The smooth transitionto being the youngestsovereign state inthe world has alsohelped raise awarenessof Montenegro andcreated an image ofan economically stablecountry offering uniqueattractions for tourists.must be made available to the necessaryauthorities, seminars should be heldand promotional campaigns undertaken,to ensure stakeholders are aware of, andunderstand, the new guidelines.The grey economyThe Institute for Strategic Studies and Prognoses(ISSP) estimates that the grey economy couldaccount for 25 per cent of the country’s GDP.This is partly due to the common practice ofonly declaring the minimum wage as a salary inorder to avoid a higher rate of employment tax.Informally, employees are paid at a higher rate.The Montenegrin Tourism Association, whichrepresents 80 per cent of Travel & Tourismbusinesses, also estimates that up to 50 per centof the profits made in Travel & Tourism arelost to the grey economy. This ‘grey’ 50 percent escapes taxation and undercuts the bona fidetourism enterprises.While it might be naïve to assume thatthis part of the economy could be eliminated,continuing with such a high coefficient is notsustainable and undermines the quality andcompetitiveness of the industry, <strong>WTTC</strong>maintains.The biggest contributors to the grey marketare domestic and foreign owners of secondary/holiday residences, which they rent outside thecountry, thereby avoiding the tourist tax that allrentals are supposed to incur.<strong>WTTC</strong> supports the recommendationto impose a tax on secondary residences/holiday homes to compensate for this lossin income from non-paid tourist bednighttaxes.MARKETING &PROMOTIONSMontenegro’s international image has beengreatly enhanced in recent years. The smoothtransition to being the youngest sovereign statein the world has also helped raise awarenessof the destination and created an image of aneconomically stable country offering uniqueattractions for tourists. These are summed upaptly by Montenegro’s ‘wild beauty’ branding,reinforced by the high-profile advertisingcampaigns on television channels such as CNN.Promotion and brand continuity havebeen concretised by the National TourismOrganisation (NTO), which has been operatingas a public-private partnership since its inception.The NTO is funded in part by government– including a contribution of 20 per cent ofthe total tourist bednight taxes collected (80 percent goes directly to the local tourist boards ofthe respective municipalities) – and partly bycontributions of €50,000 from each of its elevenstrategic private sector partners. Of these (seebelow for listing), three are not from the tourismsector – the banking group CKB (CrnogorskaKomercijalina Banka); T-Mobile, which hasrecently taken over the Montenegrin telecomscompany, Monet; and Plantaže, the country’sleading wine producers. Six of the partnersrepresent hotels and/or hotel groups.The NTO’s strategic partners• CKB (Crnogorska Komercijalina Banka)• The Queen of Montenegro (hotel)• Beppler & Jacobson (hotel group)• Plantaže• Budvanska Rivijera (hotel group)• Montenegro Stars Hotel Group• HTP Boka (hotel group)• JPMD (coastal zone real-estatemanagement)• HTP Primorije Tivat (hotel group)• Montenegro Airlines• T-Mobile (telecoms)The NTO’s activities also involve trainingstaff in the 17 local tourist offices and oneregional office (in the north) in the country’s21 municipalities, and it works closely with theMontenegrin Tourism Association, includingthe different sector representatives incorporatedin the association.There are plans for the NTO to openoffices in some key markets over the next yearor two. Belgrade, Frankfurt – where it alreadyhas ad hoc PR representation – and London arethe preferred choices for the first stage. Estimatesput the annual cost of operating in each marketat some €250,000.<strong>WTTC</strong> recommends that, onceits offices abroad are up and running,the Government of Montenegro steps upits funding of the NTO – at least ona temporary basis – to ensure adequate50
marketing and promotions in the markets in which it is established. There is little point in openingan office if there are insufficient funds to operate effectively.Regional cooperationFive municipalities – Bijelo Polje, Berane, Andrijevica, Kolašin and Mojkovac – have cometogether to foment municipal cooperation and to coordinate their efforts in this domain, createda regional tourism organization. So far the emphasis has rested on marketing materials, guidematerials for visitors, investment in equipment for hire and national park guide training. Plans forthe future include the introduction of surveys of guests to canvass opinion on accommodationand accessibility to the area.<strong>WTTC</strong> believes that this is an important first step towards sustained cooperation andcollaboration in tourism management and marketing. Neighbouring municipalities and local touristoffices should be encouraged to follow this example of best practice. In this way, municipalities cancombine their strengths rather than competing and pulling in opposite directions to the detrimentof Travel & Tourism.NEW TECHNOLOGIESNew technologies are already, and will become increasingly important to Travel & Tourism.Harnessing the latest technologies and understanding the ways in which customers use themwill help cast the marketing net wider and could also help to cut out intermediaries. Onlinefacilitation via the NTO’s website, www.visit-montenegro.org, is planned. Some €1.4 million isbeing invested by government to develop a new, interactive website, which will incorporate adestination management system linking to the bookable websites of Montenegrin suppliers fromall sectors. This could be an indispensable way of maximizing earnings and making the customer’slife easier.51
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