Meliá plans luxury growth in Montenegro

Regent Hotels & Resorts will manage developer BIM Group's new mixed-use property.
Regent Porto Montenegro. Photo credit: Regent Hotels

Meliá Hotels International is set to make its debut in Montenegro with a resort hotel. 

The country, which has seen recent rapid growth in visitor numbers, is looking to position itself as a luxury destination, targeting the super-rich with a number of exclusive coastal developments.

The hotel will be operated under the Meliá Hotels & Resorts brand and is located in the municipality of Budva, an ancient city on the Adriatic founded by the Greeks in the 5th century and often compared to nearby Dubrovnik, Croatia. 

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“For Meliá, the opening of this hotel is a natural step forward in our growth in markets where our brands have great potential to add value thanks to our success and experience in the resort hotel industry,” said Gabriel Escarrer, EVP & and CEO of Meliá Hotels International. “We are very proud to add this magnificent hotel to our portfolio and continue to bolster our leadership in the Mediterranean.”

Meliá's Growth

According to the European Travel Commission, Montenegro reported a 19-percent increase in visitor numbers in 2017. According to a PwC report from earlier this year, the country had boosted growth and proved its success in overcoming seasonality. Montenegro’s tourism revenue was €846.4 million last year, or around 22 percent of its gross domestic product, according to the World Travel and Tourism Council, and was expected to exceed €900 million this year.

In the country’s "Tourism development to 2020" strategy, produced by the Ministry of Tourism, the vision was described as creating a “differentiated all-year Mediterranean destination—with a spectrum of unique attributes appealing to several key segments of the mid- to upscale market.”

It called for the development of high-end tourism products not yet fully realized in Montenegro, such as yachting and golf, as well as nature-based tourism, looking for “not just foreign investors, but the right kind of foreign investors, with the resources, experience, integrity and know-how to realize our shared vision.”

But still, the Ministry warned, “a homogenous product tends to appeal to a geographically and demographically homogenous market. And customer homogeneity leaves a destination vulnerable to an accelerated destination life cycle, in which today’s hot destination can quickly become yesterday’s place to go, seen to offer little of interest.”

Tomorrow's Place

The country has found itself far from becoming yesterday’s place. Meliá will be joining an elite series of developments in the country, encouraged by the success of Porto Montenegro in the Bay of Kotor—a UNESCO World Heritage site and once an Austrian naval base—which was developed into a marina capable of taking super yachts by a consortium of investors including Jacob Rothschild, LVMH CEO Bernard Arnault and Canadian businessman and philanthropist Peter Munk. 

The marina laid down the template for the future of the country’s tourist attractions, with other developments, including Portonovi further down the harbor, which was financed by Azerbaijani investors, and Lustica Bay on the coast, which was founded by Orascom, a Swiss-Egyptian group, which has plans for seven hotels. 

The Porto Montenegro hotel is managed by Regent Hotels & Resorts, which followed Aman Resorts into the country. One & Only, Four Seasons, Banyan Tree and Kempinski have all targeted Montenegro as the country bucks the trend for budget brands being the first to risk a new location. 

Katherine Doggrell is an editor at Hotel Analyst, the U.K.-based news analysis service for hotel investors.

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