Three years after the first commercial ride, the Kotor–Lovćen cable car has moved beyond the novelty phase and become one of the more commercially significant additions to Montenegro’s tourism infrastructure. The project carried more than 430,000 passengers in 2025, visitor numbers are running higher again in 2026, around 95% of users are foreigners, and the concession generated €603,920 for the state from the operator’s 2025 results.
What began as an approximately €20mn private investment is increasingly functioning as a tourism cluster linking Kotor, Lovćen and the wider Cetinje hinterland rather than simply as a transport system between two stations.
The cable car opened commercially on 14 August 2023, following years of abandoned plans and unsuccessful attempts to deliver the project. The final model was structured as a 30-year concession between the Montenegrin government and a consortium involving Novi Volvox, subsequently associated with XEnergy, and Italian cable-car manufacturer Leitner.
The concessionaire committed to invest roughly €20mn, while the state receives an annual concession payment equal to 15% of net profit generated by the cable car and associated facilities.
That structure is beginning to produce measurable fiscal returns. Audited accounts for 2025 resulted in a concession payment of €603,919.99. Given the contractual 15% net-profit formula, that payment mechanically corresponds to a profit base of just over €4mn, assuming the concession calculation is applied directly to the audited profit base specified by the contract.
That is a substantial result relative to the original approximately €20mn investment envelope, although it should not be confused with an equity return because subsequent capital expenditure, financing structure, depreciation and shareholder investment all affect the final economics.
The fiscal effect extends beyond central government. Under Montenegro’s local-government financing rules, 70% of concession revenues are transferred to the municipalities on whose territories the concession is located.
The concession area is divided approximately 85.9% within Kotor and 14.1% within Cetinje. Applied to the 2025 payment, that implies around €423,000 available for local allocation, of which approximately €363,000 corresponds to Kotor and about €60,000 to Cetinje.
The numbers remain relatively modest compared with municipal budgets, but they illustrate an important feature of the concession model: local governments participate directly in the financial upside rather than receiving only indirect tourism benefits.
The stronger economic impact comes from activity surrounding the concession itself.
The cable car and its tenants employ around 300 people, most of them locally. That creates a payroll, social-contribution and income-tax base that did not exist before the development. Restaurants, retail facilities, attractions, transport companies, tour operators and suppliers generate a second layer of spending that is not captured by ticket sales or concession fees.
The project has also demonstrated unusually strong international demand. Around 95% of visitors in 2026 are foreign tourists, with travellers from the United Kingdom accounting for about 40%.
Americans are increasingly visible, while Israel, Germany, the Netherlands, Turkey and France represent other significant markets. Visitor numbers this season are reported to be above the already strong 2025 level.
Those figures matter because Montenegro’s tourism economy remains exceptionally dependent on international demand. The country recorded 2.73mn tourist arrivals and 15.37mn overnight stays in 2025, with foreign tourists accounting for 95.8% of all overnight stays.
At the same time, 92.6% of total overnight stays were concentrated in seaside destinations.
That coastal concentration is one of the structural weaknesses of Montenegro’s tourism model. The country succeeds in attracting large numbers of visitors to a relatively narrow Adriatic strip but captures substantially less economic value from its mountains, national parks and historic interior than their tourism potential would suggest.
The Kotor–Lovćen cable car directly addresses that imbalance.
Its route is approximately 3.9 kilometres long, overcoming an elevation difference of more than 1,300 metres. The journey from Dub near Kotor to Kuk on Lovćen takes about 11 minutes. The installation includes 48 gondolas and can transport as many as 1,200 passengers per hour.
The economic importance of those specifications is not the transport capacity itself. The cable car effectively compresses two different tourism products — the Bay of Kotor and Lovćen — into a single excursion.
A visitor can move from the coastal tourism zone to a mountain environment within minutes rather than committing to a long road journey. That makes Lovćen accessible to tourists who might otherwise remain within Kotor, Budva or the cruise-port ecosystem.
