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According to data from its statistical office, Montenegro was visited by 647,450 tourists in the first seven months in 2011, which is 8.8 percent more than in the same period last year.
"The season began late, but arrivals in July and August were unusually good, so we can be satisfied with the results so far," Montenegro's Tourism Minister Predrag Nenezić told Reuters. The upturn is very important progress for such a small economy where almost 27 percent of the GDP comes directly or indirectly from tourism.

Luxury remains

The tourism boom Montenegro began to enjoy in 2008 is closely connected to the number of investors that flooded the country and scooped up coastal properties, fuelling a building frenzy. However, many ambitious tourism projects have since stalled.
During the golden pre-crisis years, apartments in Montenegro were sold for as much as EUR 5,000 per square metre, with land fetching between EUR 350 to EUR 600 per square meter. This year, prices as well as the number of transactions are down 30 percent compared to that period.
Despite falling prices, sales are still slow and there are currently some 10,000 apartments of different sizes which remain unsold even though they are very competitively priced. Most are in Budva (about 4,500 dwellings).
Interest in the development of luxurious properties is not completely waning, however. In Ulcinj an Egyptian-Swiss consortium plans to build an exclusive tourist resort. Preparations for a preliminary design for the island of Sveti Marko are also under way, where a Russian company plans to build tourist resort with luxury apartments next year. The proposal includes a hotel with a capacity of 60 luxury rooms and suites, restaurants and support facilities, 100 luxurious bungalows, support services, business and commercial premises and facilities, and fitness spa.

Business is slow

When it comes to business premises, Montenegro is suffering the same torments as other countries in the region. Due to the global economic crisis, many commercial developments did not evolve as planned so most foreign investors withdrew from the sector, returning to their home country and leaving property empty. Real estate agencies say that office space was more easily sold in 1999 when the country was bombed by NATO than it is today.
In order to get the real estate market back to the desired level, experts argue it will be necessary to simplify the procedure of obtaining usage permits. At a recent forum organised by the American Chamber of Commerce in Montenegro, participants argued that the Montenegrin government, state institutions and municipalities must continue to enhance their own capacity to work with investors. It was suggested that the country should consider introducing incentives to continue to attract substantial investment in the area of real estate.
The development of the property market in Montenegro will continue to be vital for attracting investments and thus will affect the growth of the economy, the AmCham forum concluded. Locals will hope the high tourist numbers will speed up the return of foreign investors.