prerequisites for Montenegro to return to an upward trajectory in this sector?

For Montenegro to be able to capitalise on its unique and well-aligned (with the demands of the new tourism paradigms) tourism attributes, it must return to a competitive cost base in terms of VAT and other tax burdens, such as competitively priced yacht refuelling, concentrate on the continuous improvement of the service culture and quality, and thus the perception of value for money even at higher prices, concentrate on providing what modern and future tourists expect from elsewhere in the world, including resort shopping on Sundays.

It must also significantly improve its infrastructure in healthcare, aviation and road travel, as well as marine travel – as a rare and realistic alternative to travel by land, in its main southern tourism zone.

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