2011-07-06 Report on investment policy and activities

- Project office: Zagrebačka 3/II, 11000 Belgrade, Serbia - Phone/Fax: + 381 (0)11 21 84 502 - www.tourismsupport.rs -
Support to implementation of the
National Strategy for Tourism
(EuropeAid/126970/C/SER/RS)
Ref. no. 07SER01/23/11
Analysis of investment policies and activities
and investment possibilities in tourism of the
Republic of Serbia
Final
Belgrade, June, 2011
The European Union’s 2007 National IPA programme
For the Republic of Serbia
This project is funded by
The European Union
A project implemented by HD European Consulting Group
(CONTRACTOR) in consortium with HD, CHL and ITI

Republic of Serbia
MINISTRY OF ECONOMY
AND REGIONAL DEVELOPMENT
Support to implementation of the National Strategy for Tourism
Ref. no. 07SER01/23/11
Analysis of investment policies and activities and investment
possibilities in tourism of the Republic of Serbia
Final
Author:
Vasilije Ćetković, Junior Short Term Expert for Investment Promotion
Project team leader & key expert
Janez SIRŠE
Project director HD-ECG, Belgrade
Danijel PANTIĆ
Belgrade, June, 2011
This document is prepared as a part of the project “Support to Implementation of the National
Strategy for Tourism, Ref. No. 07SER01/23/11 funded by European Union in the EU 2007 National
IPA programme for the Republic of Serbia.

Support to implementation of the National Strategy for Tourism, Ref. no. 07SER01/23/11
Analysis of investment policies and activities and investment possibilities
in tourism of the Republic of Serbia
3
Table of Contents
1 Project synopsis..................................................................................................................4
1.1 Overall objectives.............................................................................................................4
1.2 Project purpose................................................................................................................4
1.3 Planned results.................................................................................................................5
1.4 Beneficiaries.....................................................................................................................5
2 Executive summary .................................................................................................................6
3 Government policies and activities......................................................................................... 7
3.1 Governing tourism........................................................................................................7
3.2 Tourism development planning ...................................................................................9
3.3 Public investments in tourism....................................................................................10
3.4 Investment promotion ............................................................................................... 22
4 Investment activities .............................................................................................................27
4.1 Privatization................................................................................................................43
4.2 Who has invested and what investment projects are in progress ............................ 47
5 Conclusions and recommendations - What to do.................................................................84

Republic of Serbia
MINISTRY OF ECONOMY
AND REGIONAL DEVELOPMENT
1 Project synopsis
Based on the National Strategy for Tourism 2005-2015, it is recognized that there is a need for
support to implementation of the National Strategy for Tourism. It is seen as 24 months project,
divided into four components: 1) Review of Tourist Strategy of the Republic of Serbia, 2) Institutional
Support Infrastructure and Operational Plan of the National Corporation for Tourism Development,
3) Preparation and Implementation of National Corporation for Tourism Development Support
Action Plan and 4) Provision to the future Action Plans: to improve the Tourism Sector Institutional
Support Infrastructure and the Serbian Tourism Product Portfolio.
1.1 Overall objectives
The overall objective of the project is to increase the contribution of Serbia’s tourism sector to the
National Economy.
1.2 Project purpose
The purpose of this project is to:
1. Develop the capacity of the National Corporation for Tourism Development (NCTD) to fully
support the implementation of the Tourism Strategy of the Republic of Serbia.
2. Identify, facilitate and develop action plans that will enable Public Private Partnership (PPP)
investment, promote them and raise quality standards in the sector’s real estate, human resources,
tourism infrastructure and under‐developed assets.
This combines a number of separate activities:
 Identify, facilitate and develop action plans that will enable Public Private Partnership (PPP)
investment
 Promotion of tourism investment projects
 Raise quality standards in the sector’s real estate, tourism infrastructure and underdeveloped
assets
 Raise quality standards in the sector’s human resources
3. Support other Government institutions responsible for the implementation of the Tourism
Strategy of the Republic of Serbia and provide proposals for update of the Strategy related policies
in line with best EU practice.
4. Support the market positioning and branding of Serbia on the international tourism map.

5
1.3 Planned results
Planned results as defined in the Terms of Reference and in Technical Offer are as follows:
Result 1
Capacities and capabilities of the National Corporation for Tourism Development (NCTD) increased to
full operational level in line with the objectives of the Tourism Strategy of the Republic of Serbia,
especially in the fields of assessment of the HR needs, project management, financial management,
feasibility study generation and master plan development.
Result 2
Increased capacities of the other tourism development and management organizations
(national/local) in order to introduce/perform project management and destination development
activities aiming to increase quality of service and gain greater market share.
Result 3
Strategic recommendations provided on future actions and investments for further development of
the tourism sector and enhancement of Serbia’s main assets in tourism.
Result 4
Tourism Strategy of the Republic of Serbia reviewed on basis of actual analyses of world’s tourism
markets trends with recommendation for Action Plan to address identified gaps, with specific
procedures that need to be deployed for the Implementation Plan.
1.4 Beneficiaries
The beneficiary country is the Republic of Serbia. The beneficiary authority and the main project
partners are the sector for Tourism in the Ministry of Economy and Regional Development, and the
National Corporation for Tourism Development. Apart from the main beneficiaries, there are many
other institutions (non-Government), responsible for the implementation of the Tourism Strategy,
which are included in project Stakeholders’ Group.
Project is implemented by HD European Consulting Group in consortium with consulting
and research teams of HD Austria, CHL Ireland and ITI Slovenia.

6
2 Executive summary
In this document an analysis is being made about investments in tourism development,
whether are public or private sources of funding, with a focus on the period since the
adoption of the National Strategy for Tourism Development in 2006. In Chapter 3 an analysis
of public spending is showen based on the data received from MERR, Development Fund of
Serbia, Statistical Buro of Serbia and other secondary market research sources. This analysis
includes the description and comments on the system of governing tourism in Serbia,
structure of tourism budget and specific points like public spending in tourism related
infrastructure, capital projects, tourism development planning and capital provided to SMEs
development and a current system of promoting tourism investment. The quality of data
didn’t completely satisfied the needs for the analysis but it has given a picture of the public
system and provided, with the experience acquired during my work with NCTDS and other
public institutions and organizations, basis for recommendations. In Chapter 4 I tried to give
as much as I could informations about investment activity based on the secondary market
research (a primary market research would fill the gaps like “Ammount invested” since it is
rarely publicly available and couldn’t be compensated with the data on Construstion works
value – hotels and motels from the Statistical Buro of Serbia). Information about realized
investments structured by cluster, destination and tourism product could be found, but also
short analysis of the process of privatization, and most importantly, who has invested and
what investment projects are in progress. This also answers the question of the profile of the
investors in Serbian tourism and identifies people and companies which can be future
partners in tourism development. I also gave comments about the status of key investment
projects by clusters identified in the National Tourism Strategy. Finally, in Chapter 5 a list of
“to do” points is created; first part is completely copied from the National Tourism Strategy,
since I find it very relevant, and second part is based on my experience and work in the
tourism sector of Serbia.

7
3 Government policies and activities
Due to objective reasons (wars, sanctions) Serbia was absent from global tourist market for
at least a decade. After the democratic changes in October 2000 Serbia made first steps in
the fields that seemed as a natural priority: political, economic and legal stabilization, reform
of institutions and building of modern, democratic society. Turning point for tourism as an
industry in Serbia was the work on the tourism development strategy in 2005 and 2006.
National Tourism Development Strategy of Serbia was adopted in 2006 by the Government
of Serbia which sent a message of a strategic and planned approach of Serbia in tourism
development. The current Government of Serbia was formed in July 2008 (after the
parliamentary elections in May 2008), preceded by Koštunica’s Cabinet which was formed in
May 2007 (after the parliamentary elections in January 2007). The Ministry of Economy and
Regional Development (MERR), sector Tourism, continued the work of 2004-2007 Ministry of
Trade, Tourism and Services.
3.1 Governing tourism
The tourism strategy proposed a centralized approach in tourism development and the
Government of the Republic of Serbia founded the following companies in order to do so:
Public company JP “Skijališta Srbije” (Ski Resorts of Serbia) was founded in 2006 -
managing public ski resorts and other areas for skiing and winter activities, construction,
reconstruction and maintenance of ski resorts and all the equipment in ski resorts (ski
slopes, chair lifts, protection gears and special mechanization) and logistic services during
sports events.
Public company JP “Stara planina” was founded in 2006 – in charge of implementing of the
Stara planina tourism development project.
Public company “Park Palić” d.o.o. was founded in 2008 – equally founded by the Republic
of Serbia, the province of Vojvodina and the City of Subotica; key functions of the company
is to manage public investments in Palić, manage relations with potential investors (act as a
“one stop shop”), implement master plan Palić and marketing and development of the
destination.
Limited company “National Corporation for Tourism Development” of Serbia was founded
in 2009 - governmental body dedicated to implementing the Tourism Strategy of the
Republic of Serbia.
Serbia Investment and Export Promotion Agency (SIEPA) was founded in 2001 -
government agency dedicated to effectively helping foreign investors and buyers, while
raising Serbia's profile in the minds of international business decision-makers. In the light of

8
tourism investment, SIEPA is important for administering the most significant financial
incentive program for promoting foreign direct investments in Serbia.
Agency for privatization of the Republic of Serbia was founded in 2001 – government
agency dedicated to organize, facilitate and control of the process of privatization in Serbia.
In the light of tourism investment, Agency is a mechanism through which is possible to
influence the structure of the private actors by privatization.
National Tourist Organization of Serbia (NTOS) was founded in 1994 – government
organization for promotion and development of tourism of the Republic of Serbia. In the
light of tourism investment, NTOS is important for promoting Serbian tourism values and
products.
Other public organizations that have/can have a key role in the implementation of the
National Tourism Strategy are:
Regional and local tourist organizations – financed mainly by the Municipalities and/or
tourism tax and applying for their projects to NTOS, MERR and international funds.
Local economic development (LED) offices - were established in the Municipalities to
improve and enhance the capacities of its municipal governments and local stakeholders.
Regional and local development agencies and public companies – are and can be important
partners in tourism destinations development and marketing and management.
In the system of issuing and implementing government policies there is a substantial lack of
resources, among others:
1. Information system: most of the information regarding tourism performance are
produced ad hoc by the MERR staff or provided by the local tourist organization with
no consistence and “big picture”. Other important sources like the Statistical Buro of
Serbia didn’t change the methodology for a long time. There was an attempt made
by the director of NCTDS in creating a permanent system of measuring tourism
products performance but was never implemented. This is a huge obstacle in
defining and measuring government policies.
2. Human resources: maybe the plans and policies are good but the question remains
who will implement it. There is a clear need to have teams of professionals in the
Ministry and related public organizations that will independently of the political
cycles lead the development and coordinate strategies and policies implementation.
3. Trust: inherited system and “way of doing things” has a negative impact on any new
government policy or activity whether is more or less good. Like the previous, this
remains part of the bigger project – reformation of government institutions and
governing processes in order to have results and trust. This is especially important if
we want to develop PPP and if the State is seen as unwanted partner.
The tourist policy of Serbia does not have, at present, all the necessary levers of influence on

