As Montenegro awaits a resolution between the government and the hotel complex’s lessee, “Adriatic Properties,” over the opening of the iconic Sveti Stefan Hotel and Vila Miločer after four years of closure, the municipality of Budva has taken action. The local tax authorities have blocked the property due to unpaid property taxes amounting to 82,000 euros.
The company “Sveti Stefan Hoteli,” which operates both the Sveti Stefan city hotel and Vila Miločer, as well as the government-owned HTP “Miločer,” which manages part of the Miločerski Park where “Adriatic Properties” is building the new “Kraljičina Plaža” hotel, now finds itself on Budva’s tax debtor blacklist.The financial situation for both firms is dire, as the lessee, a company owned by Greek
businessman Petros Stathis, has failed to pay rent for the hotel complex for the past two years. This situation started when an arbitration case was initiated in London, with “Adriatic Properties” demanding 100 million euros in damages for breach of contract.
“Adriatic Properties” owes 87,000 euros quarterly in rent to HTP “Miločer,” while it also owes 380,000 euros in quarterly rent to “Sveti Stefan Hoteli.” The lack of agreement between the government and the lessee has left these properties shuttered for another summer.
Local residents of Sveti Stefan recently held a protest in front of the Budva Municipality, demanding that they be included in the discussions between the government and the lessee regarding the reopening of the hotel. They believe that the details of the agreement should be transparent and accessible to the public.
It is speculated that a deal could be reached to open the Sveti Stefan Hotel this summer, with the arbitration proceedings possibly being suspended for six months to resolve the issues at hand. The situation has been complicated by the 2021 incident when local residents damaged the fence on Kraljičina Plaža, a beach that had been reserved for hotel guests and political elites. After the public uproar, the state ordered the removal of the fence, opening the beach and park for general use. Since then, the “Adriatic Properties” company has requested guarantees from the government to prevent further incidents, but the parties have yet to reach a solution, and the arbitration case continues.
Tennis legend Novak Đoković also attempted to intervene earlier this year, expressing his support to resolve the deadlock and reopen the prestigious hotel. As a global ambassador for the “Aman” hotel group, he indicated that initial talks had been held, and he was hopeful a solution would soon be found.
Meanwhile, the hotel complex remains closed, leaving a long-standing symbol of Montenegrin tourism and history in limbo. The government and private companies involved must find a resolution that benefits both the local economy and the reputation of one of the country’s most iconic destinations.
This ongoing saga with the Sveti Stefan Hotel highlights how complex and intertwined business, politics, and public interest can be. It’s frustrating to see such a valuable asset for Montenegro remain closed for so long due to financial and legal issues, especially when there are so many stakeholders involved.
What’s particularly concerning is how this standoff is affecting local residents, who are demanding transparency and involvement in the negotiations. For such a beautiful, historically significant place, one would hope the government and the companies involved can prioritize a solution that not only protects their financial interests but also benefits the public and revives an important part of Montenegro’s tourism.
Written by our correspondent A.A.
