Friday, 13 November 2020

Lessons from Montenegro: Wild Beauty & The 'Old Normal' at The Chedi Lustica Bay

November 13, 2020 - What to do when the planes stop flying and traditional tourism markets dry up? An innovative shift in focus at the Chedi Lustica Bay, and some lessons from Montenegro in how to reinvent tourism.

"Luxury means different things to different people," a friend said to me recently "For me at the moment, luxury means nature, space, fresh air and outdoor activities."

Things we used to take for granted, I thought to myself later - particularly those who were forced to endure weeks of urban lockdown earlier this year (and in some cases, once more this winter). COVID-19 seemingly has no preferences of victim based on importance, reaching the highest officials in 10 Downing Street and The White House, to name but two. Nature, fresh air, space, privacy - a chance to breathe and return to the old normal. That really is luxury, I agreed, before putting on my mask once more as I entered Zagreb Airport.  

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I was on my way to Montenegro, staying at The Chedi Lustica Bay where I discovered first hand how they are currently navigating the hotel industry’s troubled waters. The hotel wanted to show me how they were adapting to the considerable challenges of the new reality.  The weather was spectacular, they promised, and a quad bike tour of the peninsula would be a highlight of the year. Looking out of the window at one more drizzly grey afternoon in Varazdin, I didn't take much convincing, and we made plans for a 3-night stay, with me flying down to Dubrovnik.  

Longterm readers of TCN may recall an article I wrote soon after my first visit to Lustica, back in February, 2018. Back then I was stunned that such a project could actually be getting off the ground in the Balkans when I had spent years watching major foreign investments in Croatia get strangled by paperwork, bureaucracy and corruption. And yet here, across the border, a visionary Swiss-based business was investing 1.1 billion euro to develop a prime piece of real estate. The 7 million m2 plot on the Lustica peninsula would be home to no less than 7 luxury hotels, a new village of 2,500 people, two marinas and an 18-hole golf course. The project, done in partnership with the Montenegrin government, was moving forward at speed. Crucially, with such a large amount of land, the investor was in total control of the design of the space. If he wanted to build an experience that focused on peace, beauty, nature and stress-free living, he had no neighbours he needed to negotiate with. 

And that is exactly what is happening at Lustica Bay.  

It was an experience which led me to write one of my most discussed articles ever on TCN (even at ministerial level in both Croatia and Montenegro) after that first visit - Lessons from Montenegro: Why Luxury Lustica Bay Will Never Happen in Croatia.

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During my first visit to Lustica almost three years ago now, I encountered what was essentially a building site, and I remember laughing when I was told that the luxury The Chedi Lustica Bay would open in July that year, especially when reverting back to my experience of such projects in Croatia. But open in July it duly did, and progress since then has been more than impressive, despite the slowing brakes of the corona era. 

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To be honest, when the hotel contacted me, I was surprised that the Chedi Lustica Bay was even open in mid-November, especially in this crazy year which has ravaged tourism all over the world.  

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One of the challenges of tourism in both Croatia and Montenegro is seasonality. This chart of Lustica's most important feeder airport - Dubrovnik - gives a great indication of the seasonality of its tourism. And these statistics are from 2019, which was a normal year.  

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Understandably, the tourist arrivals mirror the frequency of flights. Take away the flights, and you take away many of the traditional tourism markets. Just ask Dubrovnik. While most of the rest of Croatia benefited from the lack of flights because neighbouring countries were forced to choose drivable destinations due to no flights, Dubrovnik was starved of tourist supply and registered just 12% of 2019 arrivals for the first 6 months of this year. 

The situation was even worse for Montenegro. Not yet an EU member, some of its main markets were effectively killed for the year when Montenegro was removed from the EU list of safe countries. The 14-day self-isolation requirement on return made a holiday to Montenegro unattractive to all but the diehard fan. In 2019, 49% of tourists to Montenegro came from Germany, Russia and the UK alone, all markets which were effectively cut off for this year. Regional visitors made up just 9% of tourist arrivals last year.  

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But regional tourists had one big advantage for those tourism businesses willing to seek them out - they could arrive by car. And while the average tourist from regional countries may not have as much disposable income as the Brits, Germans and Russians, there are a significant number of wealthy people in countries such as Serbia, Croatia, Bosnia and Hercegovina, Kosovo, North Macedonia and Albania. They, too, were perhaps planning to fly outside the region, and the lack of flights meant that they were a new target market. This is especially true in the winter months, when tourism locally is traditionally dead. Many tourist businesses close for the winter months on the Adriatic. It is the time of year when the owners relax after a long and successful season, and they fly off somewhere for an extended and well-earned holiday.  With no flights this winter, the market is there for those with something to offer.  

And the results were impressive. With tourism numbers necessarily much reduced, this year's regional visitors topped more than 80% of all arrivals (up from just 9% next year), with the 2021 forecast as things return towards normality projected at 60% for the hotel. 

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And, as I discovered during my latest visit to the Chedi Lustica Bay, there is plenty on offer against a backdrop of pristine nature, clean air, space and privacy. Luxury, my friend at the start of this article would call it. 

So what is it that the Chedi is doing differently, remaining open all year, when many hotels in Dubrovnik did not open at all in 2020?

The two keys to its relative success are the amazing adventure playground which has no neighbours, as well as a management team not afraid to diversify and explore new avenues. 