9
the development and growth of competitiveness in tourism. There is a clear need, identified
also by the local organizations, to have a binding point on a national level. That is, in my
opinion, the position that the NCTDS should build and take.
3.2 Tourism development planning
The first milestone in the tourism development planning process is certainly the adoption of
the National Tourism Strategy in 2006 as the foundation on which later the tourism
strategies and master plans will derive. These plans represent a vision of tourism
development of particular regions and are integral part of the National Tourism Strategy.
Since 2006, 15 master plans for different regions and tourism destinations were adopted:
1. Golija mountain
2. Stig, Kučajske mountain, Beljanica
3. Palić Lake Spa&Wellness
4. Upper Danube region
5. Lower Danube region
6. The Roman Emperors Route (cultural)
7. Soko Banja Spa
8. Stara planina mountain
9. Tara mountain
10. Vlasina lake&mountain
11. Zlatibor & Zlatar mountains
12. Besna kobila mountain
13. Sremski Karlovci
14. Kopaonik mountain
15. Novo Miloševo
In development are two more master plans: Bač, Bački Petrovac and Bačka Palanka and
National Rural Tourism Master plan.
Besides the mentioned master plans, many cities and municipalities in Serbia commissioned
their own strategies or master plans of tourism and business development.
My observation on the field is that in many destinations evaluated in master plans lacks
correlation between spatial plans and master plans, realized investment and master plans or
plans of detailed regulation don’t exist at all. On the other side, in destinations where there
is a organization dedicated to implementing master plans, such as Park Palić d.o.o. – Palić
Lake or JP Stara planina – Stara planina, correlation is significantly higher.
One thing is for sure, there is a huge advancement in the field of planning and making the
prerequisite for tourism development in any sense. But planning is not enough. Even when
you have the best plan in the world it’s just a plan if no one is making sure that is realized. It
is a common problem in any country with no system of implementation; there is a good
strategy but no implementation. NCTDS was seen by the National Tourism Strategy as an

10
implementation body and there is a clear need to create a system of interlinked institutions
with NCTDS as a focal point. I.e. if we talk about tourism investment project development,
NCTDS will have to have cooperation in all necessary steps with other “resources” and
especially local and regional teams.
At this point, it would be good to ask ourselves one question: do we need more master plans
and if we do - where and when do we need them? Or do we need more ideas at this
moment or do we need people that will ensure that business feasibility studies are done,
planning regulations and infrastructural needs are satisfied, “products” are prepared and
launched at the investment/financial market etc.
And finally to conclude, first thing with planning is to have the support of the planner.
3.3 Public investments in tourism
The public spending in the tourism sector of Serbia is managed by the Ministry of Economy
and Regional Development (since 2007).
If we look at the budgets of the Republic of Serbia from 2007-2011, the following amount of
RSD was allocated to the tourism sector:
Table 1: Tourism sector spending in the budget of the Republic of Serbia
Budget 2007 2008 2009 2010 2011
Spending RS 595.517.786.100 654.429.163.862 719.854.143.000 825.884.941.052 898.891.736.000
MERR/Tourism 3.978.955.382 4.978.900.874 2.237.602.000 4.549.736.000 5.307.083.000
% 0,67% 0,76% 0,31% 0,55% 0,59%
Source: Ministry of Economy and Regional Development
And the structure is given in the following table:
Table 2: The structure of the MERR/Tourism sector budget in 2010
473
Tourism
Id
Number Description Ammount
411 Wages 117.507.000
412 Social contributions 22.127.000
413 Compensations 200.000
414 Social contributions employees 16.001.000
415 Employee costs 3.000.000
416 Rewards employees 1.000
421 Permanent costs 1.500.000
422 Travel costs 7.000.000

11
423 Contracted services 6.260.000
424 Specialized services (i.e. Master plans) 25.000.000
425 Maintance 2.200.000
426 Material 5.500.000
451 Subventions to public companies 2.525.000.000
462
Subventions to international
organizations 7.500.000
463 Transfers to local authorities 20.000.000
481 NGO subventions 60.000.000
482 Taxes 1.000.000
483 Fines&penalties 1.500.000
512 Equipment 5.140.000
551 National Investment Plan 743.300.000
621 Capital investment 980.000.000
4.549.736.000
One can easily notice that majority of budget is allocated to the following points:
451 – Subventions to NTOS, DMO, public companies and other public institutions and
organizations founded by the Republic of Serbia or local authorities
551 – Mainly infrastructural projects financed through NIP (National Investment Plan)
621 – Investments in tourism capital projects through public companies and loans for raising
the quality of the hospitality industry (facilitated by the Development Fund of Serbia)
The distribution on public companies from 2007-2011 is as follows:
Table 3: Subventions to public companies, by year (budgets of tourism public companies)
Subventions - 451 2007 2008 2009 2010 2011 (plan) Total RSD
JP Skijališta Srbije 1.172.000.000 1.220.000.000 625.000.000 871.800.000 1.655.000.000 5.543.800.000
JP Stara
planina/Babin zub 0 0 10.000.000 988.200.000 172.000.000 1.170.200.000
NTOS 79.726.998 164.443.331 245.000.000 220.000.000 260.000.000 969.170.329
NCTDS 0 0 30.000.000 10.000.000 56.050.000 56.050.000
Total RSD 1.251.726.998 1.384.443.331 880.000.000 2.080.000.000 2.143.050.000 7.683.170.329
Table 4: Investments in tourism capital projects and approved loans, by year
Investment - 621 2007 2008 2009 2010 2011 (plan) Total RSD
Loans 199.999.999 300.000.000 138.000.000 365.713.462 100.000.000 1.103.713.462
JP Stara 1.000.000 144.614.000 0 530.000.000 1.765.000.000 2.440.614.000

12
planina/Babin zub
Park Palić doo 0 0 20.000.000 40.000.000 100.000.000 160.000.000
NCTDS 0 0 0 0 45.000.000 85.000.000
Total RSD 200.999.999 444.614.000 188.000.000 945.713.462 2.010.000.000 3.789.327.462
The MERR Program of subventions for tourism development consists of:
1. tourism infrastructure development (451)
2. grants – transfers to municipalities, NGOs, LTOs, mainly for events (451, 463, 481)
3. loans – credit line for SMEs for raising hospitality service (621)
Tourism Infrastructure Development
I structured the data that I received from MERR about investment in tourism related
infrastructure from two sources:
1. MERR program for tourism related infrastructure development
2. National Investment Plan (NIP)
Table 5: Investments in tourism related infrastructure, by tourism product, by cluster, by
year, period 2006 - 2010
Tourism product Cluster Destination 2006 2007 2008 2009 2010 Total €
Mountain SES Stara planina 2.137.218 2.773.437 3.309.027 1.494.737 11.799.105 21.513.524
Stig, Kučajske
planine -
Beljanica 258.947 694.737 139.411 1.093.095
Besna Kobila 210.526 210.526
Vlasina 36.414 36.414
SWS Kopaonik 88.999 15.352 1.473.684 1.837.688 1.631.579 5.047.303
Zlatibor 49.560 264.633 421.053 886.316 1.060.076 2.681.637
Golija 1.430.659 63.621 685.905 157.895 2.338.080
Zlatar 274.189 460.421 600.000 200.000 48.381 1.582.991
Divčibare 662.388 273.684 315.789 1.251.862
Rudnik 66.211 66.211
Kruševac 31.579 31.579
Other Other 1.692.111 2.962.708 124.211 4.779.029
Kosovo Štrpci 105.263 105.263
Mountain Total 6.630.486 6.606.383 7.805.458 4.892.425 14.802.762 40.737.514
Touring BG Lower Danube 98.947 267.368 2.133.763 1.776.088 1.979.293 6.255.460
Viminacium 665.263 665.263
Topola 11.681 11.681

13
VOJ Upper Danube 11.738 525.105 536.843
Sremski
Karlovci 315.789 184.211 500.000
Sremska
Mitrovica 463.158 463.158
SES
Stig, Kučajske
planine -
Beljanica 757.841 757.841
Boljevac 421.053 421.053
Zaječar 142.421 42.105 184.526
Other Other 166.421 360.714 527.136
SWS Tršić 94.737 94.737
Valjevo 7.945 7.945
Touring Total 277.106 2.321.555 3.566.335 2.239.246 2.021.399 10.425.641
Lake VOJ Palić 678.654 2.423.860 86.691 573.007 808.491 4.570.703
Bela Crkva 9.158 20.710 37.895 67.762
SES Merošina 210.526 210.526
Lake Total 678.654 2.423.860 306.375 593.717 846.386 4.848.992
Health tourism SES Sokobanja 495.506 460.770 315.789 12.632 26.316 1.311.013
VOJ
Banja
Junaković 842.105 842.105
Novi Bečej 315.789 315.789
SWS Vrnjačka banja 214.457 84.211 240.057 538.725
Kuršumlija 259.359 21.053 280.411
Ovčar banja 31.579 31.579
BG Obrenovac 421.053 421.053
Arandjelovac 110.306 21.053 12.632 143.990
Health tourism Total 709.963 914.645 1.050.583 867.368 342.105 3.884.665
Nautical tourism VOJ Upper Danube 228.305 556.521 784.826
Novi Sad 105.002 184.671 289.673
BG Lower Danube 764.774 10.105 12.632 787.511
Nautical tourism Total 333.307 1.505.966 10.105 12.632 1.862.010
City break VOJ Novi Sad 204.000 499.474 26.316 729.790
BG Belgrade 315.789 31.579 37.579 384.947
SWS Jagodina 202.523 202.523
SES Niš 57.895 57.895
City break Total 204.000 499.474 602.523 31.579 37.579 1.375.154
Other SES Vranje 421.053 9.789 430.842
Merošina 126.316 126.316
Other Other 177.484 193.684 371.169
SWS Kraljevo 12.632 12.632
Kuršumlija 12.632 12.632
Loznica 6.105 6.105