This is particularly relevant for Kotor because cruise tourism has reached a considerable scale. Montenegro received 496 foreign cruise-ship visits carrying 630,236 passengers in 2025.
Kotor captures the overwhelming commercial importance of this segment because of its position as the country’s principal cruise destination.
Cruise passengers represent both an opportunity and a persistent economic-policy problem. Large numbers arrive in a concentrated period, place pressure on roads and the UNESCO-protected old town, but often spend only several hours in the destination.
Their economic contribution therefore depends heavily on whether Montenegro can sell additional experiences during that limited window.
The cable car changes that calculation.
Instead of restricting an excursion to the Old Town, a cruise passenger can be sold a combined Kotor–Lovćen product involving transport, the panoramic ride, food, attractions, souvenirs and potentially onward travel towards Njeguši or Cetinje.
The same logic applies to hotel guests based elsewhere on the coast.
This allows Montenegro to raise tourism revenue without relying entirely on higher visitor numbers. Increasing spending per tourist is considerably more sustainable than continuously increasing physical arrivals in destinations already struggling with road congestion, water infrastructure, parking pressure and overcrowding.
The commercial strategy around the upper station reflects that logic. The cable car has developed from a transport asset into a broader visitor complex.
The original panoramic journey was complemented by Montenegro’s longest alpine coaster, while the 2026 season added the Falcon Flyer and Aerobar, with the latter raising visitors around 35 metres above the site for panoramic views.
These additions are financially important because they increase revenue per visitor and dwell time.
A cable-car operator relying primarily on ticket revenue has a relatively narrow earnings model. Once food, beverages, attractions, retail and other services are added, the same visitor can generate several distinct revenue streams.
Higher secondary spending can materially improve EBITDA without requiring equivalent growth in passenger numbers.
That distinction becomes increasingly important as the project matures. The strongest tourism attractions rarely sustain long-term growth simply by increasing admissions indefinitely. Capacity eventually becomes constrained, while environmental and visitor-experience considerations impose practical limits.
The Kotor–Lovćen project has the possibility to shift towards higher-value monetisation instead: maintaining strong passenger numbers while increasing the amount each visitor spends across the wider destination.
The 2025 concession result suggests that this process has already begun. A concession fee above €600,000, calculated on 15% of net profit, points to a commercially meaningful earnings base only two full seasons after opening.
The original €20mn investment therefore looks increasingly modest relative to the tourism infrastructure created. Yet the wider economic value of the asset cannot be measured only through the concessionaire’s accounts.
The more strategic issue is whether Montenegro can use the first section as the anchor for a larger tourism corridor.
The government has already moved towards construction of the Lovćen–Cetinje cable-car section, effectively reviving the original concept of linking the coast, Lovćen and the historic capital through a continuous tourism route.
The procurement process for design and construction has carried an estimated value of approximately €49.56mn excluding VAT, while the government has previously described the wider investment requirement as approximately €60mn.
That extension would materially change the economics of the existing cable car.
At present, the strongest immediate economic capture occurs around Kotor and the upper Lovćen station. Extending the system to Cetinje would create a much longer visitor-spending corridor, giving tourists a direct reason to move from the coast through Lovćen into the capital.
Cetinje has significant cultural assets but captures only a small share of Montenegro’s tourism traffic compared with Budva, Kotor, Herceg Novi and other coastal municipalities.
Linking it directly to one of the country’s most heavily visited tourism zones could turn the city from a separate excursion into part of a combined destination product.
The extension also creates a different investment profile from the original concession.
A €50mn–€60mn publicly funded project is considerably larger than the approximately €20mn private investment that created the first section. The economic justification therefore needs to extend beyond direct ticket revenue.
The state would effectively be investing in regional tourism infrastructure, with returns distributed across visitor spending, local businesses, employment, tax revenue, concession activity and the wider development of Cetinje and Lovćen.
Execution will determine whether that multiplier emerges.
A completed Lovćen–Cetinje connection could encourage tour operators to create a circular route beginning in Kotor, climbing to Lovćen and continuing towards Cetinje before returning to the coast by road.