It is often said that the Montenegrin coast is overbuilt and its beauty compromised. While this is certainly true in places (look away now Budva and Herceg Novi), nothing could be further from the truth on the Lustica peninsula. It really is a bubble of positive vibes and unhindered beauty at every turn, quite unlike any other I have encountered on the Montenegrin coast. And, as I was to discover on my quad bike tour, it has a deceptively rich (and extremely healthy) tourism offer.  

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When I first visited The Chedi Lustica Bay in early 2018, it was still under construction. My impression was that this was an excellent project, but it was all a little isolated from the rest of the tourist action. 

It was only on this visit that I began to fully appreciate the magic of the Lustica Bay experience, now that more has been constructed, and things falling into place. Far from being just a hotel, those 7 million square metres offer the complete Lustica experience, quite possibly one of the best such luxury experiences of space, nature, beauty and fresh air that exists in Europe today. 

Using the hotel as a base, there are breathtaking opportunities for cycling on roads where you will encounter nobody. 

Or yoga on the water, a calming way to start the day.  

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The 18-hole Gary Player golf course is not yet finished, but the driving range is open and very popular most of the year (open until November 15). 

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There were several people on the beach, and even swimming in mid-November, while the kayaks and SUP boards are available for use. 

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The fleet of quad bikes or e-bikes awaits, which can be rented either with or without guide. The quad bike guide is definitely worth it.  

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I have to confess I was a little nervous about taking the quad bike, a first time for me, but I was assured by the excellent (if slightly crazy) Chedi guides that this would be one memorable tour. 

They were not wrong.  

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What an incredible way to explore the peninsula, at one's own pace and interest level.  

Any thoughts that this might be a gentle tour sticking to the main roads were quickly dispelled, as we headed offroad for the first time, stopping occasionally to remove obstacles in our way (see above).  

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Time to admire the many beautiful churches to be found in Lustica villages.  

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A chance to observe the relaxed local way of life - Montenegro in autumn on a glorious November late morning.  

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Driving through traditional waterfront villages, an oasis of calm. 

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Our guide Milan was a Lustica local, passionate about his peninsula. He took us to some of his favourite spots where his friends like to go hiking, get away from the crowds, and enjoy barbecues in nature, such as this place by one of the Boka region's 85 fortresses, which were built by the Austro-Hungarians.   

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Fortresses which had their secrets, as Milan guided us through a 400-metre tunnel under the fortress at Grabovac.  

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Sensing our appreciation of his tour, Milan took us deeper into his world, showing us the quaint stone villages, many of whose houses are sadly in a state of disrepair. 

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While others have been beautifully restored and offer stunning views surrounded by nature and no other people. 

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The colours of Lustica in autumn.  

Wild beauty and the old normal. After months of stressing about - and writing about - the pandemic, it really felt that I had found a tiny bubble of natural freshness which harked back to how life used to be. 

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Onward we drove through the fields and past the olive groves from where Montenegro's exquisite olive oil hails. If you have the time and inclination, there are additional delights to sample, including olive oil tasting at the Moric family olive grove, as well as some quite sensational local cheeses produced by a Russian woman who moved to the peninsula 9 years ago. 

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A little donkey feeding is also on offer.  

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And everywhere, the dry stone walls lining the roads. 

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The Austro-Hungarian influence is strong in the Boka region, and not only due to the numerous fortresses. Masters of infrastructure, it seems that the Austro-Hungarians were ahead of their time, even laying the foundations a century ago of today's quad biking routes. Now we were going truly off-road.  

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But if I thought that was as off-road as it was going to get, Milan had other ideas. For he knew of places of extreme beauty on his peninsula that the Austro-Hungarians had never come across. There didn't seem to be any road, so I just kept in the line behind the quad in front. The views were outstanding, as was the weather (21C in mid-November).  

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A view of Mamula fortress, which is on schedule to open as a luxury 5-star hotel next summer.  

A tour I will never forget.  

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Huge thanks to crazy Milan and Tamara for their part in the best tourism experience of the year so far. Highly recommended. 

The tour over, it was time to return to home base to sample the off-season offer of the Chedi Lustica Bay.  

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While there were other guests swimming in the outdoor pool, the indoor one was free. 

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During my stay, the 2020 World Luxury Hotel Awards were announced, and there was good news for the Chedi Lustica Bay, which was voted Best Luxury Coastal Hotel in Europe, Best Luxury Boutique Restaurant in Europe, and Best Spa Team in Montenegro. An impressive haul of accolades which I decided to investigate. Thumbs up for the Thai coconut prawn curry, an exotic dash on a menu which otherwise focuses on organic local produce...  

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... from Thai curry to Thai massage. A relaxing way to recover from my quad biking adventures.  

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One of the challenges the Chedi team faces is attracting the local market. When Porto Montenegro opened in Tivat over a decade ago, it was understandably seen as a haven for rich foreigners, off-limits to locals. That perception has now changed, and the development is popular with locals, but I had the impression that this was how The Chedi and its marina village was viewed by locals. 

That perception is also gradually changing as the marina village opens more shops and hospitality outlets, and as more locals came for a coffee and reported back. But that change in perception is also a result of the fresh approach from the hotel management, whose strategy is to increase the number of activities on offer. Not just the cycling, kayaking and quad biking, but also within and around the hotel itself, with locals more than welcome.  

