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Economic and Policy Environment The Authority on World Travel & Tourism Travel & Tourism: Economic and Policy Environment MONTENEGRO CHAIRMAN MARRIOTT COSTA CRUISES LOEWS HOTELS WILDERNESS SAFARIS INTERNATIONAL Pier Luigi Foschi Jonathan M Tisch Andy Payne ABERCROMBIE & KENT INC Chairman & Chief Executive Chairman & Chief Executive Chief Executive Officer Geoffrey J W Kent JW Marriott, Jr Officer Officer Founder, Chairman & CEO Chairman & Chief Executive VIRTUOSO LTD Officer CTRIP.COM MESSE BERLIN GMBH Matthew D Upchurch CTC INTERNATIONAL Raimund Hosch Chief Executive Officer PRESIDENT & CEO Arne M Sorenson Min Fan President & Chief Executive President & Chief Operating Chief Executive Officer Officer ZAGAT SURVEY LLC Tim Zagat WORLD TRAVEL & Officer DEPARTMENT OF MGM RESORTS Co-Founder, Co-Chair & Chief TOURISM COUNCIL MELIÁ HOTELS Executive Officer David Scowsill TOURISM & COMMERCE INTERNATIONAL INTERNATIONAL MARKETING, GOVERMENT Jim Murren ZARA INVESTMENT Sebastián Escarrer OF DUBAI Chief Executive Officer HOLDING CO LTD Vice Chairman Khalid A bin Sulayem VICE CHAIRMEN Yassin K Talhouni Director General MISSION HILLS GROUP OUTRIGGER ENTERPRISES Dr Ken Chu Chief Executive Officer WORLD TRAVEL & GROUP DLA PIPER Chairman & Chief Executive TOURISM COUNCIL Dr Richard R Kelley Sir Nigel Knowles Officer Jean-Claude Baumgarten HONORARY MEMBERS Chairman Emeritus Co-Chief Executive Officer MÖVENPICK HOTELS & MANDARIN ORIENTAL RIOFORTE INVESTMENTS DOLPHIN CAPITAL RESORTS ACCOR Edouard Ettedgui SA INVESTORS Jean Gabriel Pérès Gérard Pélisson Group Chief Executive Manuel Fernando Espírito Santo Miltos Kambourides President & Chief Executive Co-Chairman, Supervisory Board Chairman Managing Partner Officer TUI AG AMERICAN EXPRESS Dr Michael Frenzel SABRE HOLDINGS DUBAILAND NH HOTELS COMPANY Chairman of the Executive Board Tom Klein Jonathan S Linen President Mohammed Al Habbai Mariano Pérez Claver GLOBAL LEISURE Chief Executive Officer Chairman Adviser to Chairman PARTNERS SHUN TAK HOLDINGS ANDRÉ JORDAN GROUP Mark Harms LIMITED EXPEDIA INC ORBITZ WORLDWIDE INC Dara Khosrowshahi Barney Harford André Jordan Chairman & Chief Executive Pansy Ho Chairman Officer Managing Director President & Chief Executive Chief Executive Officer Officer FT MOORE P/L WYNDHAM WORLDWIDE TRAVEL GUARD PHOCUSWRIGHT, INC FAIRMONT RAFFLES Philip C Wolf Sir Frank Moore, AO Stephen P Holmes WORLDWIDE Chairman Chairman & Chief Executive Jeffrey C Rutledge HOTELS INTERNATIONAL President & Chief Executive Officer Chairman & Chief Executive Chris J Cahill Officer NOMURA INTERNATIONAL Officer Chief Operating Officer RADISSON EDWARDIAN PLC SILVERSEA CRUISES Lord Colin Marshall of GRUPO BARCELÓ HOTELS Manfredi Lefebvre d’Ovidio di TRAVELPORT Knightbridge Simón P Barceló Jasminder Singh Balsorano de Cluniere Gordon Wilson Chairman Chairman President & Chief Executive Chairman & Chief Executive Chairman & Chief Executive Officer Officer Officer THE HERTZ THE TRAVEL CORPORATION REED TRAVEL CORPORATION TSOGO SUN GROUP GLOBAL BLUE GROUP Frank Olsen EXHIBITIONS Brett Tollman Jabu Mabuza Per Setterberg Retired Chairman of the Board President & Chief Executive Deputy Chairman President & Chief