14
BG Topola 12.632 12.632
Other Total 177.484 614.737 53.789 126.316 972.327
Special interests VOJ
Sremska
Mitrovica 297.895 157.895 455.789
SES
Stig, Kučajske
planine -
Beljanica 126.316 126.316
BG Ub 20.853 20.853
Special interests Total 126.316 318.747 157.895 602.958
Events SWS Čačak 34.737 34.737
Events Total 34.737 34.737
Grand Total 9.011.001 14.398.199 14.274.864 8.725.493 18.334.441 64.743.999
The quality of detailed data for investment in tourism related infrastructure received from
MERR is not excellent but sufficient enough to give us a good picture of government
activities. One thing is for sure, most significant public investment was in the mountain
product (40,7 mil € out of 64,7 mil €) and even more if we take into account the subventions
and investments realized through the public companies JP “Skijališta Srbije” and JP “Stara
planina”. Data marked as “Other” in Mountain product area of the table couldn’t be
classified since i.e. the project “Ski infrastructure Kopaonik, Beljanica, Divčibare and Besna
Kobila” refers to many mountain destinations. Most significant investment in the mountain
product was the project of development of Stara planina mountain resort, followed by
Kopaonik, Zlatibor, Golija, Zlatar, Divčibare and other mountain destinations. Other big
investment was in, as I classified it, in touring tourism product, before all Lower Danube
region and part of the Roman Emperors Route. The biggest infrastructural project was in
Archeological site Lepenski Vir at the Danube coast which includes dock, apartments,
restaurant, visitors’ center, research center, infrastructure, swimming pool etc. Total
investment is around 8 mil € which is higher than represented in the table from
MERR/Infrastructure and NIP so there had to be other sources of financing. Other
investment projects were in archeological sites such as Viminicium, near Kostolac, Felix
Romuliana, near Zaječar, Sirmium, near Sremska Mitrovica; places at the Danube coast:
Sremski Karlovci, Silver Lake, Golubac and Golubac fortress etc.; infrastructure for religious
tourism next to the monasteries, next to other cultural sites, cycling tracks along the Danube
etc.
It’s interesting to note that the product with great potential Health tourism/Wellness/Spa
didn’t receive much funding which can be explained with the status quo situation regarding
the special hospitals and the unresolved situation between Pension and invalid fund (PIO) –
State and the State itself. Most of the investment went to Palić Lake which pretends to be a
modern Panonia Wellness/Spa but still Lake/Congress/Sport destination so I classified it as
Lake Tourism product. Other big investment in tourism development of spas in Serbia is in
Sokobanja: master plan, plans of detailed regulations, infrastructure. I would like to note
that some investment couldn't be classified in tourism products such as: Master plan Lower

15
Danube region, Upper Danube region, Stig&Kučajske planine&Beljanica, Felix Romuliana,
Tourism Satellite Accounts (TSA), subventions for rising hospitality services and project of
solid waste disposal treatment in many cities in Serbia.
The lack of funding in national and local budget could be compensated if private public
partnership (PPP) is introduced in commercial infrastructure (airports, marinas etc.) and
resort development (i.e. Stara planina, Novo miloševo spa). In example, there are 39
registered airports in Serbia, 5 of which are international:
- Airport „Nikola Tesla“, Belgrade
- Airport „Batajnica“, Belgrade
- Airport „Konstantin Veliki“, Niš
- Airport Vršac, pilot academy
- Military Airport Ponikve, Užice
The military airport Ladjevci, near Kraljevo, between Zlatibor and Kopaonik, 2h of driving
from terminal to the hotels, is expected to be adapted, with the support of Turkish and
American investors, for civil air transport. There are big expectations from Zlatibor in
recovering former military airport Ponikve, just 25km away. A study has been done by
Chamber of Commerce Užice, public company “Aerodrom Ponikve” is founded by the Užice
municipality and their first task is to organize donor’s conference. The locals think that the
airport can be sustainable through tourism traffic and transport of goods, mainly raspberries
and blackberries. But the question remains the same with every airport is it sustainable
project, is there enough tourists, passangers, trade etc. In example, airport in Niš, which was
reconstructed with the help of the Norwegian Government in 2003, is not profitable. That is
why, I think, in tourism development there has to be an interminister working group,
because cooperation is needed, like in this case (airports and roads) with the Ministry of
infrastructure.
Grants
Grants under budget points 451, 463 and 481 are transfers to local tourist organizations,
municipalities and NGOs. I didn’t go deeper into analysis of these transfers since the share of
grants in the total tourism budget is not significant and there are at least 200 contracts
annually. Majority of these grants are aimed at Events tourism product which has a big
tradition in Serbia. Some of them are already recognized international events such as
trumpet fest in Guča and Exit music festival in Novi Sad. I am sure that among hundreds of
different manifestations and festivals few more will find their place in the world tourism
map.
MERR loans for rising hospitality service quality and the Development Fund of Serbia
I received the data from the Development Fund of Serbia about tourism related approved
loans from 2006 to June the 7th 2011 which is represented in the following table:

16
Table 6: Type of tourism related approved loans by the Development Fund of Serbia, period
2006 – 07.06.2011.
Type of loan 2006 – 7.6.2011
MERR loans 2.449.291.019,00
Investment loans 2.173.200.000,00
Loans for undeveloped Municipalities – companies 827.300.000,00
Start up loans – persons 369.320.000,00
Start up loans – companies 327.710.000,00
„Bank of Greece“ investment loans 317.000.000,00
Loans for persons 270.183.000,00
Short-term loan 257.000.000,00
Loans for undeveloped Municipalities – persons 49.700.000,00
Program for development of the City of Kragujevac, Municipalities Bor, Vranje
and Bujanovac and 13 most undeveloped Municipalities 20.000.000,00
Loans for Kosovo - companies 7.077.504,00
Loans for Kosovo - persons 2.400.000,00
Total RSD 7.070.181.523,00
Source: The Development Fund of Serbia
MERR loans are actually loans approved by the MERR and facilitated by the Development
Fund of Serbia. Other types of loans are all tourism related loans approved by the
Development Fund of Serbia. For a depth analysis I didn’t included the type of loans marked
red, since there is a huge number of contracts for relatively smaller share of total approved
loans.
Table 7: Tourism related approved loans by the Development Fund of Serbia by type, by
year, period 2006 – 07.06.2011.
Row Labels 2006 2007 2008 2009 2010 2011 Total RSD
MERR loans 568.600.000 919.200.000 422.000.000 166.900.000 372.591.019 2.449.291.019
Investment loans 237.200.000 437.500.000 531.000.000 596.000.000 361.700.000 9.800.000 2.173.200.000
Loans for undeveloped
Municipalities –
companies 45.300.000 102.000.000 252.500.000 152.500.000 275.000.000 827.300.000
„Bank of Greece“
investment loans 276.000.000 41.000.000 317.000.000
Short-term loan 72.000.000 115.000.000 70.000.000 257.000.000
Loans for undeveloped
Municipalities – persons 2.900.000 3.500.000 6.200.000 15.400.000 18.200.000 3.500.000 49.700.000
Program for development
of the City of Kragujevac,
Municipalities Bor, Vranje
and Bujanovac and 13
most undeveloped
Municipalities 20.000.000 20.000.000
Total RSD 900.700.000 1.681.500.000 1.217.200.000 1.030.800.000 974.991.019 288.300.000 6.093.491.019

17
In the following table are loans classified by tourism product. Please note that I named
“town tourism product” all loans approved for hotels, villas, apartments in towns
throughout Serbia. They may be in reality connected to some other tourism product (i.e.
MICE, touring) but it was difficult to classify them accordingly. Also, “industry tourism
product” refers to all loans approved to tourism supporting industries and for working
capital.
Table 8: Tourism related approved loans by the Development Fund of Serbia by type, by
tourism products, period 2006 – 07.06.2011.
Row Labels MERR Loans
Investment
loans
Loans for
undeveloped
Municipalities –
companies
„Bank of
Greece“
investment
loans
Short-term
loans Total RSD
Mountain 581.700.000 742.500.000 138.000.000 1.462.200.000
City break 289.517.715 506.700.000 184.000.000 980.217.715
Town 359.516.406 383.700.000 96.500.000 41.000.000 927.816.406
Health 278.400.000 148.500.000 195.000.000 624.900.000
Nautics 193.400.000 39.500.000 290.000.000 524.900.000
Industry 10.800.000 191.000.000 60.000.000 257.000.000 519.900.000
Rural 356.100.000 65.000.000 30.000.000 32.000.000 491.000.000
Lake 139.000.000 41.000.000 18.500.000 200.200.000
Transit 64.000.000 36.800.000 1.300.000 103.500.000
Wine 90.356.898 4.000.000 5.000.000 99.356.898
Sport 44.000.000 14.500.000 20.000.000 78.500.000
Touring 37.500.000 40.500.000
Other 33.000.000 35.500.000
Events 5.000.000 5.000.000
Total RSD 2.449.291.019 2.173.200.000 827.300.000 317.000.000 257.000.000 6.093.491.019
Like with infrastructural project, the highest amount of loans was provided to mountain
destinations. The structure of these loans by mountain destinations is:
Table 9: Structure of tourism related loans approved by the Development Fund of Serbia by
mountain destinations, period 2006 – 07.06.2011.
Mountain Loans RSD
Zlatibor 522.400.000
Kopaonik 500.000.000
Mokra Gora 90.000.000
Divcibare 89.800.000

18
Stara
Planina 55.500.000
Golija 53.500.000
Tara 46.600.000
Užice 46.000.000
Zlatar 43.400.000
Rudnik 15.000.000
Total 1.462.200.000
When it comes to city break and “towns” the situations is as follows:
city break destinations, period 2006 – 07.06.2011.
City break
destinations Loans RSD
Beograd 817.717.715
Novi Sad 162.500.000
Total 980.217.715
“town” destinations, period 2006 – 07.06.2011.
"Town" destinations Loans RSD
Ivanjica 261.500.000
Kragujevac 128.000.000
Ruma 85.000.000
Novi Pazar 67.000.000
Jagodina 50.000.000
Kraljevo 33.200.000
Apatin 32.700.000
Valjevo 20.500.000
Svilajnac 20.000.000
Sicevo 20.000.000
Palić 20.000.000
Leskovac 17.800.000
Bac 16.000.000
Kruševac 14.500.000
Beograd 14.000.000
Senta 13.000.000
Bački Petrovac 13.000.000