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Cooking classes for adults on Thursdays. 

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Cookie and art classes for kids at weekends. 

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Free movie nights, including free popcorn, on Wednesdays. Sometimes these are held in the amphitheatre in the marina, a truly spectacular movie location. 

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And sometimes in the hotel lobby, where guests are free to enjoy the comforts of the lobby and the big screen.  

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And the kids' entertainment is not weather-dependent, and the converted conference room has never looked so appealing or popular.  

A quick video tour.  

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All these extra facilities are free of charge to hotel guests, and - in a nice gesture - also free to locals and anyone else who comes to the hotel and spends. Not a bad investment to relax in this waterfront oasis while allowing the little ones to explore and play.   

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And regional visitors are coming. Normally, they might have been eyeing a beach in Thailand and Sri Lanka this winter, but with those options no longer on the table, some fulfilling family fun with a touch of natural luxury is proving to be a pleasant if unpredicted alternative.  One great innovation which I really liked is the hotel's resort credit - Book one or more nights in a seaview room in this active lifestyle destination starting at 199 euro and use the entire room rate as resort credit and stay for free. A little quad biking, kayaking, massage, movie nights and fine dining, with the accommodation thrown in for free. 

And this new focus on activities seems to be working, with the hotel projecting much higher revenues from activities for next year. Interestingly, during my stay, a quarter of guests had signed up for an additional paid activity. Indeed, this overall shift in focus towards lifestyle, outdoor activities and the regional market is probably the best tourism response I have encountered on the Adriatic during this troubled year.  

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This has been a stressful year for us all, and I was not sure what I would encounter on my brief trip to Montenegro this time. But what stays with me some 48 hours later is that luxury. Not of the comfortable bed, the excellent views, the delicious food, the memorable activities. But the luxury that my friend mentioned at the beginning - nature, space, fresh air privacy. It really felt like the old normal, the things we used to take for granted. Lustica Bay is a bubble, no doubt, and the energy of the people living and working there rubs off on you.   

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One of the most interesting adaptations to the new realities has been the decision to convert some rooms into office units. These new offices are available for an all-inclusive price of 790 euro a month and unlimited parking and high-speed Internet. Having access to all the hotel facilities and activities, as well as inspiring views such as from this office above, it is one more innovative angle that is already bearing fruit; the first digital nomad has already taken advantage of this offer for an initial 3-month period. 

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The old normal at the end of 2020. It does exist. Not that epidemiological measures were not in place. They absolutely were, and seemingly adhered to much more strongly than I am used to back in Croatia. Perhaps part of the reason for that feeling was that I did not come across that many people - perhaps 10 in all during our 4-hour quad bike tour, for example. 

Just a normal lunchtime on the Lustica marina in mid-November.  

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On the drive back to Dubrovnik Aiport, I caught sight of the traffic sign as you leave the airport. Dubrovnik to the right, 19 kilometres, Gruda to the left, 11 kilometres. And below that, some place called Tivat in Montenegro. I smiled. 

During my transfer from the hotel, my very friendly driver, a Tivat native, told me about life in Tivat before the arrival of luxury tourism and first Porto Montenegro and now Lustica Bay. 

"15 years ago, Tivat was so insignificant that it was not even mentioned on the national weather reports. And look at it today."

Indeed. Back then, the very notion that someone would go from Dubrovnik to Tivat for a weekend to relax would have been laughable. Today, that is a very common occurrence. And now if you travel 10 minutes more, you can explore wild beauty and the old normal. In luxury. A luxury that includes nature, space, beauty and endless fresh air. 

I heartily recommend it. 

With many thanks to the Chedi Lustica Bay team for arranging my visit and sharing their insights. Learn more about the magic of Lustica Bay on the official website

(Paul Bradbury was a guest of The Chedi Lustica Bay in November 2020)

Thursday, 16 May 2019

Construction of Luxury Aman Resort in Cavtat Beginning This Year

As Poslovni Dnevnik writes on the 15th of May, 2019, the saga with the former Cavtat ''Macedonia'' hotel could well have a happy end, Večernji list reports.

The story dates back to the year 2013 when a group of investors announced that the currently abandoned and devastated site will the luxury Aman resort built there. Things were of course rather complicated, which isn't remotely unusual, and in the meantime the ownership structure of the investor's company has changed, but the key player, Greek entrepreneur Petros Stathis, didn't think for even one moment to walk away from the planned and desired Cavtat investment.

Passionate about business and temperamental like any real Greek, he is the owner of several Aman hotels and resorts groups, including Aman Sveti Stefan in neighbouring Montenegro and over in Venice. Business wise, he's mostly focused on the Balkan region. He is active in both banking and real estate world and was even the director of the famous Athenian Football Club AEK.

Unlike many before him, the industrious Petros Stathis refused to give up on Croatia, and at the end of last year, in Croatia's southernmost town in the extreme south of Dalmatia, he intensified his efforts to finally get the project of Cavtat's Aman resort off the ground. Otherwise, Aman is a chain of luxury hotels in 34 locations in as many as 21 countries, and the first resort under that name was opened back in 1988 in Phuket.

Such resorts usually have only fifty rooms, and each guest is matched by four employees on average. In an interview with Vecernji list, Petros Stathis revealed that things really are finally getting going, being ''raised from the dead'' as it were, and that such a resort in Croatia, more precisely in Cavtat, is no longer just fiction.

