Montenegro’s government has postponed a decision on the future restructuring of the state-controlled hotel company Hotelska grupa Budvanska rivijera, one of the country’s most significant tourism assets, as authorities seek additional expert analysis before determining the investment model for the coastal resort portfolio.
The issue was discussed at a meeting of Montenegro’s Council for Privatisation and Capital Projects, where legal and financial assessments of a restructuring proposal were presented. The proposal was initially submitted in October 2025 by MK Group, a regional investment company that already holds 33.58 % of the shares in Budvanska rivijera.
The council reviewed a report prepared by the consulting firm Horwath & Horwath from Zagreb, which analysed the initiative and outlined two potential business models for restructuring the hotel group. However, the council concluded that a final decision should only be made after further technical analysis and consultations with government institutions and local authorities in Budva.
Officials emphasized that maintaining the current structure of the company could gradually reduce its competitiveness in the regional tourism market. According to the council, continuing the status quo would lead to a progressive loss of market competitiveness, making new long-term investment necessary in order to unlock the full potential of the tourism complex.
Budvanska rivijera is one of Montenegro’s largest hotel operators and controls several key properties along the Adriatic coast, including hotels and tourist complexes in Budva and Petrovac. Among the most prominent assets are the Slovenska plaža tourist resort and the Hotel Aleksandar complex, which together represent some of the largest accommodation capacities in the country’s tourism sector.
The restructuring proposal submitted by MK Group reportedly considers two strategic scenarios. The first model envisages a joint investment between the state and minority shareholders, including MK Group, to redevelop existing tourism assets. The second model proposes splitting the company into two separate entities, allowing different ownership structures and investment strategies for specific hotel properties.
Under this second scenario, hotels located in Petrovac – including Palas, Castellastva and Crystal Palas – together with the Mogren hotel in Budva would remain largely under state ownership. Meanwhile, the Slovenska plaža resort and the Hotel Aleksandar complex would form the basis of a new company in which MK Group could become the majority shareholder with roughly 60 % of equity, while the state would retain around 30 % and the remaining shares would belong to minority investors.
The proposal also includes plans to redevelop the Slovenska plaža site into a new hotel complex with a congress centre, underground parking and expanded green areas, built under the concept of an open urban resort. However, the project has triggered debate in the public sphere, with some critics opposing the potential demolition or transformation of existing structures at the site.
The government has indicated that any eventual restructuring arrangement must comply with economic, environmental and urban-planning standards, while also protecting the interests of shareholders, employees and the local community in Budva. Tourism remains the central pillar of Montenegro’s economy, making the modernization of major hospitality assets a politically sensitive issue.
For policymakers, the decision carries broader implications for the country’s tourism strategy. Montenegro’s Adriatic coast has attracted increasing international investment in luxury resorts and high-end tourism projects, yet many of the older state-owned hotel complexes require modernization to remain competitive with newer developments in destinations such as Porto Montenegro, Portonovi and Luštica Bay.
The final decision on Budvanska rivijera is therefore expected to shape not only the future ownership structure of one of Montenegro’s largest hotel groups but also the broader trajectory of investment and redevelopment along the Budva Riviera, one of the most economically significant tourism zones in the country.
