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New Russian threats to the Montenegrin economy

Sveti Stefan resort

Jasna Vukicevic

Russian officials, complaining that Montenegro’s aspirations for join NATO and the EU have led it to pursue an anti-Russian policy, have called for a cutback in the number of charter flights from Russia to Montenegro.

Some Montenegrin tourism officials said that a decrease in tourists from Russia, the apparent goal of such cutbacks, was already evident. They said that any further deterioration would be caused by market forces already at play.

The call for cutbacks came through the Russian-backed newspaper “Roskaya Gazeta”. In an article titled “The Cooling in the Balkan Resort,” Sergey Glazjev, an economic advisor of Russian President Vladimir Putin, said that policies of Montenegrin Prime Minister Milo Djukanovic in the past few years have been extremely hostile, that the Russians have been excluded from aspects of life in Montenegro and that the Russian companies and citizens are being deprived of their assets. It asserts that the main goal of Montenegro is NATO and EU membership.

Obrad Miso Stanisic, member of the Committee for the European Integration of the Montenegrin Democratic Party of Socialists rejects those assertions:

"Montenegro is not leading an anti-Russian or any other ‘anti’ policy toward any country in the world. Our national priorities and national goals are certainly European and Euro-Atlantic integration. These are our top priorities and we are conducting our policies according to them. If anyone believes that our national interests are directed against them, it is their right. But I repeat that this has nothing to do with anti-Russian or any other ‘anti’ policy.”

Strahinja Bulajic, a board member for Economics and Finance of the New Serbian Democracy, however, sees grave consequences for Montenegrin tourism and economy in the Russian stance portrayed in “Roskaya Gazeta”:

“In my opinion, this was expected. In my humble opinion, the Russians were patient enough and they waited for a certain amount of time. However since the prime minister went to the US and … the so-called sanctions from the Montenegrin side toward the individuals and officials from the Russian state… it is normal to expect that any country with dignity would use the principle of reciprocity. “

He said it remained to be seen how far Russia would go.

The reason Glazjev who called for the reduction of charter flights to Podgorica and Tivat was to redirect tourists from the Montenegrin to the Crimean coast. The President of the Montenegrin tourist association Zarko Radulovic says this message was important, but not based in facts:

"Politicians are a necessary evil. When they take their place in the office, they get all the rights to talk about what they know and what they don’t know. Therefore, we could perceive them as frivolous and incompetent. However, I do take them seriously... And these messages that are coming recently are potentially not good."

Radulovic said that the number of Russian tourists is already declining, and will continue, not because of the number of charter flights, but primarily due to the drastic decline of the value of the Russian ruble. Russian organizers of New Year’s trips in Russia already face a decrease in demand up to 50 percent compared to last year. Regarding trips abroad, this decline is at least 30 percent. Already, is clear that the entire tourist market will bear the consequences of the decrease of the ruble and the Ukrainian crisis, he said:

"The purchasing power of the average Russian tourist fell over 50%, when it comes to foreign countries because [a Russian tourist] now needs 67% more money to buy the dollar and 47% more money to buy the euro. So, this factor is sufficient to decrease the number of tourists.”

Regardless of the politicians’ threats, he said, there will be a decrease in number of charter flights, but it will be because the market has caused it.

That means Montenegrin hoteliers must turn back to the new-old market: tourists of Western Europe. But does Montenegro tourism offer satisfy their needs? Marko Djuric, the Montenegro representative of Thomas Cook travel company, said:

"Our guests are spending on excursions and most of them are booking all-inclusive offers, to be sure in advance that everything is paid for. They are complaining and avoiding the places where there are crowds and noise."

To satisfy Western Europeans, said Ewald Koenig, manager of the Sun Travel Agency, said Montenegro’s appeal must begin with lower prices and an improved travel infrastructure. He said these changes were necessary to regain western markets.

The Montenegro tourist association also expects that the prices of the domestic tourism must decrease for the next summer and that the number of visitors can be maintained only with the introduction of new flights from low-cost airline companies, said the association’s Radulovic:

"This is how I see the next two tourist seasons: we need to work three to four times more in order to have the same amount of tourists and to earn as much money as we earned from the Russians. How to accomplish that in 2015 and 2016? It can be achieved by extending the pre-season and post-season [prices], and by increasing the number of low-cost flights. So, Montenegro airlines and at least seven to eight low-cost airlines would have to start flying in April from 20 or more airports across Europe to achieve what has been achieved in Dubrovnik, Zadar and Corfu, where such airline companies are bringing 1.8 to 2.1 million tourists a year. These are the figures for each of these airports in particular."

Radulovic’s association expects a response from the government bythe end of the year regarding proposals on joint investments and subsidies to the low-cost airlines.