19
Vršac 12.716.406
Sombor 12.000.000
Gornji Milanovac 12.000.000
Lajkovac 8.000.000
Pirot 7.500.000
Sjenica 5.000.000
Ada 5.000.000
Novi Kneževac 4.000.000
Vladicin Han 3.700.000
Ub 3.500.000
Sremska Mitrovica 3.500.000
Velika Plana 3.000.000
Majdanpek 3.000.000
Bujanovac 2.500.000
Preševo 2.500.000
Prijepolje 2.300.000
Medvedja 2.000.000
Smederevska Palanka 1.500.000
Osecina 1.500.000
Loznica 1.500.000
Surdulica 1.400.000
Prokuplje 1.300.000
Kuršumlija 1.300.000
Bosilegrad 900.000
Total 927.816.406
It is interesting to note that significant amount of loans was approved to the development of
rural tourism product although the National Tourism Strategy didn’t recognize this product
as the priority for development. 5 years ago this product was not well known. I was told
when I visited Perkov Salaš in Fruška Gora that local villagers were laughing at Perko (the
owner) who dressed in authentic local outfit. But, as they saw the success of his idea most of
them joined him. Also, by talking with many local authorities’ representatives and tourism
workers I concluded that they all have a strong feeling towards exploiting the potentials of
rural tourism. This feeling is now widely accepted by the institutions and international
organizations but also from entrepreneurs or simply people in rural parts of the country that
don’t have where to work (closed factories, abandoned villages etc.) but know to be good
hosts.
If we break total loans by clusters and tourism product we get the following picture:

20
Table 12: Tourism related approved loans by the Development Fund of Serbia by clusters, by
tourism products, period 2006 – 07.06.2011.
SWS 3.074.706.898
Mountain 1.391.700.000
Town 589.800.000
Industry 347.000.000
Health 333.500.000
Rural 274.350.000
Transit 46.000.000
Wine 25.656.898
Sport 25.000.000
Lake 23.200.000
Nautics 12.000.000
Events 5.000.000
Touring 1.500.000
BG 1.493.417.715
City break 817.717.715
Nautics 402.900.000
Industry 71.000.000
Health 51.500.000
Touring 36.000.000
Transit 34.800.000
Rural 32.000.000
Town 26.500.000
Mountain 15.000.000
Wine 3.000.000
Sport 3.000.000
VOJ 880.666.406
Town 216.916.406
City break 162.500.000
Lake 161.000.000
Rural 130.550.000
Industry 60.800.000
Wine 56.900.000
Nautics 46.000.000
Health 24.000.000
Transit 20.000.000
Sport 2.000.000
SES 609.200.000
Health 215.900.000
Town 94.600.000

21
Nautics 64.000.000
Mountain 55.500.000
Rural 54.100.000
Sport 48.500.000
Industry 41.100.000
Lake 16.000.000
Wine 13.800.000
Touring 3.000.000
Transit 2.700.000
Kosovo 35.500.000
Other 35.500.000
Total 6.093.491.019
This show us in which tourism products the entrepreneurs trust as potential for good
business in their regions/clusters or at least the ones that the Development Fund of Serbia
and MERR trust.
Apart from mentioned budget sources there is a certain degree of international funding
available for tourism related projects. In example, out of 18.5 million € from the EU IPA 2011
funds that Serbia allocated for the Danube Strategy nearly 11 million will be directed to the
Lower Danube development, 6.5 mil € for the reconstruction of the Golubac fortress and 4.4
mil € for the water supply system in Veliko Gradište (Silver Lake). Besides that, different
funds and organizations are active in Serbia as: EBRD (European Bank for Reconstruction and
Development), EU CIP (Competitiveness and Innovation Framework Programme), GTZ
(Deutsche Gesellschaft für Technische Zusammenarbeit), USAID (United States Agency for
International Development), MDG-F (Millenium Development Goals Achievement Fund)
financed by the Spanish Government and implemented in Serbia through UN Agencies and
many more.
It is important to raise the institutional capacities of Serbia to identify the needs, prepare the
projects and implement them successfully; especially since the EU candidacy status is
expected at the end of 2011.
It is also very important to prioritize and plan public investment in tourism since the funds
are quite limited. A starting point should be to identify the markets that are achievable, both
tourism and investment markets, and then plan and prioritize tourism destinations/product
development and infrastructural investment and focus promotional efforts. Other leverages,
such as subventions to SMEs, labor market and other should follow the investment. The
government can support other destinations/products, according to its strategic plans and
political interests, so that they can also become attractive to tourist and investors.
A way to plan and prioritize public investment in infrastructure could be achieved through
SLAP 2.0 Information System developed by the Standing Conference of Towns and
Municipalities and MISP (Municipal Infrastructure Support Program) EU funded project. The
core element of the SLAP 2.0 information system is the transparent scoring system following

22
the latest EU/International standards and guidelines and every municipality can enter data
online in order to present their project to potential financing partners. The PPD provides an
insight into project main features and beneficiaries, its integration into national or local
development strategy, as well as project development level, its maturity and available
technical and financial feasibility studies.
Except from the big cities like Belgrade, Novi Sad and few other local governments cannot
financially satisfy the requirements of new tourism developments. A need exists for creation
a binding point between municipalities or jointed municipalities on certain tourism
destinations and the central body/government. The problems that appear in reality is that
there are no capacities by the local authorities to negotiate with big investors, implement
big infrastructural projects, corruption, or the case of selling land just to fill the local budget
and not following the vision of tourism destination development according to the master
plans. Together with the lack of planned regulation (i.e. Zlatibor) and rather slow process of
issuing the permits could be a major obstacle in investment development. Especially if we
take into account that no investor will wait for years to have his project start developing
unless if he takes some sort of speculative risk.
One part of the job of the NCTDS would be to act together with its local partners as a task
force in order to identify and resolve obstacles in tourism investment project development.
This is a good solution in the short run but in the long run the interests of the investors
should be represented by “business service providers” or national and local hotelier
association. Ideal solution would be to have an environment or system that already does half
of the job in investment generation and development.
3.4 Investment promotion
Promotion of investment in tourism in Serbia is a question with many answers. These
answers could be taken out from questions that any businessman/investors would ask:
- What is political and legal situation in your country? Investor is willing to take the
business risk but not willing to take the risks of new wars, political instability, and
mismanagement of contract obligations by the state etc.
- Where is Serbia? On the tourism world map, which tourism products are
competitive, where are the potential…
- Which are the markets for this project, who are the guests? There is a lack of market
oriented projects, rather based on “what we have”. We need to have feasibility
studies, business plan, at least to evaluate the offer from investors.
- What is the quality of infrastructure, how will the guest arrive? If the guests are
domestic how long they are willing to travel, if foreign how long does it take to get
from the airport to hotel (if longer than 2 hours then forget it). It is especially
important to provide necessary infrastructure for destination and tourism projects
development or at least to have a plan of infrastructural development. Good
examples of “ready to invest” destinations are Stara planina and Palić.

23
- What are legal procedures? As said before, no one wants to wait for several years to
overcome all legal obstacles.
- What are incentives available?
Since 2007, SIEPA has been administering the most significant financial incentive program
for promoting direct investment in Serbia.
Financial Incentives
 For large-scale projects, grants up to 25% of the investment amount
 For standard-scale projects, grants from €2,000 up to €10,000 per new job created
 Support schemes offered by the National Employment Service
Tax Incentives
 10-year Corporate Income Tax holiday for large investments
 5-Year Corporate Income Tax holiday for investments in underdeveloped regions
 Corporate Income Tax credits up to 80% of the investments in fixed assets
 5-year Corporate Income Tax holiday for concessions
 Carrying forward of losses over a period up to 5 years
 Avoiding double taxation
 Salary Tax and social insurance charges exemptions
 Annual Income Tax deductions up to 50% of the taxable income
 Value Added Tax exemption in Free Zones
Other Incentives
 Customs-free import
 Regional and local Incentives
- Who is my reference person? NCTDS should with its local teams act as a “one stop
shop”. Match the investor enquiry, advice and manage the development of the
investment project.
- What about the workforce? A plan of workforce development should follow the plan
of investment and investment promotion. For medium and highly qualified tourism
workers a network of Diaspora professionals should be established.
- What are the costs of doing business in Serbia? Real estate prices (and trend since
investment in tourism is not just investing in business but also in “bull” real estate
market), construction costs, taxes, efficiency in delivering the project etc. These are
the inputs for the costs of the projects which together with achiavable market prices
(income) and rise in real estate prices makes Profit&Loss Account and give the
investor the picture of how high the ROI (Return on investment) can be expected.
These answers are paradigms of the investment system in Serbia. The sole promotion is an
upgrade to this system. Let’s leave the system aside for a while and focus on sole
promotional mechanism.
So far the job of promotion of investment in tourism in Serbia was mainly done by MERR
officials, regional development agencies (i.e. RARIS – Regional Development Agency Eastern

24
Serbia, VIP – Vojvodina Investment Promotion) and municipalities with their LED (Local
Economic Development) offices.
SIEPA, national investment and export promotion agency, didn’t have tourism set as a
priority in investment promotion but did support NCTDS and other organizations in
exhibiting on real estate fairs like ExpoReal, Munich or EIRE, Milano. Agency for privatization
acted more as a mechanism rather than promoter.
In my opinion the revision of the National Tourism Strategy should give the answer what
tourism/investment markets are achievable and what are the market needs in order to
identify what to offer and prioritize efforts on investment promotion.
Right now, as a promotional tool for investment in tourism, serve investment teasers, short
description of the projects. They derive from master plans, that do have marketing analysis
and some of the master plans have short financial analysis of the investment projects. Stand
alone teasers are not financial products ready to be taken to the investment market. In
order to make the products we need to have projects with these checkpoints:
o urban planning (regulation plans adopted and ready)
o ownership (clear ownership structure)
o feasibility study
o business plan
The next step is to answer how to reach the investment markets and in which way. First
thing would be to identify the investors and decision making process. More about the
investors that have invested in tourism in Serbia I wrote later in “Investment activities”
section. Reaching the investors could be done through many ways - promotion distribution
channels. First of all, big foreign investment in new tourism resort development will not
come alone. They come in a package with tour operator, land developer, airlines companies,
insurance companies, pension funds, hotel operators, construction companies etc. Also, no
one likes to be a pioneer. The good thing with Serbia is that some major domestic private
investor emerged and could be partners in resort development like MK Mountain Resort in
Kopaonik. They share the same interest of developing the destination/resort. They also
represent in many cases “the success” which can be marketed to potential investors.
In the near future, tourism investment promotion and generation of investment project
should be managed by:
- NCTDS – central point, team of young professionals
- regional teams (VIP, RARIS etc.)
- local teams in tourism destinations – institutionally connected with NCTDS
- MERR – as a guarantee for political support and infrastructural development
- SIEPA – through incentives and their contact network
- LED units in the municipalities
- Private companies

