The Government of Montenegro plans to stop the sale of state assets in the Dr. Simo Milošević Institute in Igalo no later than the end of 2022, according to the action plan of the adopted Health Tourism Development Program (PRZT).
“Health tourism products in Montenegro largely depend on the institute, numerous dental clinics, hotels with wellness and spa services, as well as national parks and protected areas. In addition, health tourism represents added value to the overall tourism offer, with an emphasis on positioning Montenegro as a year-round tourist destination,” the Ministry of Economic Development document says.
Institute revenues
According to PRZT indicators, the institute earned 11.812 million euros in 2019. Of that amount, 6.039 million was the inflow from foreign guests — as much as 2.88 million for Norwegian patients, which makes up 47.71 percent of revenue from foreign markets or 24.15 percent of total realized revenue in a record tourist year.
Users of services from Montenegro brought in revenues of 5.773 million euros, with the predominant 3.327 million euros coming from the Health Insurance Fund — 57.63 percent of domestic market revenues or 27.89 percent of total revenues in 2019.
In the institute’s strategy (S3) for the 2019–2024 period, a special chapter is devoted to health tourism based on the principles of sustainable development.
It emphasized the need to modernize and improve the institute in order to become a leading center for medical rehabilitation and physiotherapy of musculoskeletal disorders not only in the region, but also in Europe.
“The institute, with a 70-year tradition, was recognized as a leading institution for ‘export-oriented’ year-round health tourism in high-paying markets with emissions, whose position needs to be restored and strengthened,” the S3 document concluded.
To achieve success in this, it is recommended, among other things, to improve therapeutic and rehabilitation treatments for musculoskeletal disorders using biomechanics and nanotechnology. 60 million euros are planned to be invested in such a transformation of the institute, which will generate at least twice as much revenue.
But such investments will likely have to wait a few more years. Namely, by the end of September next year, a new feasibility study for future investments in our most important and largest health tourism facility, located in Igalo, should be prepared, for which 30,000 euros will be allocated.
In addition, another 3,000 euros will be allocated for an analysis of the existing training and the determination of the institute’s professional staffing needs. According to the action plan, all funds are intended for this health center near Herceg Novi.
Action plan
Although health tourism stands out as an exceptional and underused potential of our country, its real development in the next few years will apparently be reduced to the possible arrival of a foreign investor, who, through his investments, will make this segment of the tourism offer more attractive. .
“For the implementation of the PRZT action plan, 1,205 million euros are needed, of which 1.1 million euros — or 91.29 percent — are loan funds, and 105,000 euros are budget funds,” the document specifies.
It is planned that all facilities and institutions whose services are part of the health tourism offer will receive accreditations and certificates for carrying out their work by the end of next year. They will, of course, have to pay from their own funds, while the government and the Ministry of Economic Development are offering loans totaling up to one million euros, with the Investment and Development Fund as assistance. This same credit institution will lend 100,000 euros to small domestic producers for the development of the production and sale of medicinal herbs and muds.
Much less money will be allocated from the state budget. In addition to the total amount allocated to the Institute, 33,000 euros, the creation of tourist products that will include health services — and vice versa — will be completed for 5,000 euros.
The largest amounts are planned for visits to specialized fairs and conferences abroad, as well as for organizing the same events in Montenegro with the aim of promoting health tourism - 30,000 euros from the state budget for both activities.
“In 2024, health tourism in Montenegro, based on public-private partnership with the hotel industry and associated product and service providers, will become one of the most important segments of the year-round offer in Montenegro, accompanied by health tourism. tourist products intended for health tourists and their companions have been developed,” the PRZT conclusion says.
Health tourism
According to some estimates, health tourism generates up to 86 billion US dollars worldwide. In European Union countries, revenues are estimated at around 47 billion euros, which is 4.6 percent of total tourism revenues and 0.33 percent of GDP.
“If the EU research data are applied, Montenegro would generate 50.6 million euros in health tourism revenues annually. However, a more realistic estimate would be that in 2019 they would amount to 0.33 percent of GDP or 16.17 million euros,” the document says.
In addition, it should be noted that 494 companies with 2,676 employees carry out activities related to the healthcare sector, with total revenue of 52.95 million euros, but also a loss of 4.4 million euros. Among municipalities, the largest inflow goes to Podgorica (27.8 million) and Herceg Novi (13.2 million euros), while profits are in Podgorica, Budva and Bar. Hospitals (23.4 million), specialized practices (11.1 million) and dental offices (8.9 million euros) have the highest revenue, while specialized clinics (1.5 million euros) are the most profitable.