Montenegro’s tourism sector continues to operate with a significant structural deficit following the loss of key eastern markets, with analysts warning that the revenue gap is proving far more persistent than initially expected.
According to economic analyst Davor Dokić, the absence of traditional eastern tourists—most notably from Russia—still translates into an annual shortfall of roughly €500 million, a level that alternative markets have so far failed to compensate.
This deficit has now become embedded in the system. Five years after geopolitical disruptions effectively cut off these flows, Montenegro has not managed to build a replacement demand base of comparable scale or spending power.
The issue is not only volume, but structure. Eastern tourists historically generated high levels of out-of-hotel spending, particularly in private accommodation, restaurants, and discretionary consumption—segments that are more difficult to replace with shorter-stay or lower-spending visitors from other regions.
Attempts at diversification have produced only partial results. Israel has emerged as a growing market, with higher-spending visitors and niche demand linked to gaming and mountain tourism, while Armenia has appeared as a limited substitute within the “eastern” segment.
However, these flows remain too small to fill a gap measured in hundreds of millions of euros. As Dokić notes, isolated charter routes or a handful of new connections cannot serve as a systemic replacement for previously dominant markets.
The consequences are already visible in seasonal expectations. The upcoming tourism season is projected to remain broadly flat year-on-year, suggesting that growth momentum has stalled and that the sector is effectively stabilising at a lower equilibrium than before the disruption.
At the same time, internal constraints are compounding the external shock. Rising prices in coastal destinations—where restaurant and accommodation costs increasingly approach or exceed those of major European cities—are eroding competitiveness, particularly when not matched by improvements in infrastructure and service quality.
Logistics has been another limiting factor, although there are signs of incremental improvement. Expanded air connectivity, including new arrangements with low-cost carriers, is expected to increase seat capacity and ease access from Western and Central Europe.
Yet even here, the challenge is structural rather than tactical. Improved connectivity can support diversification, but without a coordinated and more aggressive market strategy—particularly toward Central European and Baltic markets—the scale required to offset the eastern deficit remains out of reach.
What emerges is a tourism model under pressure from both sides. On the demand side, the loss of high-value eastern visitors has created a persistent revenue gap. On the supply side, rising costs and infrastructure constraints are limiting the country’s ability to reposition itself competitively toward new markets.
The result is a sector that is no longer in recovery mode, but in adjustment—operating with a structurally lower revenue base and searching for a new equilibrium that has yet to fully materialise.
