Montenegro’s Tourism Satellite Account Goranka Lazovic, Ministry of Tourism and Environment of Montenegro, Slovenia, Dolenjske Toplice th October 2007

TSA Montenegro case Key results are: - For the fourth consecutive year, Montenegro has been ranked by WTTC among the world’s top three destinations in terms of forecast travel & tourism growth over the coming decade - The contribution to GDP has risen steeply over the past three years as the growth in the number of visitor, their spending and the investment spending to support them has exceeded expectations - Further rapid growth is expected over the coming decade, with the contribution of travel and tourism set to rise to over 27% of GDP while employment increases to more than 40,000 persons (25% of total employment) - Near-term growth is driven by investment opportunities already in train, whilst foreign visitor numbers and spending will continue to expand at double-digit rates

TSA Montenegro case The first TSA report was prepared for Montenegro in the period end of 2003 to the begging of 2004 contented annual data for 1988 – 2002 The TSA was based upon application of derived travel and tourism ratios or weights to detailed sector’s breakdowns of the main items of the national income accounts – consumption, investment, government spending, exports, imports and employment The TSA was updated in December 2004 to add information then available for 2003 In February 2007, the TSA was again updated for information available for 2004, 2005 and for 2006, in order to take into account the rapid development in Montenegro tourism over the past few years The forecast for the next ten years was then reviewed, in order to policymakers be better informed– both in government and the private sector

TSA Montenegro case Montenegro Travel & Tourism Economy, 2006 Euro mn Personal consumption 86,6 6,4% of total consumption Business travel 11,2 Corporate 9,4 Government 1,8 0,3% of govt consumption Visitor exports 287,8 68,0% of service exports Govt individual spending 1,1 0,2 of govt consumption Tourism consumption 386,8 Govt collective spending 19,0 3,4% of govt consumption Investment 90,4 20,0% of investment Merchandise TT exports 22,8 4,3% of goods expors Total Tourism Demand 519,0 less imports 190,0 12,0% of imports Tourism economy GDP 329,0 18,0% of GDP Memo: Tourism Employment (000s) 24,5 16,0% of total employment

TSA Montenegro case Importance of travel & tourism measuring (through the TSA’s basic concepts): Objective is to measure the contribution of travel and tourism to economy activity The conventional figures underestimate the sector’s overall importance This results in underinvestment in tourism and inadequate emphasis in policymaking The account is drawn up in an analogous way to the regular National Income Accounts

TSA Montenegro case Towards for New Sustainable Tourism: raising awareness of the importance of Travel & Tourism promoting synergies between the public and private sector generating profit as well as protecting natural, social and cultural environment

TSA Montenegro case INDUSTRY MEASUREMENT The need for an annual TSA Developing a TSA on an annual basis so that adequate data is available to factor Travel & Tourism into economic and employment strategies

TSA Montenegro case ENVIRONMENTAL SUSTAINABILITY National Parks and spatial planning - recommendations the introduction of a fee to enter National Parks to reinvest in the Parks’ upkeep and staff training - suggestions that training for the municipalities in terms of spatial planning is provided as a matter of urgency given that they are now in charge of deciding their own plans - supports the Ministry of Tourism and Environment’s framework of a ‘home-built’ architectural brand for the north of the country to blend in with the existing environment and to incorporate energy efficient building technologies

TSA Montenegro case MARKET AND PRODUCT DIVERSIFICATION Spreading the benefits of tourism Diversifying into niche products Developing central region tourism MICE market Gastronomic and Agro tourism Spa wellness and medical tourism Catering to the cruise and yachting market Using new technologies to market the product offer

TSA Montenegro case T&T Accounts as % of National Accounts (Estimates for ): - Personal T&T 7,08 7,82 - Gov’t Expenditures 3,48 3,58 - Capital Investment 25,80 23,40 - Exports 34,10 44,80 - T&T Imports 13,10 19,50 T&T Industry Aggregates (Direct Impact Only) - Employment 9,64 15,30 - Gross Domestic Product 10,70 16,60 T&T Economy Aggregates (Direct and Indirect Impacts ) - Employment 18,70 25,00 - Gross Domestic Product 20,70 27,10

TSA Montenegro case Conclusions: The Government of Montenegro recognize Travel & Tourism as a top priority, ensuring adequate funding for the Ministry of Tourism and Environment; Business must balance economics with people, culture and the environment and All stakeholders must share in the pursuit of long-term growth and prosperity.

THANK YOU for your attention!