25
The process of investment promotion should be based on national consensus in tourism
development, professional teams and success. One example, maybe not the best one, of
marketing the success is Montenegro which attracted very high amount of FDI in a short
period of time. What matters in this case is the mechanism not the essence. The rise in
investment opportunities surprised even the locals that never thought that some of their
lands could be profitable project. The story of new investment destination Montenegro,
experiences of other investors and the rise of real estate prices drew investors from all over
the world. Because of the essence (money laundry, speculative capital, corruption etc.) the
story collapsed after few years. Second example would be the rise of Tuscany as a world
tourism brand after the book and the movie “Under the Tuscan sun”, Super Tuscan wines
and other things that represent Tuscan and Italian values and culture. It seems that, in my
opinion, culturally and historically rich country as Serbia doesn’t know how to brand, market
and sell its heritage. But if you have internationally recognized brands than you have tourists
and of course tourism investments.
One thing is for sure that Serbia needs more active approach in tourism investment
promotion. This could be done through various distribution channels:
- direct contact with the identified investors in Serbia and the region
- in partnership with investors in Serbia influence their business partners and contacts
- exhibition at real estate and investment fairs:
o ExpoReal Munich in October
o EIRE Milano in June
o MIPIM Cannes in March
o Real Vienna in May
o other international real estate exhibitions like in London, Moscow, St.
Petersburg, Madrid, UAE
o regional real estate and investment fairs
o local real estate and investment fairs
 BeIRE Belgrade in November
 Rebec Belgrade in June
 InvestExpo Novi Sad in November
- organization of investment forum in Serbia
- through various associations and interest groups
- foreign embassies and international organizations in the country
- through “business service providers” contact network
- through our embassies and economic advisors in the world
- through Diaspora organizations including the network of tourism professionals
Another thing very important to tourism investment promotion is to plan and prioritize
tourism development and to set it in a time frame.
Some of the prerequisites of investment promotion activities are:
- establish local development teams
- create or order a database of hotel performances (“hotel factsheet”)

26
- conduct a primary market research and compare the findings with ones done in 2005
and 2006 (for the National Tourism Strategy preparation)
- create or order database of region’s investors, developers and other stakeholders in
resort, hotel development
- create or order a database of local “business service providers”

27
4 Investment activities
The investment strategy as part of the National Tourism Strategy is based on three pillars:
1. Restructuring, rehabilitation and improvement of the quality of existing tourism
facilities
2. Development of new tourist offer on the principles of sustainable development
3. Large investment projects of so called Urban conversion
Estimated amount of investment in the accommodation offer of Serbia until 2015 is about 4
billion €. This estimation in the National Tourism Strategy is based on the assumption that
the development scenarios of Serbia will be Serbia Approptiate to Serbs and EuroSerbia in
Network. According to the criteria given for each development scenario, development of
since 2005 is a combination of Isolated Serbia and Experimental Field (with some elements
Serbia Appropriate to Serbs and EuroSerbia in Network) which had a negative impact on
implementation of Tourism Strategy and investment in tourism and tourism development of
Serbia overall.
I would like to give some comments to the essential characteristics of the tourist sector in
Serbia in 2015 described in the National Tourism Strategy:
 redefined and internationally generally accepted image of Serbia as an attractive and
safe tourist destination;
 significant progress has been made, in 2007 a Council for promoting Serbia
was founded in order to build and position Serbia as national brand but
nothing significant has been done, this a issue that must be addressed
 stable and growing international demand for Serbia as tourist destination;
 after the rise in international demand after 2006, the demand is actually
stagnating last couple of years
 stable and growing domestic demand for various tourist products in Serbia;
 after a steady growth the demand has fallen after the financial crisis in 2009
and 2010
 four characteristic tourist clusters - Belgrade, Vojvodina, South-East Serbia, South-
West Serbia;
 the division into these 4 tourist cluster rests on the same characteristics
 good traffic connections (corridors VII and X and the Ibar Highway) with the
international markets;
 there is some progress and investment has been made in building corridor X
but it is likely that it won’t be finished before 2014., few investment took
place in corridor VII (Pan European Transport Corridor – The Danube), most
significant in marina in Apatin and docks in Belgrade and Novi Sad, the
question of port ownership and management remains open and also nautical
regulation, major ports like Belgrade (owned by Delta Holding) and Pančevo
(owned by Invej) are waiting for “better days”, there are plans to build
highway reaching Montenegro borders and replacing Ibar Highway but the

28
contract with FCC, Spain and Alpina and PORR, Austria signed in 2007 was
terminated by the new Government,
 completed process of privatization of all hotel companies;
 the process is not finished and I gave the list of state owned (few also
“socially owned”) hotels and tourism companies
 almost completely restructured, modernized and marketwise repositioned hotel and
tourist-catering offer (in accordance with world standards and categorization);
 I think it is far even from “almost completely”; however there is a huge shift
especially by the privatized hotel companies and by new Greenfield
investments
 presence of several global hotel chains (Belgrade, but some other cities as well, like
Novi Sad, Kragujevac, Nis), and a number of hotel chains of regional importance -
especially in spas;
 There are following global hotel chains present iIn Serbia: Hyatt Regency
Belgrade, Holiday Inn Belgrade (there are projects of constructing Holiday Inn
in Novi Sad and Kragujevac and Holiday Inn Express in Belgrade), Best
Western (Hotel M and Šumadija in Belgrade, My Place in Niš and Prezident in
Novi Sad) and Tulip Inn in Belgrade. Every time, someone begins construction
of the new hotel a new brand is mentioned: Plaza, Hilton, Falkensteiner,
Radisson etc. but none present in Serbia so far. The first hotel group emerged
in Serbia: “A Hoteli”, owned by Alco Group, which consists of 5 hotels in
Arandjelovac, Novi Sad, Zlatibor, Šabac and Vrnjačka Banja. They are currently
negotiating with MK Mountain Resort in Kopaonik about making a hotel
management group. Unfortunately, because of the “spa issue” there is no
hotel chain in spas in Serbia.
 application of modern standard operational procedures in all important (categorized)
accommodation and catering facilities;
 The same thing as by point “repositioned hotels”.
 Belgrade - regional MICE center and Europe-positioned city break and touring
destination;
 Belgrade is for sure a strong tourism destination but it’s hard to say regional
MICE center when the biggest regional congress, cultural and business center
Sava center is not reconstructed since the opening in 1979. I conclude that
there is not enough demand to start the project of reconstruction (which is by
the way ready). There is huge shift in activities to position Belgrade as Europe
city break and touring destinations and I think that if we continue this way the
results will come.
 a group of much demanded regional centers of winter tourism (Kopaonik, Zlatibor,
Golija, Stara Planina, Tara);
 Compared to the budget, enormous amounts of investments were made into
infrastructural development of mountain destinations, especially Stara
planina with the state owned mountain resort development project. Kopaonik
is for sure the leader of the mentioned as the regional center for winter
tourism, Zlatibor still relies on domestic demand (more than 90%), Stara

29
planina is expected to have first internationally competitive hotel at the end
of this year and little progress was made in Golija and Tara (with the
exceptions of few private initiatives like the privatization and reconstruction
of Hotel “Javor” in Kušići, Golija by Mona)
 several attractive centers of rural tourism based on the environmental experience in
South West and South East Serbia;
 As stated before rural tourism received a big push forward by private and
public initiatives and support, especially Vojvodina and South West Serbia.
With the development of Stara planina resort this would happen in Sout East
Serbia as well.
 distinguishable brand of tourism on farms, together with versatile offer of activities
and characteristic sale contents of Vojvodina;
 Like with the brand building, it is now recognized and has brand awareness
but further marketing activities are needed to strengthen the position of
Vojvodina unique tourism brands.
 a great number of programmes of tourism of special interest, starting from rafting,
hunting, fishing, equestrian sports, ecosafaris, etc.;
 There is a significant rise of these programs but needs more coherent
marketing activity.
 several nautical centers - marinas on the Danube as an expression of increasing
interest of the domestic population in owning boats and in active rest on water;
 There is a clear need for investment in marinas and nautical centers alongside
the Danube but also for more international and domestic tourists. There are
at least 5 boat charter companies in Belgrade compared to 1 in 2006, few new
marinas and docks in Belgrade and Novi Sad, new marina in Apatin, marina
and hotel development in Silver Lake, Kladovo etc., festivals that celebrate
river, but in my opinion the potentials are much higher.
 several thematic parks, inspired either by natural attractions, or by culture and
spiritual heritage of the country;
 Unfortunately this is where we really fail; there are some smaller private
initiatives though.
 A limited number of golf courses near Belgrade and adjacent to the biggest
destinations in the country.
 Except from the 9 holes course in Ada Ciganlija, Belgrade or Žabalj, Novi Sad
there are no golf courses in the country. The biggest development project
right now is in the Surčin Municipality, close to Belgrade, but there also some
other ideas like the ones at the Palić Lake or in Pančevo, near Belgrade.
In order to analyze investment activities in tourism in Serbia I created a database of
categorized accommodations and restaurants with data received from MERR. It is a basic
level of future “Hotel Factsheet” and in order to complete it is necessary to conduct a
primary market research of hotels since some data (i.e. amount of investment) is rarely
public and available (i.e. Statistical Buro of Serbia has some data on investment in hotels but

30
not allowed to publish it by legal entities). If we want to evaluate investment activities in
Serbia by clusters, destinations and products at this moment then we have to rely on data
available like The year of construction and reconstruction of the hotel and data available
from secondary sources in terms of investment and ownership and on data published by the
Statistical Buro of Serbia, section Construction. If we filter the database of categorized
accommodation according to the years of construction for hotels and garni hotels by clusters
and destinations we get the following table:
Table 13: Number of hotels constructed in period 2006-2011 by clusters/destinations
Clusters/Destinations 2006 2007 2008 2009 2010 2011 Total new hotels
BG 1 2 7 3 3 16
Arandjelovac 1 1
Belgrade 1 2 4 3 3 13
Kladovo 1 1
Smederevo 1 1
SES 2 1 3 6
Bor 1 1
Niš 2 1 3
Pirot 1 1 2
SWS 4 2 5 2 1 14
Guča 1 1
Jošanička banja 1 1
Kopaonik 1 1
Kragujevac 1 1
Kraljevo 1 1 1 3
Kruševac 1 1
Loznica 1 1
Mokra Gora 1 1
Novi Pazar 1 1
Požega 1 1
Tutin 1 1
Užice 1 1
VOJ 3 4 3 4 2 1 17
Novi Sad 2 2 4 1 9
Palić 1 1
Sombor 1 1
Sremski Karlovci 1 1
Subotica 1 3 4
Turija 1 1
Grand Total 10 8 16 12 6 1 53