Soon, you're coming to Croatia, does this mean that the Aman project in Cavtat is definitely going ahead?

I can say with pleasure, that the short answer to your question is yes!

I'm thrilled to be able to say that we've made progress and we expect the machines to return to their location at the end of this year. Otherwise, it was never the case whether or not the Aman Cavtat project would be realised or not, but as I mentioned before, we had a complicated beginning and we had to overcome many obstacles.

It's great, of course, to return to Croatia, but this project, believe me, is more than me. This is also about Croatia and our partners and people from this community. Our focus has always been on the future and the realisation of the resort in Cavtat so that the country could further profit through the Aman project, just how other countries have benefited from it. Whenever we start these types of projects, we want to complete it according to the plan, but it's rare that all factors are in our full control.

A project of such magnitude requires coordination and cooperation. We made a huge effort and we were lucky that we had positive support from many sides. Soon it will be six years ago since the construction of the luxury Aman resort at the location of the former Macedonia hotel in Cavtat was first announced, the first machines even arrived at the construction site, but soon after that it all stopped.

What made everything slow down over the last few years?

It's no secret that this project has a complex history. Since taking ownership of the site, we have been working hard and working with all involved parties to resume construction.

Why is Croatia interesting for you to invest in and is it easier to invest in Montenegro, for example?

As an international company, we always look globally.

Each country has a different approach to investment and development. I personally love your beautiful country and its people. I have strong family ties in Croatia and I've spent many happy moments here. Croatia is a wonderful country, rich in history, with beautiful nature and positive people with a positive business attitude that reaches international business boundaries. But the potential offered by Cavtat is the most attractive part of this story.

This is a great opportunity for us and will have a major role in current investments in Croatia. Our goal for Croatia is the same as for any other country in which we've built and invested, which is to create the best we can and leave a lasting, positive legacy of which the country can be proud. The goal of this project is to build the most beautiful resort in Croatia, in keeping with the environment and local infrastructure.

This opportunity is huge and we hope to act as a catalyst for further internal development in Croatia, now and also in the future. It's incredible when you think that more foreign tourists visit Croatia than, for example, Australia. And this is almost double the annual level. Tourism makes up more than 12 percent of Croatian GDP, and this money goes to local wages, through the construction of hotels and other related projects.

This country has a talented, entrepreneurial workforce. Half of the population speak English, but Italian and German are also spoken. And just look at the innovations you're responsible for! Everything, from chemical pencils to parachutes, bulbs, MP3 code, all created by Croats. It's time for Croatia to become more significant on the world stage, and we want to play a key role in that story.

What is the value of the investment in Cavtat and when will the new hotel be completed?

This is a huge 50 million euro project that will build the best of the best in Cavtat. This is our approach to building every resort. To provide the best. We wouldn't even launch the project if we couldn't achieve the best possible. This isn't just a hotel. This is an investment in the development and the future of Cavtat, through which we'll support local development, jobs and employment. We'll start with the works at the end of this year, and later on we'll inform you about our opening plan.

How will the Aman resort in Cavtat look and what will it offer to its guests?

Personally, I can hardly wait to see how it will look once when it's done. This is a new level of design and unification with the landscape, and local, natural materials will be used. If you look at any other Aman resort we've built, including the ones in Montenegro in Sveti Stefan, you'll get a very good idea of ​​what Aman Cavtat will be like.

Make sure to follow our dedicated business page for much more on investment and doing business in Croatia.

Sunday, 7 April 2019

How Dubrovnik is Becoming an Extension of Luxury Tourism in Montenegro

April 7, 2019 - As more luxury developments are announced and being built in Montenegro, the relationship with neighbouring Dubrovnik is changing.

2019 has been a very stimulating year for me so far, with lots of fantastic new contacts made and some really fascinating conferences attended in the region. And the more I meet people, the more I listen to conference experts, and the more I move around, the clearer some of the patterns and trends become.  

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One of the most interesting conferences attended so far was Digital Takeover in Zagreb, whose international speakers provided attendees with a wealth of information and new concepts in the fast-changing digital world. 

One of the most arresting slides was the one above, a snapshot of some of the biggest global brands and influences in our daily lives that simply did not exist back in 2000. How different life was then just 19 years ago! The slide has stayed with me ever since, as I look around the region at how things have changed, and at things that simply did not exist in 2000.  

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Things like luxury tourism in Montenegro. With the very notable exception of Sveti Stefan and gorgeous Kotor and its UNESCO bay, Montenegro has always been regarded as the poorer cousin of the magnificent Croatian coast, 1000-plus islands, and spectacular walled town such as the Pearl of the Adriatic itself. A town like Tivat, for example, was a mere village with few attractions for tourists back then, and while it was common for tourists in Tivat to visit Dubrovnik, the very notion of Dubrovnik tourists making the journey in the opposite direction was laughable. 

No longer. 

The arrival of Porto Montenegro just over a decade ago started a process which is slowly redefining the map of quality tourism in the region. As Dubrovnik grapples with mass tourism and packing in the cruise ships which generate great tourist arrival numbers but an ever-decreasing quality of tourism experience, over the border in Montenegro (just 21 km from Dubrovnik Airport), an altogether different story is emerging. And if you take a closer look, as TCN did this week, the story is mightily impressive.