Executive Richard Mortimore Officer Managing Director TZ ASSOCIATES LTD VISITBRITAIN Tommaso Zanzotto EXECUTIVE COMMITTEE Christopher Rodrigues, CBE HNA GROUP RELAIS & CHÂTEAUX President Chairman Feng Chen Jaume Tàpies ACCOR Chairman of the Board President UNIVERSAL MEDIA Denis Hennequin Carl Ruderman GLOBAL MEMBERS HOGG ROBINSON GROUP R TAUCK & PARTNERS Chairman Chairman & Chief Executive David Radcliffe Robin Tauck Officer ALTOUR Chief Executive President Alexandre Chemla CHAIRMAN EMERITUS AMERICAN EXPRESS HOTELPLAN HOLDING AG S-GROUP CAPITAL COMPANY President Hans Lerch MANAGEMENT RRE VENTURES Charles Petruccelli AMADEUS IT GROUP SA Vice Chairman & Chief Vladimir Yakushev James D Robinson III President Global Travel Services Luis Maroto Executive Officer Managing Partner General Partner President & Chief Executive BEIJING TOURISM GROUP WTTC Chairman (1990-1994) Officer HUANGSHAN TOURISM SPENCER STUART Qiang Duan GROUP Jerry Noonan Chairman Jose Antonio Tazón Jiwei Xu Co-leader, Global Hospitality & IMMEDIATE PAST Chairman of the Board BHARAT HOTELS LIMITED Chairman Leisure Practice CHAIRMAN Jyotsna Suri BEIJING CAPITAL IBM STARWOOD HOTELS & Chairperson & Managing INTERNATIONAL Marty Salfen RESORTS WORLDWIDE, INC GLOBAL ALLIANCE Director AIRPORT CO, LTD General Manager, Global Travel & Frits D van Paasschen ADVISORS LLC Zhiyi Dong Transportation Industry President & Chief Executive Vincent A Wolfington CARLSON Chairman Chairman Marilyn Carlson Nelson Officer IFA HOTELS & RESORTS WTTC Chairman (2004-2007) Chairman Guanghui Zhang Talal Al Bahar TAJ HOTELS RESORTS & President & Chief Executive Chairman & Managing Director PALACES Hubert Joly Officer FORMER CHAIRMEN President, Chief Executive Officer Raymond Bickson INDIAN HOTELS COMPANY & Director BEIJING TOURISM GROUP Managing Director & Chief LTD INTERCONTINENTAL Yi Liu Executive Officer RK Krishna Kumar HOTELS GROUP PLC EMIRATES President Gary Chapman Vice Chairman TAP PORTUGAL Sir Ian Prosser President Group Services & BOSCOLO GROUP Fernando Pinto Retired Chairman Dnata, Emirates Group Giorgio Boscolo JONES LANG LASALLE Chief Executive Officer WTTC Chairman (2001-2003) Chief Executive Officer HOTELS ETIHAD AIRWAYS Arthur de Haast TRANSAERO AIRLINES AIG INC James Hogan CANNERY ROW COMPANY Global Chief Executive Officer Alexander Pleshakov Harvey Golub Chief Executive Officer Ted J Balestreri Chief Executive Officer Non-Executive Chairman Chairman & Chief Executive JTB CORP WTTC Chairman (1996-2001) HILTON WORLDWIDE Officer Hiromi Tagawa UNITED AIRLINES Christopher J Nassetta President & Chief Executive Jeff Smisek ROBERT H BURNS President & Chief Executive CHOICE HOTELS Officer President & Chief Executive HOLDINGS LTD Officer INTERNATIONAL Officer Robert H Burns Stephen P Joyce LEBUA HOTELS & RESORTS Chairman INTERCONTINENTAL President & Chief Executive CO LTD UNITED AIRLINES WTTC Chairman (1994-1996) HOTELS GROUP PLC Officer Rattawadee Bualert Jim Compton Richard Solomons President Executive Vice President & Chief Chief Executive CHINA INTERNATIONAL Revenue Officer TRAVEL SERVICE, HEAD LEBUA HOTELS & RESORTS JUMEIRAH GROUP OFFICE (CITS) CO LTD WHITBREAD PLC Gerald Lawless Rong Chen Deepak Ohri Andy Harrison Executive Chairman Chief