31
Table 14: List of hotels constructed in period 2006-2011 by clusters/destinations
BG
Arandjelovac
Garni hotel "Kruna"
Belgrade
Beograd Art Hotel
Crystal Hotel
Design hotel "Mr. President"
Garni hotel "Balkan hotel garni"
Garni hotel "Evropa"
Garni hotel "Oasis"
Garni hotel "Townhouse 27"
Hotel "Elegance"
Hotel "Holiday inn"
Hotel "IN HOTEL"
Hotel "Life Design Hotel"
Hotel "Nevski"
Hotel "Zira"
Kladovo
Hotel "Aquastar Danube"
Smederevo
Hotel “Car”
SES
Bor
Hotel "Albo"
Niš
"Tami Residence"
Garni hotel "Niški cvet"
Hotel "My place"
Pirot
"Gali" osnovni objekat
Garni hotel "Sin-Kom"
SWS
Guča
Hotel "As"
Jošanička banja
Hotel "Oaza"
Kopaonik
Hotel “Mount”
Kragujevac
Hotel "Ženeva"
Kraljevo

32
Hotel “Botika”
Garni hotel "Crystal"
Garni hotel "Tehnograd"
Kruševac
Hotel “Golf”
Loznica
Hotel Inn
Mokra Gora
Hotel "Drvengrad"
Novi Pazar
Hotel "Denis"
Požega
Hotel "Požega"
Tutin
Hotel "Hibis"
Užice
Hotel "Zlatiborska noć" i depandans
"Vila"
VOJ
Novi Sad
"Prezident"
"Boutique hotel Arta"
"Master"
Garni hotel "Centar"
Garni hotel "Panorama"
Hotel "Aurora"
Hotel "Elite"
Hotel "Stari krovovi"
Hotel “Vigor”
Palić
Hotel "Vila Lago"
Sombor
Garni hotel "Andrić"
Sremski Karlovci
Villa "Prezident"
Subotica
Depandans garni hotel "PBG"
Hotel "Galleria"
Hotel "Gloria"
Hotel "Vila Majur" i depandns
Turija
Hotel " Hunting Lodge Turija"

33
It is evident that construction of hotels in period of 2006-2011 was mainly focused on City
break tourism product (MICE and Events as secondary tourism product) since 25 out of 53
hotels were in Belgrade (13), Novi Sad (9) and Niš (3). The question is to which product to
connect other bigger cities i.e. Subotica (near Palić Lake) and Kraljevo which had 7
constructed hotels. The lack of this analysis, besides exact data, is the fact that some
mountain destinations like Kopaonik and Zlatibor or Palić Lake and Vrnjačka Banja did have
investment but mostly in private and/or uncategorized accommodation.
Second useful information that can be extracted from the database is the years of
reconstruction of the hotels. Even though world hotels have regular reconstruction and
renovations the fact is that in Serbia majority of these hotels were privatized and then
reconstructed which makes it relevant information.
Table 15: Number of hotels reconstructed in period 2006-2011 by clusters/destinations
Clusters/Destinations 2006 2007 2008 2009 2010 2011 Total reconstructed hotels
BG 4 2 1 3 3 2 15
Arandjelovac 1 1
Belgrade 4 2 1 3 1 2 13
Negotin 1 1
SES 1 1 1 3
Leskovac 1 1
Majdanpek 1 1
Svilajnac 1 1
SWS 9 5 2 2 18
Čačak 1 1
Divčibare 1 1
Ivanjica 2 2
Jagodina 1 1
Katići 1 1
Kopaonik 1 2 3
Kragujevac 1 1
Kraljevo 1 1 2
Perućac 1 1 2
Raška 1 1
Valjevo 1 1
Zlatibor 2 2
VOJ 3 4 3 2 12
Bela Crkva 1 1
Indjija 1 1
Kanjiža 1 1
Novi Sad 1 2 3
Palić 1 1

34
Sečanj 1 1
Senta 1 1
Stara Pazova 1 1
Subotica 1 1
Zrenjanin 1 1
Grand Total 8 15 10 6 7 2 48
Table 16: List of hotels constructed in period 2006-2011 by clusters/destinations
Cluster Destination Name
Previous
categorization
Categorizati
on
Differen
ce
BG Arandjelovac Hotel "Izvor" 3 1 2
Belgrade Hotel "Radmilovac" 4 3 1
Hotel "Tulip Inn Putnik
Belgrade" 4 3 1
Best Western Hotel "M" 2 2 0
Garni hotel "Bg City Hotel" i
Depandans no category 3
Hotel " Design Hotel Queen
Astoria" 3 2 1
Hotel "Admiral klub" no category 2
Hotel "Astorija" 3 3 0
Hotel "Balkan" 3 2 1
Hotel "Excelsior" 4 3 1
Hotel "Moskva" 2 2 0
Hotel "Nacional" 3 3 0
Hotel "Plana" 3 3 0
Hotel "Square Nine" no category 1
Negotin Garni hotel "Beograd" no category 4
SES Leskovac Đermanović HPC no category 4
Hotel "Groš" no category 4
Majdanpek Hotel "Golden Inn" no category 5
Svilajnac Hotel "Topoljar" no category 4
SWS Čačak Hotel "Beograd" 4 2 2
Divčibare Hotel "Divčibare" no category 2
Ivanjica Garni Hotel "Western city" no category 4
Hotel "Park" 2 2 0
Jagodina Hotel "Jagodina" 4 5 -1
Katići Hotel "Logos" no category 3
Kopaonik Hotel "Junior" 4 3 1
Hotel "Angella" no category 2
Hotel "Grand" 2 2 0

35
Kragujevac "Radović" no category 4
Kraljevo "Turist" 3 2 1
Garni hotel "Dragačevo" no category 4
Perućac Garni hotel "Vila Drina" 2 4 -2
Hotel "Jezero" no category 4
Raška Hotel "Prestiž" no category 4
Valjevo Hotel "Tadića mlin" no category 4
Zlatibor
Hotel "Mona" bio Hotel
"Zlatibor" 3 2 1
Hotel "Palisad" i depandans 3 3 0
VOJ Bela Crkva
Hotel "Royal", former
"Jezero" 5 5 0
Indjija Hotel "Grand" 5 3 2
Kanjiža Hotel "Aquapanon" no category 4
Novi Sad Hotel "Putnik" no category 3
Hotel "Gymnas" no category 2
Hotel "Leopold I" bivši
"Varadin" 4 1 3
Palić
Garni hotel "Park i
depandans "Jezero" 2 2 0
Sečanj Hotel "Crveni cvet" 4 4 0
Senta Hotel "Royal" 4 3 1
Stara Pazova Hotel "Vila sunce" no category 5
Subotica Hotel "Patria" 3 2 1
Zrenjanin Hotel "Vojvodina" 3 2 1
Please note that the number of categorization is equaled:
1- 5*
2- 4*
3- 3*
4- 2*
5- 1*
Still the City break tourism product (with MICE and events) is the strongest since 16 out of 48
were reconstructed in Belgrade and Novi Sad. 17 were unclassified but situated mostly in
city, town destinations. 10 were reconstructed in mountain destinations which give this
product higher share compared to constructed hotels.
From the data published by the Statistical Buro of Serbia the following information could be
extracted:
- number of new constructed hotels and motels and number of new square meters
(1994 – 2008), source Statistical Buro of Serbia – Construction – Completed
constructions – Completed buildings – Hotels and motels

36
- value of construction work in hotels and motels in new construction, upgrade,
reconstruction and adaptation, major repairs and maintance (2000 – 2008), source
Statistical Buro of Serbia – Construction – Value of construction works done – Hotels
and motels
- number of construction permits and estimated value of construction works for hotels
and motels (2008 – 2010), source Statistical Buro of Serbia – Construction –Building
permits – Issued building permits and anticipated value of works – Hotels and motels
Table 17: Number of new constructed hotels and motels in period 1994 – 2008 by
Municipalities
Municipalities 1994 1995 1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total
Raška 1 1 3 1 2 8
Subotica 1 2 1 2 1 1 8
Nova Varoš 1 1 2 1 1 6
Čačak 6 6
Despotovac 1 1 1 2 5
Belgrade 1 1 3 5
Aleksinac 1 1 2 1 5
Valjevo 3 1 4
Zaječar 2 1 3
Bor 3 3
Čajetina 1 2 3
Loznica 1 1 1 3
Arandjelovac 1 2 3
Ub 2 2
Vranje 1 1 2
Vršac 1 1 2
Zrenjanin 1 1 2
Ivanjica 1 1 2
Ruma 2 2
Priboj 1 1 2
Niš city 1 1 2
Lapovo 1 1
Kula 1 1
Vrnjačka Banja 1 1
Mionica 1 1
Surdulica 1 1
Niš 1 1
Vlasotince 1 1
Bajina Bašta 1 1
Dimitrovgrad 1 1

37
Gornji Milanovac 1 1
Brus 1 1
Osečina 1 1
Kuršumlija 1 1
Ostalo 1 1
Vladimirci 1 1
Pančevo 1 1
Lebane 1 1
Preševo 1 1
Leskovac 1 1
Batočina 1 1
Doljevac 1 1
Kučevo 1 1
Ljubovija 1 1
Total 2 2 4 1 7 5 2 4 6 12 7 13 18 18 101
Table 18: Number of new square meters in period 1994 – 2008 by Municipalities
Municipalities 1994 1995 1996 1997 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Grand Total
Subotica 780 2.705 480 1.650 28.000 947 34.562
Čajetina 2.600 14.218 16.818
Belgrade 357 1.370 12.020 13.747
Bor 9.301 9.301
Brus 6.500 6.500
Vršac 5.000 976 5.976
Despotovac 540 158 1.200 2.723 4.621
Zrenjanin 338 3.451 3.789
Loznica 720 506 2.400 3.626
Raška 380 918 340 360 1.275 3.273
Niš city 1.260 1.841 3.101
Nova Varoš 281 468 1.496 273 515 3.033
Valjevo 1.515 1.192 2.707
Kuršumlija 2.500 2.500
Aleksinac 300 368 1.367 304 2.339
Ruma 1.797 1.797
Vrnjačka Banja 1.660 1.660
Ub 1.526 1.526
Surdulica 1.450 1.450
Čačak 1.369 1.369
Leskovac 1.332 1.332
Kučevo 1.256 1.256
Vlasotince 987 987