Porto Montenegro was the first luxury destination for superyachts in the region. Built at a cost of 200 million euro as the brainchild of Canadian entrepreneur, the late Peter Monk, Porto Montenegro quickly became the go-to destination for the rich and famous in the yachting world. Conversations were starting in the international media that Montenegro was the next big thing in luxury travel. 

Many people laughed. Montenegro? With its terrible roads, reputation as a Russian playground, and overbuilding? It is certainly true that the infrastructure needs a LOT of work, that there has been chronic overbuilding in places, much less so that it is a Russian playground these days. What is true is that a strategy of developing Montenegro as a luxury one is working. And far from being Russian investments, they are coming from all over the world - Canada, Qatar, Egypt and Azerbaijan, to name but four. 

But how can Montenegro develop its luxury tourism with such poor infrastructure and with the overbuilding on its coast? It was something I decided to look into this week during my visit to the country, and I spent time with the stakeholders of Porto Montenegro, Lustica Bay, The Chedi, the management team of Mamula, and senior management from Portonovi. And a combination of those projects was eye-opening indeed. 

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It was during my visit to Portonovi (of which more below) that it finally hit me how the Dubrovnik connection was not only going to provide Montenegro with an abundance of luxury guests in search of things they sadly cannot find in Croatia, but also that Croatia's jewel will serve as a wonderful addition to Montenegro's luxury offer. 

Walking around the impressive 900 million euro development, which is set to open its first Phase in July, I asked how guests would come from Croatia. The road from the border is not the most pleasant arrival experience, and there are often delays at the border (read the Total Croatia guide to crossing the border from Croatia to Montenegro). 

"We will have several options apart from land transfers," came the reply. "People wanting to visit us from the old town of Dubrovnik will be able to do so by speedboat. We have a full customs house and passport control at the resort (see photo above, taken on a cloudy day this week). With our helipad over there, a helicopter transfer direct from the airport will take just minutes. And there will also be an option for a transfer to the border village of Molunat from the airport, and onward speedboat from there."

No need to worry about the transfer issues or poor infrastructure on the roads for high-spending guests. Now Dubrovnik and its airport with its millions of tourists and arrivals is the perfect catchment area for Montenegro. 

The irony, of course, is that all this luxury tourism could - and should - be happening in Croatia, including Porto Montenegro itself. That project was supposed to happen in Croatia, but a certain politician allegedly required too much money to make it happen in Croatia. 

And so Croatia's loss sadly looks set to be very much Montenegro's gain. For there is plenty more happening just a short boat ride away from the Pearl of the Adriatic and its accessible airport. 

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The biggest investment in Montenegro is Lustica Bay, a 1.1 billion euro project from Egyptian company, Orascom. A greenfield site of no less than 7 million m2 is being transformed into one of the luxury destinations in Europe. 7 luxury hotels, 2 marinas, one village of 2,500 inhabitants, and a Gary Player 18-hole golf course are but some of the highlights. 

Also accessible by boat from Dubrovnik, and also with its own customs house, Lustica Bay is one more massive piece in Montenegro's crown. It was recently voted the Best European Property Development at the Luxury Network International Awards in Dubai. The opening of its flagship 5-star hotel, The Chedi Lustica Bay, last July has taken Montenegro's luxury tourism story one step further. Check out the opening party in the video above.

A key component of the strategy of all these major investments in Montenegro is the concept of building a community and injecting life into the developments, rather than just selling an apartment which is used two weeks a year. I am not aware of any such projects which have successfully managed to do this in Croatia, but Porto Montenegro, for example, has become an accepted extension of life in Tivat. 

Lustica Bay will take that concept to the next level. Construction in Centrale has begun, a village of 2,500 inhabitants which will have many of the facilities one would expect to find for everyday life, including a school. And far from this being a Russian playground, Lustica Bay has so far sold to over 30 nationalities, with growing purchases from local Montenegrin buyers. 

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We will be doing a big feature on golf in Croatia and Montenegro shortly, but as the Croatian government faces an imminent $500 million arbitration loss over the failed Srdj golf project above Dubrovnik, construction of the 18-hole Gary Player championship course on Lustica continues apace. One more luxury addition that Dubrovnik's guests and airport passengers will be able to enjoy in the 'poorer cousin' over the border.  

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Accessibility to Lustica Bay and the other resorts is also possible from nearby Tivat, which is just a 10-minute drive away. With more than 1.2 million passengers in 2018, airlines such as Lufthansa have begun servicing Tivat, and airlines are waking up the possibilities of this year-round luxury destination. 

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And while the exclusive Aman resort of Sveti Stefan the other side of Budva may be the current poster child for heritage top-end tourism on the Montenegrin coast, there is a new kid on the block, as Mamula Fortress looks set to open as a 5-star resort in 2021. 

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An even shorter distance from Dubrovnik and its airport. 

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Although I know Porto Montenegro and Lustica Bay quite well, I had never been to Portonovi, and was very grateful to Chief Sales Officer Sherri Motazed for giving us an extended tour of the project, which will open this summer with its first phase, with the addition of the first One&Only resort in Europe in 2020. 

You can get an idea of how it will look when finished from the animated video above.

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And Dubrovnik and its airport really are quite handy... 

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(Photo credit Marko Stefanek) 

The slogan of the Montenegro Tourist Board is 'Wild Beauty' - the UNESCO World Heritage site of the Bay of Kotor is just one outstanding attraction for those looking to explore. 