Such a route would distribute visitors geographically instead of repeatedly circulating them through the same congested coastal zones.
It could also support hotel, restaurant and experience investment around Cetinje and Lovćen by improving the predictability of visitor flows. Tourism investors are more willing to fund additional capacity when access infrastructure provides a reliable stream of potential customers.
The cable car nevertheless does not remove the underlying infrastructure constraints facing the Bay of Kotor.
Kotor continues to experience intense seasonal road congestion, particularly when cruise traffic, excursion buses and normal summer tourism demand coincide. The cable car can move visitors efficiently between Dub and Lovćen, but tourists still have to reach the lower station.
A successful attraction can therefore create its own infrastructure pressure unless access roads, bus-management systems, parking and public transport develop alongside visitor numbers.
There is also a capacity-management issue on Lovćen itself.
The national park is the core asset being monetised. Increasing visitor numbers without careful control of construction, traffic, waste and commercial development risks degrading precisely the landscape that makes the project valuable.
The strongest development model is therefore not necessarily the one that maximises visitor numbers.
The better metric is likely to be revenue and local economic value per visitor, combined with controlled physical capacity. Attractions, gastronomy, local products, organised excursions and connections to Cetinje can increase tourism receipts without requiring unchecked growth in daily passenger numbers.
That is also where the Kotor–Lovćen project increasingly differs from Montenegro’s traditional tourism development model.
Much of the coastal economy has historically expanded by adding accommodation: more apartments, more villas, more hotel beds and more residential real estate marketed partly through tourism demand.
The cable car demonstrates another route. Tourism infrastructure can create value by adding an experience rather than adding another bed.
That distinction becomes increasingly important as Montenegro approaches the physical limits of development in parts of Budva, Kotor and Tivat. Future tourism growth will depend less on simply increasing accommodation capacity and more on extracting higher economic value from the people already visiting the country.
The cable car’s international visitor composition indicates that the product can support that transition. With 95% foreign customers and particularly strong demand from high-spending markets such as the United Kingdom and the United States, it has become an export product in economic terms: foreign consumers purchase a service that is produced entirely inside Montenegro, generating domestic employment, taxes and concession income.
Its scale is now meaningful. The more than 430,000 passengers carried in 2025 are equivalent to roughly two-thirds of the total number of passengers arriving in Montenegro on foreign cruise ships that year, although the groups overlap and the comparison should not be interpreted as meaning that cruise tourists account for the same share of cable-car users.
It nevertheless demonstrates that the attraction has developed passenger volumes comparable with one of Montenegro’s most visible tourism segments.
The project has also developed destination-marketing value. Panoramic imagery of the Bay of Kotor and Lovćen is among Montenegro’s strongest international tourism assets, and the cable car encourages visitors to generate and distribute that imagery across foreign markets.
Unlike a conventional advertising campaign, the attraction continuously produces its own destination exposure through hundreds of thousands of users.
That effect is difficult to price precisely, but it strengthens the economics of the original infrastructure investment.
The Kotor–Lovćen cable car has now reached the point where its performance can be assessed through concrete numbers rather than promotional expectations: approximately €20mn of initial investment, a 30-year concession, more than 430,000 passengers in 2025, around 300 jobs, 95% foreign visitors, higher attendance again in 2026 and a €603,920 concession payment for 2025.
The next phase is larger and more difficult. Completing the connection towards Cetinje would move the project from a successful individual attraction towards a genuine piece of national tourism infrastructure.
That is where the economic case becomes most significant. Montenegro already receives millions of tourists and more than 15mn overnight stays annually, yet over 92% of those nights remain concentrated on the coast.
The opportunity is increasingly not to bring dramatically more people into the same narrow strip, but to move existing visitors further through the country and capture more spending from every trip.
Kotor–Lovćen has already shown that tourists will pay to make that journey. The larger opportunity now lies in turning an 11-minute panoramic ride into a functioning economic corridor between the Bay of Kotor, Lovćen and Cetinje.