38
Zaječar 310 670 980
Ivanjica 408 530 938
Vranje 20 864 884
Lebane 880 880
Doljevac 792 792
Ostalo 640 640
Mionica 618 618
Arandjelovac 384 183 567
Priboj 224 320 544
Batočina 472 472
Bajina Bašta 400 400
Lapovo 334 334
Niš 327 327
Pančevo 306 306
Osečina 300 300
Vladimirci 300 300
Gornji Milanovac 245 245
Kula 240 240
Ljubovija 240 240
Dimitrovgrad 150 150
Preševo 141 141
Grand Total 310 161 2.867 880 2.149 3.704 581 1.425 8.329 6.400 9.274 19.659 46.707 35.122 137.568
I couldn’t make an appointment with the representatives of the Statistical Buro of Serbia
about the methodology but I noticed that i.e. Belgrade has less new hotels compared to the
database of categorized accommodation and i.e. Bor has new 9.301 m2 although only hotel
“Albo” was constructed (around 3.000 m2); there are however old hotels “Jezero” and
“Metalurg” at the Bor Lake owned by RTB Bor. Nevertheless, the data shows us a clear trend
of rising in the number of hotel units since 2004 (exception is 2005) and in the number of
new square meters since 2006. Top destinations in the sense of new square meters, which is
in my opinion more relevant, are Palić Lake (Subotica), Zlatibor (Čajetina), Kopaonik (Raška
and Brus), Belgrade, mentioned Bor, Vršac (Vila Breg business and hotel complex,
investment of Hemofarm, Vršac, pharmaceutical company, in 2005) and surprisingly
followed by Despotovac (Resavska cave, nature and waterfalls).
The value of construction works in hotels and motels can be classified into following
categories:

39
Table 19: Structure of construction work value in period 2000 – 2008 for hotels and motels
(in thousands RSD)
Type of construction work –
hotels and motels
Value
(in thousands RSD)
New construction 3.920.481
Reconstruction and adaptation 1.025.067
Upgrade 672.395
Major repairs 241.620
Maintenance 88.624
And if we take a look at the contruction work value from 2000 – 2008 we can see a trend of
growth in investment, although inflation is not incorporated in the values.
Table 20: Value of construction work value in period 2000 – 2008 for hotels and motels by
Municipalities (in thousands RSD)
Row Labels 2000 2001 2002 2003 2004 2005 2006 2007 2008 Total RSD
Subotica 21.483 1.455 10.152 199.168 489.742 284.865 67.964 1.074.829
Aranđelovac 16.286 75.875 100.342 393.720 384.246 970.469
Beograd 1.589 8.253 50.243 131.099 131.996 223.429 20.613 231.028 798.250
Čajetina 985 393 12.380 1.745 2.448 200.817 355.872 168.200 742.840
Ivanjica 1.150 210 260 115.271 19.047 113.808 249.746
Vršac 48.885 123.024 26.860 398 43.894 243.061
Valjevo 1.045 20 79.851 79.405 160.321
Novi Sad -
grad 243 13.500 14 8.143 17.721 11.474 19.816 78.169 149.080
Bor 72.963 1.000 18.580 51.279 143.822
Raška 15.005 10.954 24.612 65.845 2.639 400 13.010 132.465
Gornji
Milanovac 14.478 42.825 43.442 44 9.268 24 110.081
Grad Niš 6.629 6.878 8.684 7.804 17.000 43.000 89.995
Loznica 50.000 12.638 2.085 9.078 290 10.500 84.591
Šabac 1.074 1.074 30.430 40.166 72.744
Kraljevo 13.964 23.682 28.320 150 286 66.402
Mionica 50.841 15.284 66.125
Ruma 30.542 27.026 57.568
Despotovac 17.500 14.300 16.000 2.000 2.000 51.800
Kuršumlija 2.500 2.283 43.647 48.430
Vranje 491 44.197 3.000 47.688
Brus 594 2.253 7.230 10.000 17.998 4.485 42.560
Bajina Bašta 9.338 15.544 2.712 5.200 6.000 3.505 42.299

40
Leskovac 459 33.800 357 2.792 37.408
Užice 5.000 29.704 34.704
Zrenjanin 5.242 580 3.086 11.528 1.350 145 5.761 27.692
Ub 3.810 23.341 27.151
Tutin 26.430 26.430
Vrnjačka
Banja 256 1.888 741 1.056 1.550 2.086 11.052 18.629
Bačka Palanka 18.435 23 18.458
Čačak 3.382 9.805 119 3.207 16.513
Sombor 221 18 14.736 1.380 16.355
Nova Varoš 250 2.400 6.020 1.100 635 1.832 3.083 15.320
Novi Pazar 15.000 15.000
Vlasotince 11.500 3.200 14.700
Senta 138 424 13.647 377 14.586
Kanjiža 3.816 1.225 1.731 6.729 355 630 14.486
Kučevo 12.850 12.850
Majdanpek 12.500 12.500
Ljig 11.253 11.253
Arilje 2.800 7.600 10.400
Priboj 2.218 2.357 5.779 10.354
Beočin 10.283 10.283
Kruševac 25 9.792 9.817
Novi Kneževac 9.432 9.432
Apatin 642 65 7.213 7.920
Surdulica 3.362 1.000 3.336 7.698
Mali Zvornik 7.512 7.512
Titel 7.204 7.204
Knjaževac 7.123 7.123
Jagodina 6.990 6.990
Veliko
Gradište 2.300 4.190 6.490
Krupanj 3.184 1.403 1.608 6.195
Boljevac 2.000 2.000 1.380 5.380
Mali Iđoš 5.109 5.109
Trstenik 4.795 4.795
Žitište 3.874 3.874
Aleksinac 270 2.050 320 638 453 100 3.831
Vladimirci 3.440 3.440
Požega 3.280 3.280
Pančevo 1.800 80 376 80 792 3.128
Zaječar 3.000 3.000
Prokuplje 2.900 2.900
Ljubovija 1.334 1.334 2.668

41
Žagubica 2.050 220 2.270
Doljevac 800 300 210 450 450 2.210
Dimitrovgrad 2.144 2.144
Bačka Topola 2.057 2.057
Lapovo 800 853 1.653
Velika Plana 1.614 1.614
Kragujevac -
grad 1.597 1.597
Bela Crkva 148 1.017 1.165
Bečej 301 699 1.000
Kikinda 224 722 946
Kosjerić 804 804
Sjenica 577 577
Irig 484 484
Sremska
Mitrovica 421 421
Šid 401 401
Batočina 275 275
Pirot 187 187
Negotin 162 162
Svrljig 116 116
Aleksandrovac 80 80
Total RSD 150.389 56.660 98.217 216.315 387.186 801.275 1.340.285 1.405.413 1.492.447 5.948.187
Table 21: First 10 municipalities by construction works value – hotels and motels in specific
categories of construction works
Municipality New construction Municipality Upgrade Muncipality
Reconstruction
and
adaptation
Subotica 1.027.898 Aranđelovac 463.741 Aranđelovac 424.142
Čajetina 680.537 Subotica 29.376 Beograd 139.263
Beograd 510.095 Tutin 26.430 Ivanjica 129.102
Vršac 206.195 Raška 19.744 Kraljevo 48.384
Bor 143.822 Bačka Palanka 18.435 Novi Sad - grad 34.999
Valjevo 139.116 Čajetina 16.277 Čajetina 34.793
Ivanjica 120.364 Bajina Bašta 15.717 Ruma 31.786
Novi Sad - grad 111.311 Vršac 11.454 Raška 19.817
Gornji Milanovac 100.745 Gornji Milanovac 9.150 Valjevo 16.185
Raška 91.742 Kraljevo 7.564 Sombor 16.116
One can notice that Subotica, Arandjelovac, Beograd and Čajetina (Zlatibor) recorded the
highest amount of investments in hotel and motels whether it is about new construction,

42
upgrading or reconstruction. Arandjelovac takes this high position with the investment by
Alco Group in reconstruction and upgrading of hotel “Izvor”. However, it is strange that
Belgrade, with so many new and reconstructed hotels, didn’t record higher amount of
investment in hotels and motels.

43
4.1 Privatization
The privatization process of hotels in Serbia shares the same problems as the privatization
process generally. The will to have a strategic systematic approach in hotel privatization
comes late with the National Tourism Strategy in 2006. In the meantime hotels lost its
markets, international tourist naturally reacted to the war situation in former Yugoslavia and
domestic tourist reacted to the degradation of living standard. Hotels were neglected,
abandoned, used as refugee shelter or even military/police bases. This together with
absence of strategic approach in tourism made it really hard for hotels to be valuable
business projects. Also, many of the city hotels were nationalized by the communist
government and the Law on restitution is announced now when the privatization process is
at its end. In my opinion, it was better to return these properties to the previous owners for
at least one good reason – the management of the property and business project would be
for sure handled better by the private owner compared to state management. Recently,
“special problem” emerged with special hospitals in spas and the mentioned determination
of ownership between different state institutions (state resource vs. state resource,
managed by elected politicians). So the process of privatization of spas is on standby.
The first Law on privatization was adopted in 1991, followed by the one from 1997 (shares to
the workers) and after the democratic changes the one from 2001 (auction and tender
privatization) which has significantly changed during the years. Majority of new owners are
of domestic origin, even though in many cases the companies/buyers come from offshore
countries. There are some cases of privatization made by foreign investors: Hotel “Sirmium”,
Sremska Mitrovica, tourism company “Putnik”, hotel “Excelsior”, Belgrade, hotel “Vrujci”,
Valjevo, hotel “Jadran”, Bačka Topola, hotel “Junior”, Kopaonik etc. The hotels “Metropol”
and “Jugoslavija” were sold in 2006 to foreign investors but since they were sold not as
companies but as property owned by “Dunav Turist”, part of Dunav Insurance Group owned
by the Republic of Serbia, without any conditions (i.e. deadline for opening) they are still
ruins waiting to be reconstructed. Tourism companies “Putnik” and “Srbija Turist” were sold
to “Uniworld Holdings” ltd, USA owned by Serbian Srba Ilić but the contract was terminated
and matter of international arbitrage with the engagement of USA administration.
Unfortunately, there are more cases where the contract of privatization was terminated
especially when the buyer didn’t fulfill his contract obligations or the origin of the money is
connected with criminal activities (i.e. Darko Šarić, Joca Amsterdam). Some of the examples
are: “Kraljevi konaci”, Zlatibor - buyer Zoran Joksimović, wife of Milomir Joksimović aka Miša
Omega, suspected that behind the purchase is Sreten Jocić aka Joca Amsterdam; Hotel Prag
in Belgrade was sold on a public auction in 2007 to Jovan Pejčić and Tomislav Djordjević for
850 mil RSD (Mr. Dimitrije Kostić claims the right for restitution and this is common to many
city hotels). Mr. Pejčić and Mr. Djordjević are also the owners of hotel "Novi Sad" and Mr.
Djordjević unsuccessfully privatized hotel “Fontana”, Vrnjačka Banja. Mr. Tomislav
Djordjević is the former owner of Meridian Bank which he sold to Credit Agricole bank. The
contract for hotel “Prag” was terminated and the buyer Tomislav Djordjević sues Agency for
privatisation; Hotel “Jagodina”, Jagodina – was sold to Milomir Joksimović aka Miša Omega
but the contract was terminated due to unfulfilling of the contract obligations; Dubravka