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(Photo by Romulic & Stojcic)

As is another UNESCO World Heritage Site, Dubrovnik, just across the border. 

Dubrovnik will always be the number one attraction in the region (learn more in our Total Croatia 'Dubrovnik in a Page' guide), it is simply too fabulous to be anything but number one. But as the famous city grapples with over-tourism and lack of luxury quality offer, the neighbours are watching and set to take advantage. 

Aman, The Chedi, One&Only are some of the names which are already in luxury tourism in Montenegro, but not in Croatia. Word on the street in Montenegro from industry insiders this week will soon see Four Seasons, Ritz Carlton and Raffles added to that list, as well as others.

The Kings of Accidental Tourism in Croatia are busy trumpeting increasing tourism numbers from lower-spending guests. The cramming of tourists into its destinations is reducing the quality of the experience, while the battle for the luxury tourism market is all but lost. Business Insider recognised the strides Montenegro is making, listing it (along with places like Rwanda - learn about their incredible progress 25 years after a genocide before you judge) in the top 15 destinations for billionaires to visit in 2019.

Will any of the decision-makers in Croatia notice, or even care, let alone do something about it? For more information on just how far behind Croatia is in the luxury foreign investment scene in comparison to its 'poorer cousin', read more in Lessons from Montenegro: Penthouse Haludovo in 1971, Croatia's Biggest Foreign Adriatic Investment

Me, I am off to buy a speedboat to start my transfer business from Dubrovnik to Montenegro.

 

Tuesday, 12 March 2019

As Investments Fall, is Croatia's Hotel Business Stagnating?

As Marija Crnjak/Poslovni Dnevnik writes on the 12th of March, 2019, Croatia's hotel sector stagnated last year in terms of the number of new rooms and in the sense of the level of entry of foreign hotel brands. A lot of this, but of course not all of it, is because Croatia has deemed it more profitable to build and invest more in private accommodation, an often ''grey'' area of Croatia's tourism industry with much lower taxes and a very poor level of general regulation. The level of major investments in new hotel rooms has fallen significantly, the number of which grew by a mere one percent in one year.

Due to all the above mentioned conditions, the market is still dominated by local investors, quite a few new names have appeared on the scene in the last year, which are still to be properly positioned as hotel brands, according to the annual global report on hotel chains in 22 European countries, "European Chains & Hotels Report 2019" by the Horwath Consulting House HTL. In the Republic of Croatia, more than a quarter of these hotels, more specifically 186 of them, operate under 43 brands in total, of which 22 are local and 21 are international brands.

"High seasonality and an unfavourable environment for investors, especially with [granting the necessary] permits, are the main reason we're in 159th place on the Doing Business list, they're the biggest barriers for foreign investors, who find it difficult to decide on taking risks in developing projects in Croatia, although a few positive examples have occurred on the market which do lead to more optimism,'' stated Siniša Topalović from Horwath's Zagreb-based office.

Horwath's analysis, which is based on the numbers from Real Capital Analytic, only takes into account investments of more than 5 million dollars, reveals that investment in hotels in Croatia is down by as much as 90 percent, from 59 million euro to a mere 7 million euro.

''The growth of hotel brands in 2018 in Croatia (4 percent) should be observed through the proper placement of several local hotel names, and only time will reveal whether or not these names will be branded on the market,'' Topalović explained.

Additionally, although Croatia can be statistically put in a very good position in terms of the number of brands operating here, the market situation shows that the level of activity is lagging behind some countries which are considered to be weaker than Croatia. A good example of that is Serbia and its increasingly popular capital city of Belgrade, which has received 40 new hotels since 2014, with growth in the hotel sector in Belgrade mainly based on foreign investments and globally respected brands such as Crowne Plaza, Radisson Blu and Luxury Collection.

Although the RevPar (revenue per hotel room) rose by an average of 16 percent in Croatia in 2018, this year a slow down is expected, caused primarily by other Mediterranean countries which are recovering from their respective problems to return to the market (this includes longtime tourism kings like Turkey and Tunisia).

The main potential seems to lie outside of the height of the summer season. Along with Serbia, where further growth is expected in the hotel segment, Albania has some great potential for foreign investors, Albania currently has the smallest share of branded hotels per total number of rooms (2 percent), and Montenegro, Croatia's neighbour to the south, also offers investors fairly favourable investment conditions and is very active in encouraging a more luxurious tourist product for the country.

Greece, known for its numerous financial issues, has entered the world's top fifteen tourist destinations despite the country's somewhat infamous ups and downs, with 150 new luxury hotels ''born'' in Greece in 2018, becoming a destination in which more than one in five hotels is in the category of 4 or 5 stars. Last year, the largest amount of investments in hotels went from the United States across the Atlantic to Spain (2.1 billion euro), following came transactions from Israel to the United Kingdom totaling over one billion euro, French investors also invested 951 million euro into the United Kingdom.

Despite all of the potentially (and likely) damning economic risks from Brexit, one of the European continent's most powerful countries, the United Kingdom, had a total of nearly 4 billion euro in investment in its massive hotel business. In 22 countries from the Horwath analysis, there were a total of 146,600 hotels on the market last year with more than six million rooms, with an average of 61 rooms per hotel. The least-branded hotels had Albania, only 12, while France has 3885 hotels in the hotel chain.

