Hospitality and Leisure News: Montenegro

Mixed-Use Hotels: Montenegro takes a Step Forward in Luxury Hotel Development

Over the years, Montenegro invested significant efforts in the development of the tourism industry, and one could say that it is steadily becoming a go-to destination for those seeking an ultimate luxury Riviera lifestyle. The recent steps taken by Montenegrin legislators show that international trends are well received and recognized by local authorities, this time through the implementation of a new hospitality model – the mixed-use hotel. The mixed-use hotel incorporates hotel and residential features, making it the perfect combination of the two accommodation concepts that have been traditionally present in Montenegro for quite some time.

In 2018, Montenegro created the legal framework for mixed-use hotels by adopting the new Law on Tourism and Hospitality. This law states that a mixed business model may be performed in a hotel with a minimum of five-stars and with a minimum of 120 accommodation units in the coastal region or on the territory of Podgorica, or a minimum of four stars with a minimum of 60 accommodation units in the central and northern region, except for Podgorica, operating for 12 months at least.

Nevertheless, the accommodation units may be sold, but the percentage of accommodation units intended for sale may not exceed 50% of the total accommodation capacity of the mixed-use hotel. Exceptionally, in five-star hotels with a minimum of 240 accommodation units in the coastal region and Podgorica or in four star hotels with at least 120 accommodation units in the central and northern region except Podgorica, the percentage of the accommodation units for sale cannot exceed 60% of the total accommodation units.

Furthermore, the legislators made the mixed-use business model appealing not just to tourists, but also to reputable hotel brands, by stating that the management and maintenance of a hotel may be conferred upon the tourist operators on the basis of a management and maintenance contract.

It is also important to mention that the hotels which have a license to conduct hospitality business can change their business models into condo or mixed-use business models. Such a change is feasible only in the case of reconstructing an existing single or two-star category hotel in a way to raise its categorization to at least four stars in the northern and central region (excluding Podgorica), and at least five stars in the coastal region and in Podgorica.

In the end, it remains to be seen whether investors will recognize the trend of mixed-use hotels similarly to the Montenegrin legislators, and decide to make Montenegro even more alluring to future tourists.

 

 

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.