44
Djordjević, the daughter of Tomislav Djordjević, from Novi Sad bought 70% of PTT
Ugostiteljstvo which owns hotels "Srebrnac", Kopaonik, "Zelenkada", Zlatibor, restaurants
"Rujno" and "Serdarev konak", Zlatibor (Villa "Poštanski dom" was exempt from privatisation
and now belongs to Solidarity foundation). After few months the hotels were given to Milan
Joksimović, the son of Milomir Joksimović; narco boss Darko Šarić bought tourism company
Palić which owns hotel “Prezident”, Palić and “Patria”, Subotica and clubs and restaurants,
hotels “Vojvodina” and “Putnik”, Novi Sad etc.; similar controversies were recorded in other
companies and hotels even by today respected representatives of the tourism industry in
Serbia.
Majority of buyers in the privatization process were mainly companies – people which
developed businesses in other industries. This comes natural since there was no way to
develop tourism business in the 90’s and even in the post Milošević Serbia as the existing
inherited tourism industry and market collapsed. Yet, recently professional tourism business
companies emerged mainly on the foundations of successfully privatized hotels and tourism
companies. That is the case with Alco Group, MK Holding, Mona, Todor and many other
smaller companies which will be mentioned later in the text.
What remains for privatization?
According to the data receive from the Agency for privatization the companies/hotels in the
following table are candidates for the process of privatization. Most of them weren’t
privatized and are owned by the state or still have social capital as ownership (type of
ownership invented in communist Yugoslavia – the property belongs to the society). Some
companies are here because the contract of privatization was terminated, some belong to
the military or public enterprises.
Table: Candidates for the process of privatization and asset management controlled by
NCTDS
Name Owner Destination
Hotel "Omorika" i depandans
"Javor" VU "Tara", Bajina Bašta Bajina Bašta
Specijalna bolnica za
rehabilitaciju Banja Koviljača Specijalna bolnica za rehabilitaciju Banja Koviljača
Banja
Koviljača
Hotel "Podrinje" HTP "Banja Koviljača" AD, Banja Koviljača
Banja
Koviljača
Hotel "Slavija lux" JAT- Hotel "Slavija" doo, Beograd Belgrade
Hotel "Beograd" Preduzeće "Želturist", Beograd Belgrade
Hotel "Slavija II" JAT "Hotel Slavija" doo, Beograd Belgrade
Hotel "Dom prosvetnih radnika
Jugoslavije" DP "Dom prosvetnih radnika Jugoslavije", Beograd Belgrade
Hotel Central, Zemun Zorana Joksimović Belgrade
Hotel "Bristol" stanova "Dedinje", Beograd Belgrade

45
Hotel DMB, 21. maj -
hotelijerstvo i ugostiteljstvo
doo, Rakovica, Beograd
Hotel DMB, 21. maj - hotelijerstvo i ugostiteljstvo
doo, Rakovica, Beograd Belgrade
Garni hotel "Splendid" HUTP "Splendid", Beograd Belgrade
Proleće dp, Bujanovac Proleće dp, Bujanovac Bujanovac
Specijalna bolnica Bujanovac Specijalna bolnica Bujanovac Bujanovac
Vrelo Bujanovac, Bujanovačka
banja Vrelo Bujanovac, Bujanovačka banja
Bujanovačka
Banja
Hotel "Vilin lug" HUP "Evropa", Surdulica Crna Trava
Motel ''Dimitrovgrad'' Dimitrovgrad, Utp''Balkan'' Dimitrovgrad
Romuliana doo, Gamzigradska
banja Romuliana doo, Gamzigradska banja
Gamzigradska
Banja
Hotel "Jagodina" DP "Palas" , Jagodina Jagodina
Hotel "Jugobanka" "IFTA" doo, Beograd Kopaonik
Hotel "Olga Dedijer" DOO "Rekreaturs", Beograd Kopaonik
Hotel "Srebrnac" PD "PTT Ugositeljstvo" DOO, Beograd Kopaonik
Specijalna bolnica Ribarska
banja, Kruševac Specijalna bolnica Ribarska banja, Kruševac Kruševac
SPBRH Žubor, Kuršumlijska
banja SPBRH Žubor, Kuršumlijska banja
Kuršumlijska
Banja
Hotel "Lučani" DOO Hotel "Lučani", Lučani Lučani
Hotel "Termal"
DP "Mataruška i Bogutovačka banja" Mataruška
Banja
Mataruška
Banja
Nais "Srbija - Turist", a.d. Niš
Hotel "Ozren - krilo A" "Srbijaturist" AD, Niš Niška banja
Institut za lečenje i
rehabilitaciju Niška banja Institut za lečenje i rehabilitaciju Niška banja Niška banja
Hotel "Ozren - krilo B" bio
hotel "Partizan" HK "Srbija turist", Niš Niška banja
Hotel "Putnik" UTP "Putnik" AD, Novi Sad Novi Sad
Hotel "Obrenovac" Preduzeće "SAVA-TENT" d.d.o. Obenovac
Hotel ''Tamiš'' Pančevo, Dup''Sloboda'' Pančevo
Hotel "Gejzer"
Specijalana bolnica za rehabilitaciju "Gejzer",
Sijarinska banja
Sijarinska
Banja
Hotel "Turist" HTP "Lepterija", Sokobanja Sokobanja
Hotel "Moravice" PJ "Proleće", KPZ Sremska Mitrovca Sokobanja
Hotel ''Sunce'' Sokobanja, PK ''Trebič'' Sokobanja
Specijalna bolnica Sokobanja,
Sokobanja Specijalna bolnica Sokobanja, Sokobanja Sokobanja
Hotel "Zdravljak" HTP "Lepterija", Sokobanja Sokobanja
Hotel "Babin zub" "Epsturs", Beograd Stara planina
Hotel "Jezero" HUP "Evropa", Surdulica Surdulica
Hotel "Železničar" "Želturist" Beograd
Vranjska
banja

46
Specijalna bolnica Vranjska
banja Specijalna bolnica Vranjska banja
Vranjska
banja
Zavod Termal, Vrdnik Zavod Termal, Vrdnik Vrdnik
Hotel "Železničar" "Želturs" DOO, Beograd
Vrnjačka
Banja
Hotel "Breza" Vojna ustanova "Vrnjačka Banja", Vrnjačka Banja
Vrnjačka
Banja
Hotel "Slavija"
Zadružno preduzeće "Maj komerc" PJ hotel "Slavija",
Vrnjačka banja
Vrnjačka
Banja
Specijalna bolnica Merkur,
Vrnjačka banja Specijalna bolnica Merkur, Vrnjačka banja
Vrnjačka
Banja
Hotel "Fontana" HTP "Fontana" AD, Vrnjačka Banja
Vrnjačka
Banja
Hotel "Zvezda" HTP "Fontana", AD Vrnjačka Banja
Vrnjačka
Banja
Hotel "Zelenkada" PD "PTT Ugositeljstvo" DOO, Beograd Zlatibor
Specijalna bolnica Čigota,
Zlatibor Specijalna bolnica Čigota, Zlatibor Zlatibor
Ineks hoteli dp, Beograd Ineks hoteli dp, Beograd
It would be good to decide if there is a need to have asset management of these companies
controlled by the NCTDS. Banks that seize hotels because of not repaid loans hire companies
to run it and prepare for sale. This could be an opportunity for domestic companies which
proved to be good managers of the hotels to expand their business with little investment.
The point is to have specific solutions for the companies, instead of letting them make high
debts, degrade and then trying to sell them through the mechanism of the Agency for
privatization.
Particular situation is with special hospitals/hotels in spas governed by the Ministry of
health, which initiated the process of privatization together with the MERR and Agency for
privatization in 2008. The process is on standby since the PIO Fund (Pension and Invalid
Fund) initiated the process of determining the ownership on these and other companies in
which they invested when the economy was good and the fund had the money. According to
the statement made by Mr. Valerijan Kadijević, director of the PIO Fund, these are the
companies and estimated amount invested:
Table: Companies for which PIO Fund initated the process of determining the ownership
Nr. Name
Invested by PIO
Fund (mil €)
1 Zlatar 26,4
2 Special hospital Čigota, Zlatibor 21,3
3 Niška Banja 20,4
4 Special hospital „Ivanjica“ 18,2

47
5 Sokobanja 17,4
6 Gamzigradska Banja 15,2
7 Special hospital Novi Pazar 13,2
8 Ribarska Banja 12,6
9 Special hospital Žubor, Kuršumlijska banja 12,4
10 Special hospital Vrnjačka Banja 11,9
11 Preduzeće „Jumko“ 11,2
12 Specijalna bolnica Miroslav Zotović 8,7
13 Mataruška banja 7,8
14 Special hospital Banja Koviljača 7,3
15 „Rekreaturs“ 7,1
16 Genex 5,5
17 Special hospital Rusanda, Melenci 5,1
18 Banja Junaković 4,6
19 Bukovička banja 4
20 Banja Kanjiža 3,5
21 Special hospital „Borivoje Gnjatić“ 3,5
22 Specijalna bolnica „Vaso Ćuković“ 3,5
23 Institut for rehabilitation „Selters“, Mladenovac 3,3
24 „Termal“ Vrdnik 2,2
25 Sijerinska Banja 1
26 Vrelo, Bujanovačka Banja 1
27 „Ozren“ Sokobanja 0,9
In my opinion, the spas cannot wait for the process to end and we should have Strategy for
spas made by all stakeholders.
4.2 Who has invested and what investment projects are in progress
4.2.1 Cluster Belgrade
Key investment projects according to the Tourism Development Strategy of the RS:
Cluster Belgrade
- Nautical System Belgrade-Smederevo-Iron Gate and project of Belgrade at the
Danube
The project Belgrade at the Danube is a huge project of urban conversion. It started with the
privatization of the Belgrade Port in September 2005 by Delta Holding, Belgrade, owned by
Miroslav Mišković. Delta Company together with its business partners (Milan Beko)

2011-07-06 Report on investment policy and activities

2011-07-06 Report on investment policy and activities

Recommended

Recommended

More Related Content

Viewers also liked

Viewers also liked (19)

Similar to 2011-07-06 Report on investment policy and activities

Similar to 2011-07-06 Report on investment policy and activities (20)

2011-07-06 Report on investment policy and activities