Make sure to stay up to date with our dedicated business page for more on investment and doing business in Croatia.

 

Click here for the original article by Marija Crnjak for Poslovni Dnevnik

Sunday, 3 February 2019

Dubrovnik Highway: Talk of 800 Million Euro Project Reignited

After a decade of silence and complete inactivity, the Croatian Government is moving once again towards the temptation of a highway construction project towards Dubrovnik, a move initially started by former PM Ivo Sanader.

As Kresimir Zabec/Novac writes on the 2nd of February, 2019, after a rather unnecessarily lengthy and of course unclear title, the conclusion of the ''study documentation for the road connection of southern Dalmatia to the motorway network system of the Republic of Croatia from the Metković junction to the future Pelješac bridge and from the Doli junction to the City of Dubrovnik'' (yes you can take a breath now), which was adopted during Friday's Government session held in Dubrovnik, has actually led back to the beginning of re-activating the old plan to build a highway to Dubrovnik.

The last time constructing a highway to Dubrovnik was mentioned was way back in 2009, ten whole years ago, when a construction contract worth 3.675 billion kuna was signed in Osojnik in the presence of the controversial former Prime Minister Ivo Sanader, an amount which didn't include the VAT for the planned Doli - Dubrovnik section. Although the contracts were indeed signed, the money for this project was never secured, therefore the works never started and all in all, time went by and people simply forgot about it for the most part.

Although there are permits, projects and designs from that time that still exist and could be acceptable today, Croatian roads (Hrvatske ceste) will spend 4.06 million kuna this year to take a better look at the southern Dalmatian transport system in the area of ​​Dubrovnik-Neretva County and its link with the existing highway network, and determine the feasibility of any highway construction from the existing Metković junction to the future Pelješac bridge, and then from Doli to the City of Dubrovnik. They'll also rule whether or not it is simply better to use the highway through neighbouring Bosnia and Herzegovina.

EU co-financing

Croatia's Minister of Maritime Affairs, Transport and Infrastructure, Oleg Butković, has already jumped the gun when it comes to the talks held on Friday, stating that the Ploče - Dubrovnik motorway will be built, but the question is when. He is counting on the EU being prepared to co-finance the project in the next operational period. However, some insist that a study is needed because the road image itself has changed over the past ten years, not only in southern Croatia, but also in Bosnia and Herzegovina. The motorway was built behind Ploče and the where the future Pelješac bridge will be, in neighbouring Bosnia and Herzegovina, the construction of part of the Vc corridor from Počitelj to the border with Montenegro through Popovo polje has also begun.

Compared to ten years ago, the highway would now be changed somewhat. Back then, the route went from Ploče to the border with Bosnia and Herzegovina at Neum and then continued on the other side down south to Dubrovnik.

It was estimated that eighty kilometres of highway from Ploče to Dubrovnik could cost around 732 million euros.

Today, it is assumed that the direction would go from the current Karamatići junction to the Pelješac junction, from where traffic will go down to Pelješac bridge. That equals approximately twenty kilometres of brand new highway sections. The traffic would continue along the new Pelješac road to the Doli junction, and from there 29.6 kilometers of highway would be built leading down to Dubrovnik.

According to the old 2009 project, a total of thirty objects needed to be built, of which there were ten viaducts, nine tunnels, and eight underpasses. Back then, the price of one kilometre of construction was 16.5 million euros without VAT, equalling a total of almost half a billion euros without VAT. The price of the construction of the highway from Karamatići to Pelješac is as yet unknown, but this section is also a very demanding part of the project as the route passes through the Neretva valley, so a high level of environmental protection will be required. Owing to all of the above, estimates are that the entire highway from Ploče down to Dubrovnik could stand at a massive 800 million euros.

Make sure to stay up to date by following our dedicated lifestyle and politics pages. If it's just Dubrovnik and the extreme south of Dalmatia you're interest in, give Total Dubrovnik a follow.

 

Click here for the original article by Kresimir Zabec for Novac.jutarnji.hr

Friday, 14 December 2018

Pavle Strugar, War Criminal Who Shelled Dubrovnik, Dies in Belgrade

Pavle Strugar, the war criminal who shelled Dubrovnik, causing not only wanton destruction and horrific damage to the UNESCO World Heritage Site, but also a terrible loss of life, has passed away in Serbia.

Strugar was born on the 13th of July, 1933 in Peć, in the then Kingdom of Yugoslavia, now Kosovo. The Montenegrin general served in the Yugoslav People's Army (JNA), undertaking various different roles, and eventually becoming the commander of the Second Operational Group of the JNA, which operated in southern Croatia, in 1991.

Under his command, the JNA monstrously attacked Dubrovnik in 1991, in a siege which caused tremendous damage to the city, and took the lives of both veterans and civilians. The terrible siege of Dubrovnik lasted until 1992, with Strugar retiring one year later, in 1993.

As Jutarnji reports on the 13th of December, 2018, the retired General Pavle Strugar has died in Belgrade following a short but serious illness.

Strugar was tried and sentenced for his actions, as well as for the deaths of civilians at the Hague tribunal, this was coupled with the fact that in 1991, he did nothing to prevent the horrendous war crime of the shelling of Dubrovnik. The Montenegrin initially attempted an appeal to his sentence, but that was later withdrawn.