Executive Officer Chief Executive Officer Chief Executive CONTENTS ECONOMIC AND POLICY ENVIRONMENT Foreword 3 Key Recommendations 5 Introduction 11 Policy Framework 14 Economic Trends 16 Business & Operating Environment 18 Planning for Smart Growth 22 The Right Balance 22 The Middle Way 22 Greening the Economy 26 The Strategy 26 Climate Change 26 Local Environment Initiatives 29 Infrastructure 38 Stability, Safety and Security 41 Transport & Communications 43 Air Transport 43 Air Traffic Control 45 Telecommunications 46 Human Capital 47 WTTC Research Indicators 47 Constraints to Growth 48 Reaching the HR Potential 48 Market & Product Diversification 55 More than Sun & Beach 55 Year-round Tourism 56 Government’s Role in Tourism 59 Government Spending 59 Marketing & Promotion 60 Public Information & Outreach 62 Special Sections How Can Travel & Tourism Make a Difference? 21 Travel & Tourism Milestones 24 Selected Donor-funded Projects 32 National Parks & Protected Areas 52 International Aid Agencies and Other Donor/Funding Groups 63 ECONOMIC AND POLICY ENVIRONMENT FOREWORD ALTHOUGH MONTENEGRO’S TRAVEL & TOURISM IS STILL AT A RELATIVELY EARLY STAGE OF DEVELOPMENT, THERE IS NO DOUBT AS TO ITS POTENTIAL, WHETHER IN TERMS OF ITS ECONOMIC OR SOCIAL IMPACTS. NEVERTHELESS, THE MONTENEGRIN GOVERNMENT FACES A NUMBER OF CHALLENGES TO ENSURE THAT IT ACHIEVES THE RIGHT KIND OF GROWTH – FOR THE BENEFIT OF ALL STAKEHOLDERS. Despite a slowdown in the past couple of years due to the global economic crisis, Montenegro’s Travel & Tourism performance has been impressive. It already contributes an estimated 17% share of gross domestic product (GDP) and supports more than 15% of total employment in the country. And its impact is about to become even more significant. Over the next ten years, Montenegro is expected to be the fastest growing Travel & Tourism economy in the world, outranking even the BRIC countries – Brazil, Russia, India and China – according to research undertaken by WTTC and Oxford Economics. Current forecasts point to more than a 12% annual increase in Travel & Tourism’s total contribution to Montenegro’s GDP (including its direct, indirect and induced impacts), as well as an annual growth of 9% in employment – either directly in the industry or in related sectors. This should mean that, by 2021, Travel & Tourism will account for more than one third of total GDP and will support one in three jobs throughout the country. Over the same period, visitor exports are set to increase by 9.4% per annum to reach a staggering 46% of total exports by 2021. Moreover, Travel & Tourism’s impact could be even greater than forecast if the underlying policy framework is conducive to growth, ie if the Montenegrin Government continues to work towards creating the underlying conditions necessary for market confidence, dynamism and sustainability. Most importantly, the basic infrastructure must be assured to stimulate and facilitate investment and support new development such as hotels, resorts and attractions. There is strong evidence that things are moving along the right track. The new government, led by Prime Minister Igor Luksić, seems committed to continuing,
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