Podgorica, (MINA-BUSINESS) – According to Chairman of the Board of Directors of the Regional Water Supply for the Montenegrin Coast Zoran Lakusic, the so-called condo hotel model in Montenegro, originally conceived as an incentive for the development of high-end tourism, in practice leads to serious financial consequences for the public sector in some cases.

He said that this form of the condo hotel system was introduced while the Democratic Party of Socialists (DPS) was in power, with the aim of stimulating the construction of high-quality hotel capacities.

A condo hotel is a tourist facility in which apartments are privately owned but must function as part of a hotel, meaning they are rented out to tourists through a single operator and are not used for permanent residence.

According to Lakusic, the essence of this model is that the property operates as a hotel, rather than a traditional residential building.

“The problem arises when this concept is abused. In practice, it happens that a building is registered as a hotel in order for the investor to obtain more favourable conditions, lower municipal fees, and other fiscal benefits, after which the apartments are sold and used as residences or rented out outside the hotel system. In this way, the property effectively shifts from a tourism to a residential function, although it is formally still registered as a hotel,” Lakusic stated.

He added that such practice has direct financial consequences.

“The Regional Water Supply for the Montenegrin Coast and local administrations suffer significant losses in this way, which at the system level can be measured in millions of euros, because fees are calculated based on the formal rather than the actual use of properties. This reduces revenues that are crucial for financing and maintaining water supply and municipal infrastructure,” Lakusic said.