Strugar voluntarily handed himself over to the Hague Tribunal in 2001, making a name for himself as the first Serb or Montenegrin to make such a move. Because of his part in the criminal shelling of Dubrovnik, a beloved UNESCO World Heritage Site, he was sentenced to a pitiful 7.5 years in prison, and of course, he didn't even serve that, after serving a mere two-thirds of his sentence, he was released back in 2009. 

Strugar will be buried this Saturday at the Bežanijska cemetery in the Serbian capital, according to a report from Mondo.rs.

Make sure to stay up to date with our news page for much more.

Thursday, 6 December 2018

Homeland War: Barbaric Yugoslav Attack on Dubrovnik Remembered

Back in the 90s, Dubrovnik, best known today for being the Pearl of the Adriatic, was an entirely different place. Ravaged by war and under attack from the JNA (Yugoslav People's Army) and their Serbian and Montenegrin helpers, who made sure to not only burn houses, but to steal from them too, Croatia's southernmost city suffered one of its most devastating attacks on this very day, back on the 6th of December, 1991.

As Morski writes on the 6th of December, 2018, today will remain scarred into history's bloody memory as the day when the City of Dubrovnik was defended. The attack, which began on Friday, December the 6th, 1991, at 5:50 am, saw the JNA put its weight behind its senseless and barbaric attack on the Croatian city of the arts. The aggressors launched a horrendous assault on the beloved UNESCO World Heritage site, showering the city with blows from the sea and the land, assisted by heavy weaponry including cannons, mortars, and tanks.

The JNA's end goal was to weaken and break Dubrovnik's last line of defense from the former Hotel Belvedere, which now lies in ruin as a star reminder of this shameful assault, to Sustjepan, located along Rijeka Dubrovačka. On just that day, more than 600 Yugoslav Army grenades rained down on the city's historic core, killing and injuring along their way. The JNA, Serbia and Montenegro were quickly met with international condemnation following this act of terrorism, with Serbia and Montenegro ostracised by the European Community, and by the world.

As the fires caused by the attack didn't take long spread across the city, a group of veterans located at Srđ's Fort Imperijal, a Napoleonic building at the very top of the mountain, managed to fend off the brutal and relentless Yugoslav attacks and prevent the defeat of Dubrovnik's last defense, today marks the solemn anniversary, and we honour and celebrate Dubrovnik's War Veterans Day, as Dubrovniknet reports.

During this primitive and unjustifiable attack, nineteen people lost their lives, and sixty were injured, some very seriously. Nine of Dubrovnik's buildings burned, and the damage to the UNESCO World Heritage site's historic core was vast, as it was throughout the rest of the city. At 16:00, the relentless attack ended, with the JNA accepting defeat and finally withdrawing. The courage and the enormous sacrifice of Dubrovnik's war veterans is the reason the city is as it is today.

Pavle Strugar, a former JNA General, was sentenced and rightly put behind bars at the Hague International Tribunal for failing to take command of responsibility during the horrific JNA attack on Dubrovnik on this day back in 1991. Miodrag Jokić also pleaded guilty to six counts of the charges against the JNA for the attack on Dubrovnik, he was also sentenced and jailed.

Make sure to follow Total Dubrovnik for more on the Pearl of the Adriatic.

Saturday, 10 November 2018

Economic Boost: Cash for Regional Producer with Plants in Croatia

Is an economic boost on the horizon for one leading regional producer with two manufacturing plants based here in Croatia? An extremely large cash injection might suggest exactly that.

As Poslovni Dnevnik writes on the 10th of November, 2018, Addiko European Bank for Reconstruction and Development (EBRD) and Addiko Bank have approved the DIV Group, which is otherwise the leading regional hardware and metal solutions manufacturer, a financial package of a massive total value of 30 million euro.

The funds are intended for the further investment in the long-term development of the DIV Group, with the end goal to be an increase of overall energy efficiency, the strengthening of sustainable working capital, and the restructuring of the leading group's balance sheet.

DIV Group is the leading regional manufacturer of numerous items in the wider region, and it boasts two production plants in Croatia, a well as plants in neighbouring Serbia and in Bosnia and Herzegovina. Through continuous investments in modernisation, development, new technology and staff, DIV Group has become one of the strongest producers in the entire metal industry and as a well repected and well established supplier of equipment, in the eyes of both the railway program and the automotive industry, exporting about 90 percent of its production.

Addiko Bank Croatia is well known for providing an economic boost or two, part of an international financial banking group that actively supports the growth of local businesses in Croatia, Slovenia, Bosnia and Herzegovina, Serbia, and Montenegro. As of 2017, Addiko Bank has been the sixth largest bank in the Republic of Croatia in terms of total assets.

The EBRD loan has been approved under the Direct Finance Framework, which is intended to finance the growth and development of local businesses. The European Bank for Reconstruction and Development is a leading investor in the region and has otherwise invested a huge 3.7 billion euro in Croatia, in more than 200 different projects so far.

Want to keep up with more information on the Croatian economy, doing business in Croatia and investment news? Make sure to follow our business page.

Tuesday, 26 June 2018

Petrol to Open 15 More Stations in Croatia by 2022

In addition to Croatia, the company will increase the number of gas stations in Serbia, Montenegro, and Bosnia and Herzegovina.

Monday, 28 May 2018

Top Digital Agency Wins Spark.me Start-Up Competition in Budva, Montenegro

More international success from Croatia's emerging start-up scene.

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